A repurchase settlement between Bank of America Corp. and the Federal Home Loan Mortgage Corp. pales in comparison to another repurchase settlement BofA reached earlier this year.
On Monday, the Charlotte, N.C.-based financial institution disclosed that it has reached an agreement to with Freddie Mac.
The deal resolves all remaining representations and warranties claims for 716,000 residential loans it sold to Freddie from 2000 until 2009.
Also covered by the settlement is compensation to Freddie for certain past losses and potential future losses relating to denials, rescissions and cancellations of mortgage insurance.
BofA said the settlement will cost it $404 million, including $13 million in repurchases already made and reconciling adjustments.
The expense for the agreement has already been set aside in reserves as of Sept. 30.
BofA said it previously reached an agreement with Freddie that resolved repurchase claims on loans sold by Countrywide Home Loans to Freddie through 2008.
BofA resolved outstanding repurchases with Fannie Mae in January with a $3.55 billion settlement on $1.4 trillion in loans from Bank of America, N.A., and Countrywide Financial Corp. That agreement included BofA’s repurchasing of $6.75 billion in loans.
“With this settlement, Bank of America has resolved all outstanding and potential representations and warranties claims on whole loans sold by legacy Bank of America and Countrywide to Fannie Mae and Freddie Mac through the dates outlined above, subject to certain exceptions which Bank of America does not believe are material,” BofA said in today’s announcement.
Freddie Mac Chief Executive Officer Donald H. Layton noted in a separate statement that the settlement “now allows both companies to move forward.”
