Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek


Filed under: News | Also on the Geek Mind


$9.3B BofA Settlement

Mar 27 2014, 2:48am CDT | by

1 Updates
$9.3B BofA Settlement

YouTube Videos Comments

Full Story

$9.3B BofA Settlement

It’s been an expensive road to recovery for Bank of America as the company settles yet another multi-billion mortgage case.

The nation’s second largest bank agreed to pay a whopping $9.3 billion to settle mortgage-backed securities allegations brought by the Federal Housing Finance Agency.

The FHFA, which represents Fannie Mae and Freddie Mac, had alleged violations of federal and state securities laws against BofA, Countrywide and Merrill Lynch in connection with private label, residential mortgage based securities (RMBS) purchased by Fannie and Freddie between 2005 and 2007.

Under the terms of the deal BofA will pay cash totaling $6.3 billion to Fannie and Freddie, and also repurchase soured RMBS worth about $3.2 billion.

It’s a big chunk of money for BofA. The settlement will hurt the bank’s first quarter 2014 income by $3.7 billion (pretax), or $.21 per share. But the settlement  is a good one for the bank in the long run because it clears the bank of pending FHFA lawsuits.

The FHFA’s pending lawsuits will be dismissed with prejudice and Bank of America and its affiliates will be released from all securities law and fraud claims, as well as certain other claims related to the private-label RMBS in dispute, according to BofA.

In a statement, BofA said, “The FHFA settlement resolves one of the most significant remaining pieces of RMBS securities litigation facing the company. With this settlement, Bank of America has now resolved approximately 88 percent of the unpaid principal balance of all RMBS as to which RMBS securities litigation has been filed or threatened for all Bank of America-related entities.”

FHFA Director Melvin L. Watt said, “FHFA has acted under its statutory mandate to recover losses incurred by the companies and American taxpayers and has concluded that this resolution represents a reasonable and prudent settlement of these cases. This settlement also 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.”

The settlement news comes the same afternoon BofA passed the Fed’s CCAR exam. The results of the stress test allow BofA to increase its quarterly common stock dividend to $.05 per share, and repurchase $4 billion in common stock.

Five of the 30 banks subject to CCAR failed including Citigroup. The Fed said Citigroup’s deficiencies include its ability to project revenue and losses under a stressful scenario for material parts of the firm’s global operations, and its ability to develop scenarios for its internal stress testing that adequately reflect and stress its full range of business activities and exposures.


You Might Also Like


Sponsored Update


More From the Web

Shopping Deals


<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




blog comments powered by Disqus

Latest stories

Jennifer Lawrence is currently canoodling with Chris Martin
Jennifer Lawrence is currently canoodling with Chris Martin
Hunger Games starlet, Jennifer Lawrence is currently canoodling with Coldplay singer, Chris Martin. And Gwyneth is getting pretty riled up about it.
Taylor Swift has a Lot going for her
Taylor Swift has a Lot going for her
Taylor Swift is one cool country singer. And she has a lot going for her.
Rihanna and Drake truly madly deeply in Love with each other
Rihanna and Drake truly madly deeply in Love with each other
The popster, Rihanna and rap artist, Drake are reportedly truly, madly and deeply in love with each other. This comes two years after their infamous split.
Kim Kardashian reveals a Few Factoids from her Life
Kim Kardashian reveals a Few Factoids from her Life
The gorgeous chunk of feminine beauty, Kim Kardashian has revealed a few factoids from her semi-charmed life.

About the Geek Mind

The “geek mind” is concerned with more than just the latest iPhone rumors, or which company will win the gaming console wars. I4U is concerned with more than just the latest photo shoot or other celebrity gossip.

The “geek mind” is concerned with life, in all its different forms and facets. The geek mind wants to know about societal and financial issues, both abroad and at home. If a Fortune 500 decides to raise their minimum wage, or any high priority news, the geek mind wants to know. The geek mind wants to know the top teams in the National Football League, or who’s likely to win the NBA Finals this coming year. The geek mind wants to know who the hottest new models are, or whether the newest blockbuster movie is worth seeing. The geek mind wants to know. The geek mind wants—needs—knowledge.

Read more about The Geek Mind.