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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-07-13 09:06 AM
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Bank of America in $10B-plus mortgage settlement
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Jan 7, 9:19 AM EST

Bank of America in $10B-plus mortgage settlement

CHARLOTTE, N.C. (AP) -- Bank of America says it will spend more than $10 billion to settle mortgage claims resulting from the housing meltdown.

Under the deal announced Monday, the bank will pay $3.6 billion to Fannie Mae and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide banking unit sold to the government agency from Jan. 1, 2000 through Dec. 31, 2008. That includes about 30,000 loans.

Its shares edged up 14 cents to $12.25 in premarket trading after the announcement.

CEO Brian Moynihan said the agreements were "a significant step" in resolving the bank's remaining legacy mortgage issues while streamlining the company and reducing future expenses.

Bank of America bought Countrywide Financial Corp. in July 2008, just before the financial crisis. Countrywide was a giant in mortgage lending, but was also known for approving risky loans.

Fannie Mae and Freddie Mac, which packaged loans into securities and sold them to investors, were effectively nationalized in 2008 when they nearly collapsed under the weight of their mortgage losses.



http://hosted.ap.org/dynamic/stories/U/US_BANK_OF_AMERI...

Actually, they were put into conservativeship, like many a senile grandparent. Fannie Mae started as a New Deal program. Then, it went quasi public (or quasi private, whatever), where private parties ran it into the ground, bleeding it as they went.
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