Bank of America close to $8.5 billion mortgage settlement
CHARLOTTE (MCT)— Bank of America Corp. is close to reaching an agreement to pay $8.5 billion to settle claims by a group of investors that took losses on soured mortgage-backed securities, people familiar with the matter said.
The settlement could be announced as early as Wednesday morning. The Charlotte bank's board was to meet Tuesday on the matter, the people said.
Bank of America began talks last fall with the investors, which include money manager BlackRock Inc. and the Federal Reserve Bank of New York. The investors bought the loans from Countrywide Financial Corp., which Bank of America purchased for $4 billion in 2008.
The agreement would address a significant amount of risk the bank faces from requests from investors to buy back mortgage loans purchased during the housing boom, the people said. Bank of America and other large banks are now taking losses on these requests, the latest fallout from the housing crisis.
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