CHARLOTTE, N.C. — Bank of America Corp. will pay more than $9 billion in a settlement with the Federal Housing Finance Agency that resolves claims the bank violated securities law while selling mortgage bonds to mortgage giants Fannie Mae and Freddie Mac.
The settlement covers about $57.5 billion in mortgage-backed securities sold by Bank of America and subsidiaries Countrywide Financial and Merrill Lynch between 2005 and 2007. The Federal Housing Finance Agency is the regulator overseeing Fannie and Freddie.
Bank of America will pay $6.3 billion in cash and repurchase about $3.2 billion in securities.
“This resolution represents a reasonable and prudent settlement of these cases,” FHFA director Mel Watt said in a statement. Watt is a former U.S. representative from Charlotte, where Bank of America is based.
“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.”