Fannie, Freddie Score $2.5B+ From BofA To Settle Crappy Loan Buyback Demands; Requests For $10B+ From Other Banks Still Outstanding

The New York Times reports:

• Bank of America announced Monday that it had paid more than $2.5 billion to buy back troubled mortgages and resolve related claims from Fannie Mae and Freddie Mac — deals that may prompt a wave of such settlements by big banks.

• The agreements center on home loans that Countrywide Financial sold to Fannie and Freddie at the height of the mortgage bubble. The government-controlled housing giants, which have suffered billions of dollars in losses in recent years, have said that the lender misrepresented the quality of the loans. Bank of America bought Countrywide in 2008.

• Fannie and Freddie also are looking to collect from other large lenders, including Wells Fargo, Citigroup and Washington Mutual, now owned by JPMorgan Chase.

• Before the Bank of America payments, Fannie and Freddie received about $9 billion from repurchase claims, according to their financial statements. The two firms still have more than $10 billion of requests outstanding. Banks have a major incentive to cut deals with Fannie and Freddie. The two firms currently own or guarantee roughly two-thirds of all new mortgages in the United States.

For more, see Bank of America Buys Back $2.5 Billion in Mortgage Debt.