""Bank of America"":https://www.bankofamerica.com/ and ""Freddie Mac"":http://www.freddiemac.com/ jointly announced Monday an agreement resolving all remaining rep and warranties claims on loans BofA sold to the GSE through the end of 2009.[IMAGE]
Under the terms of the agreement, BofA will pay Freddie Mac a total of $404 million (subtracting $13 million in credits on repurchases already made) to be released from existing and future repurchases on approximately 716,000 loans originated in the 2000s. [COLUMN_BREAK]
The payment also compensates Freddie Mac for past and potential future losses relating to denials, rescissions, and cancellations of mortgage insurance.
The agreement doesn't cover loan servicing obligations, loans contained in private label securitizations, or securities and disclosure claims.
""We are pleased to have reached this agreement with Bank of America, which now allows both companies to move forward,"" said Freddie Mac CEO Donald H. Layton. ""We continue to make very good progress in recovering funds that are due to the American taxpayer, as well as resolving Freddie Mac's legacy repurchase issues.""
The payments are fully covered by BofA's existing reserves as of the end of Q3, the bank said in its statement.
The latest agreement furthers BofA's efforts to clear out issues between itself and the GSEs stemming from mortgage issues on its own legacy loans and those sold by Countrywide, which it acquired in 2008. Previous agreements resolved claims on loans sold to Fannie Mae and Freddie Mac through 2008.