Come spring, excited gardeners drive to nurseries, load up their cars and go home to plant. That’s tradition. But fall planting also ranks high as a time to put plants in the ground.Nurseries may
Bank Of America Settles With FHFA For Just Over 9 Billion
Dated: March 27 2014
The settlement resolves four lawsuits filed in September 2011 against BofA, Countrywide, and Merrill Lynch, the latter two of which were acquired by the megabank in 2008. The agency’s original complaint alleged misrepresentations of mortgage loan quality in regard to private-label residential mortgage-backed securities (RMBS) purchased by the GSEs between 2005 and 2007. Allegations of common law fraud were made in the Countrywide and Merrill Lynch cases.
According to announcements made by all parties involved, under the agreement, BofA will make an aggregate payment of approximately $9.33 billion, $3.2 billion of which will go toward the repurchase of certain RMBS at fair market value. In return, the bank will be released from FHFA’s pending lawsuits and will be cleared from “certain other claims related to the private-label RMBS in dispute.”
The settlement covers approximately $57.5 billion (in purchase cost) of RMBS purchased by the GSEs, according to a release from BofA.
FHFA Director Mel Watt celebrated the settlement, saying in a statement that it “represents an important step in helping restore stability to our broader mortgage market and moving to bring back the role of private firms in providing mortgage credit.”
“Many potential homeowners will benefit from increasing certainty in the marketplace and that is very much the direction we should be taking,” he added.
The suit with BofA is just one of more than a dozen the agency filed against banks in 2011 as part of its efforts to recover losses Fannie and Freddie suffered through the crash. Of 18 suits filed, FHFA now has claims remaining in seven.
In addition to the FHFA agreement, Freddie Mac also announced a separate settlement with BofA concerning claims related to reps and warranties on single-family loans underlying five Freddie Mac Structured Pass-Through Certificates (“T-Deals”). In exchange for a payment of $134 million, the enterprise has agreed to release the bank from existing and future loan repurchase obligations for those mortgages.
“We are pleased that we have resolved this matter with one of our largest seller/servicer customers and counterparties,” said Freddie Mac CEO Donald Layton. “This settlement is an equitable outcome that allows both Freddie Mac and Bank of America to put these issues behind us and focus on the future.”
As for BofA, it expects its Q1 2014 income to take a cut of about $3.7 billion as a result of the settlement—and that’s not the only litigation expense on its radar. Lawyers for the bank appeared in U.S. District Court in March to argue for the penalty phase of a fraud case decided last October, when BofA was held liable for allegedly reckless loans made by Countrywide before its acquisition. While the government is pushing for $2.1 billion in fines—a far cry from the $864 million originally sought—BofA says it should be penalized for the amount of profit it made from selling the loans: $0.
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 30 years in the industry, Mark has gained experience in ....
Latest Blog Posts
When you make an offer on a house, you might be wondering: How long does it take a home seller to respond to your offer?There’s nothing worse than sitting around waiting—especially when you’re
Servicers’ forbearance portfolio volume fell once again last week, as exits remained elevated compared to requests or re-entries. The total number of loans in forbearance dropped by eight basis