BofA settles for $165 million with credit union regulator

Tue Apr 2, 2013 12:48pm EDT
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By Aruna Viswanatha

WASHINGTON (Reuters) - Bank of America Corp (BAC.N: Quote) agreed to pay $165 million to settle charges by the U.S. credit union regulator involving sales of mortgage-backed securities to corporate credit unions that led them to fail, the regulator said on Tuesday.

In February, the bank disclosed it had reached a preliminary agreement with the National Credit Union Administration, and said it would be covered by existing reserves, but did not disclose a value at the time.

The settlement adds to a growing list of mortgage-related legal troubles Bank of America has been able to put behind it, after sustaining more than $40 billion in losses from its home loan business since the financial crisis.

Most of those losses stemmed from its 2008 purchase of Countrywide Financial, once the largest U.S. subprime mortgage lender.

The new settlement is intended to resolve claims concerning mortgage securities offerings that the regulator had threatened to sue the bank and its Countrywide and Merrill Lynch units over, Bank of America said in its annual report.

A bank spokesman declined comment on Tuesday beyond the earlier filing. The credit union regulator did not release settlement papers and declined to provide additional details about the deal.

In recent months, Bank of America has moved closer to ending its mortgage troubles, with more than $14 billion in settlements announced in January alone.

Around $3 billion went to end a loan-by-loan review of past foreclosures mandated by the government. Another $11.6 billion went to resolve allegations from government mortgage finance company Fannie Mae that the bank improperly sold mortgages that later soured, and to resolve questions about foreclosure delays.   Continued...

The logo of the Bank of America is pictured atop the Bank of America building in downtown Los Angeles November 17, 2011. REUTERS/Fred Prouser