Bank of America to pay Fannie Mae $10.3 billion over bad loans
The agreement does not end a lawsuit filed by the federal government over the cost to taxpayers of mortgages that failed, many made by the now-defunct Countrywide.
Along with being one of 10 banks that agreed to pay $8.5 billion to compensate homeowners for wrongful foreclosures, Bank of America also reached an agreement this week to pay $10.3 billion to Fannie Mae over loans that went bad during the housing crisis.
The $10.3 billion settlement with Fannie was mostly over loans originated by Countrywide Financial, which was acquired by Bank of America. We’ve written previously about Countrywide’s Hustle program, which removed many of the checks and balances in its loan underwriting.
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"A favorable resolution of this longstanding dispute between Fannie Mae and Bank of America is in the best interest of taxpayers," Bradley Lerman, executive vice president and general counsel of Fannie Mae, said in a news release. "Fannie Mae has diligently pursued repurchases on loans that did not meet our standards at the time of origination, and we are pleased to have reached an appropriate agreement to collect on these repurchase requests."
The settlement does not end a Justice Department suit against Bank of America accusing the lender and the former Countrywide of costing taxpayers $1 billion by selling bad mortgages to Fannie Mae and Freddie Mac.
"Our lawsuit against Bank of America for its allegedly reckless and fraudulent lending practices is unaffected and is in fact expressly carved out from the settlement that the parties reached today," Ellen Davis, the department's chief public information officer, told Reuters.
The news service explains:
Fannie Mae and sibling Freddie Mac essentially buy mortgages from banks and package them into bonds for investors. But during the mortgage boom, banks sold loans to the two companies that Fannie Mae and Freddie Mac say should never have been because, for example, borrowers had misstated their income. The two mortgage finance companies are pushing banks to buy back the loans.
The agreement calls for Bank of America to pay Fannie Mae $3.6 billion in cash and repurchase about 30,000 loans at a cost of $6.75 billion. Bank of America reached a settlement with Freddie Mac in 2011.
After screwing up our credit by put our Bank account over drawn by letting their credit card company draw $100.00, after the law suit my wife got back $4.90 for all of the illegally high interest rate for their over drawing both of these account, and only the credit card company paid this $4.90 for hundreds of dollars of illegal interest charges.
So as some one posted what is going to make these CEO's pay for their criminal activity, or is this like the "Fast and Furious" activity done by the present administration, who along with false numbers and all the shooting done by mentally ill people in our schools when the NCIC are not doing their job as a Federal Agency on the called for by Law on the books for a complete back ground check on gun buyers?
Political NO just the facts, and no names have been changed to protect those who are not innocent of wrong doing.
Trust-bust them all.
Abolish ALL corporations before corporations overthrow America.
Bring back small business.
People---People---get with the program!!! The politicians are in the pocket(s) of the banks--mortgage companies and stock brokerage houses. The general public couldn't be bothered to get off their VERY PLUMP bums and actually participate in the democracy they live it.
Its simply one of the outcomes of the---- me---me---me generation, well one of these days when the pop hits the fa they will be in for a rude awakening. obama and his lackeys at the justicedept.t. have NO INTENTION of putting of the executives in prison, after all, if they (the execs.) started telling tales it probably would be an embarrassment (at best) for the administration.
Bank of America is getting off with a slap on the wrist. The number of people they have harmed with their "profit first" mentality is staggering. We are one of the families suffering from their corporate fraud, and I am planning on submitting a claim to them. We are the people that modification was supposed to help: didn't buy too much house but lost jobs due to the recession and nothing else. Applied well before the situation became dire; we were still maing the payment, but we only had about a year and a half of expenses saved.
Bank of America told us to stop paying the mortgage or they couldn't help. We didn't feel right about that, so we struggled through another year untilw e couldn't trim anymore and couldn't pay any more and our only option was credit cards. Filed for a modification and were denied twice for no reason (the second time we were denied in writing after being told that we were approved over the phone). Now Bank of America is forcing me to submit 80 pages of application to short sell my house, and they have denied that also, based on spurious claims that they did not get all the paperwork (which I of course have a fax record of sending and copies). Pretty soon we are going to leave the keys on the counter and walk away, literally.
The end result is that we are going to lose the house one way or another, all because they refused to work with us when things weren't so bad. Now that we can afford the mortgage again, we are so far behind that we can't catch up, so we have to get out anyway.
And all they get is a slap on the wrist. I don't care if my share of the settlement is $250. I want some sort of acknowledgment that they were wrong, that their practices in business are harmful.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.