Jan 7, 2012
Bank of America on Monday announced roughly $11.6 billion of settlements with mortgage finance company Fannie Mae and a $1.8 billion sale of collection rights on home loans, in a series of deals meant to help the bank move past its disastrous 2008 purchase of Countrywide Financial Corp.
The settlements and transactions and other charges will result in Bank of America posting only a small profit for 2012’s fourth quarter. The bank is due to report results on January 17.
Bank of America is paying $3.6 billion to Fannie Mae and buying back $6.75 billion of bad loans from the mortgage company to clear up all claims that government-owned Fannie Mae had made against the bank.
Fannie Mae and its sibling, Freddie Mac, have been pushing banks to buy back loans they sold to the two companies that never should have been sold to them because the loans did not meet the companies’ criteria for purchasing.