Make us your home page
Instagram

Bank of America reportedly will pay $8.5 billion to settle investors' claims of losses

LOS ANGELES — Bank of America was close to finalizing a deal late Tuesday that calls for the lender to pay $8.5 billion to settle claims from a group of investors who bought mortgage-backed securities from Bank of America, the Associated Press reports.

AP reported that a person familiar with the talks said the Charlotte, N.C., bank was nearing an agreement with the investor group and was expected to announce a done deal as early as today. AP said the person declined to be identified because the matter was still developing.

Calls to a Bank of America spokesman were not immediately returned.

The investors, which include the Federal Reserve Bank of New York and Blackrock Financial Management, have been pressing the lender for almost a year to buy back defaulted mortgages made by its Countrywide unit.

The Fed is involved because it took over assets held by American International Group, which faltered under the weight of bad home loans. Bank of America acquired Countrywide Financial Corp. in 2008.

Should it stand, the proposed payout goes well beyond other settlement deals entered into by the bank to resolve mortgage buyback disputes.

In January, Bank of America paid $2.6 billion as part of an agreement to settle buyback claims on home loans it sold to Fannie Mae and Freddie Mac. In April, the bank agreed to pay up to $1.6 billion to Assured Guaranty Ltd., an insurer that also pressed the bank to repurchase its shoddy mortgages.

If approved, the latest settlement would address a significant slice of Bank of America's mortgage buyback claim risk.

A Wall Street Journal report late Tuesday estimated the group of 22 high-profile investors holds more than $56 billion in mortgage-backed securities that are at the center of the dispute.

The investors have argued that Countrywide's practice of modifying loans found to have faulty paperwork or those written outside of normal underwriting standards breached signed agreements with the investors. By continuing to service bad loans rather than speeding up foreclosures, the group has claimed, Countrywide ran up servicing fees, enriching itself at the expense of investors.

Bank of America reportedly will pay $8.5 billion to settle investors' claims of losses 06/28/11 [Last modified: Tuesday, June 28, 2011 10:28pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Trigaux: No more VinikVille as Water Street Tampa finally arrives

    Business

    Adios, VinikVille! Hello Water Street Tampa.

    An aerial rendering of the $3 billion redevelopment project that Jeff Vinik and Strategic Property Partners plan on 50-plus acres around Amalie Arena.
[Rendering courtesy of Strategic Property Partners]
  2. Unlicensed contractor accused of faking death triggers policy change at Pinellas construction licensing board

    Local Government

    The unlicensed contractor accused of faking his death to avoid angry homeowners has triggered an immediate change in policy at the Pinellas County Construction Licensing Board.

    Last year Glenn and Judith Holland said they paid a contractor thousands of dollars to renovate their future retirement home in Seminole. But when they tried to move in on Dec. 14, they said the home was in shambles and uninhabitable. They sent a text message to contractor Marc Anthony Perez at 12:36 p.m. looking for answers. Fourteen minutes later, they got back this text: "This is Marc's daughter, dad passed away on the 7th of December in a car accident. Sorry." Turns out Perez was still alive. Now the Hollands are suing him in Pinellas-Pasco circuit court. [LARA CERRI   |   Times]
  3. SeaWorld shares drop Monday to 2017 low after disclosure of federal subpoena

    Tourism

    The Orlando parent company of SeaWorld and Busch Gardens theme parks saw its stock drop 3.5 percent Monday to $15.10, its lowest price of this year.

    Killer whales perform at Shamu Stadium at SeaWorld in Orlando in 2011, before public pressure was placed on the theme park company to curtail its orca shows.SeaWorld has since announced an end to the traditional killer whale entertainment  at its theme parks. [AP Photo/Phelan M. Ebenhack]
  4. Rick Scott appoints longtime ally Jimmy Patronis as Florida CFO

    State Roundup
    Rick Scott appoints Jimmy Patronis (background) as CFO. [STEVE BOUSQUET | Tampa Bay Times]
  5. Local gas prices plummet as Fourth of July holiday travel approaches

    Tourism

    TAMPA — Local gas prices are enjoying an unseasonal dip around the $2 mark just in time for the hectic Fourth of July holiday travel weekend.

    The price of regular unleaded gasoline has dropped to $1.99 at a Rally station on Pasadena Ave. South and Gulfport Boulevard South, South Pasadena.
[SCOTT KEELER   |   Times]