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You are here News Economy Bank Of America To Pay $9 Billion To Settle Mortgage Securities Suit

Bank Of America To Pay $9 Billion To Settle Mortgage Securities Suit

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bank of americaHere’s a story that’s starting to sound weirdly familiar: Bank of America Corp. just agreed to pay $9.5 billion to settle U.S. claims linked to mortgages sold to Fannie Mae and Freddie Mac from 2005 to 2007. The deal, which roughly $6.3 billion in cash to end legal claims and an agreement to buy back $3.2 billion worth of mortgage-backed bonds, might seem like a landmark … if it was not so similar to multi-billion dollar agreements Bank of America signed in 2011 and 2013.

The 2013 deal, signed that January, also involved paying $3.6 billion in cash and buying back mortgages with billions of dollars in outstanding principal. At the time, Bank of America CEO Brian T. Moynihan called the 2013 agreements “a significant step in resolving our remaining legacy mortgage issues.” One analyst told Bloomberg that the deal would let Bank of America put its Fannie and Freddie issues behind it.

Apparently not. But there’s more. The current deal doesn’t just come on top of the 2013 settlement. It also comes on top of a $3 billion deal with Fannie and Freddie in 2011. Not to mention an $8.5 billion settlement reached with mortgage bond investors the same year. The consensus then was also that Bank of America seemed to be climbing out of the mortgage crisis pit. “The good news for BofA is that it seems to be putting a significant chunk of its Countrywide problems behind it,” Forbes wrote. Sound familiar?

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