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Bank of America Announces Settlements With Federal Housing Finance Agency (FHFA) and New York Attorney General FHFA Settlement Includes Cash Payment of $6.3 Billion and Purchase of Certain Securities at Fair Market Value


Wed Mar 26 16:38:23 2014 EDT
CHARLOTTE, N.C., Mar 26, 2014 (BUSINESS WIRE) --

--FHFA Settlement Expected to Reduce BAC Q1-14 Net Income by Approximately $0.21 per Common Share


Bank of America today announced it reached a settlement with the Federal Housing Finance Agency (FHFA) as conservator of Fannie Mae and Freddie Mac to resolve all of FHFA's residential mortgage-backed securities (RMBS) litigation with Bank of America, as well as other legacy contract claims.


The FHFA settlement resolves four lawsuits FHFA filed against Bank of America, Countrywide, and Merrill Lynch entities beginning in September 2011, alleging they falsely represented that the underlying mortgage loans complied with certain standards. Approximately $57.5 billion (in purchase cost) of private-label RMBS purchased by Fannie Mae and Freddie Mac are covered by the settlement.


Under terms of the settlement, Bank of America will make cash payments totaling approximately $6.3 billion to Fannie Mae and Freddie Mac. In addition, Bank of America will purchase certain RMBS at fair market value (approximately $3.2 billion). In return, FHFA's pending lawsuits will be dismissed with prejudice and Bank of America and its affiliates will be released from all securities law and fraud claims, as well as certain other claims related to the private-label RMBS in dispute.

The FHFA settlement resolves one of the most significant remaining pieces of RMBS securities litigation facing the company. With this settlement, Bank of America has now resolved approximately 88 percent of the unpaid principal balance of all RMBS as to which RMBS securities litigation has been filed or threatened for all Bank of America-related0 entities.


In addition to the matters referenced above, the company has previously disclosed that it is subject to inquiries and investigations, and may be subject to penalties and fines by the U.S. Department of Justice (DOJ), state Attorneys General and other members of the RMBS Working Group of the Financial Fraud Enforcement Task Force (collectively, the Governmental Authorities), and is a party to civil litigation proceedings brought by the DOJ and certain other Governmental Authorities regarding the company's RMBS and other mortgage-related matters. The company continues to cooperate with and has had preliminary discussions about a potential resolution of these matters with certain Governmental Authorities. For additional information, refer to the company's 2013 Form 10-K, including "Risk Factors."


Bank of America also announced that it entered into an agreement to resolve a 2010 lawsuit brought by the New York Attorney General (NYAG) against Bank of America and certain former executives, alleging a failure to disclose losses at Merrill Lynch prior to the company's acquisition of Merrill Lynch. The company has agreed to pay $15 million to settle the NYAG's claims against it, reflecting the NYAG's cost of investigation and litigation, and to adopt certain corporate governance changes.




www.bankofamerica.com


http://cts.businesswire.com/ct/CT?id=bwnews&;sty=20140326006484r1&sid=cmtx6&distro=nx


SOURCE: Bank of America


Investors May Contact:
Anne Walker, Bank of America, 1.646.855.3644
Lee McEntire, Bank of America, 1.980.388.6780
Jonathan Blum, Bank of America (Fixed Income), 1.212.449.3112
Reporters May Contact:
Jerry Dubrowski, Bank of America, 1.980.388.2840
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