Bank of America settles Fannie and Freddie

Bank of America settles Fannie and Freddie

Fannie Mae and Freddie Mac, the U.S. government mortgage lenders, accepted US$2.8-billion from Bank of America to settle claims of the bank providing faulty loans.
 
The cost to Bank of America was less significant than what some investors expected, according to the Washington Post, and the bank’s stock increased by 6.4 per cent on Monday January 3 after the news was released.
 
The settlement helps Bank of America avoid “a doomsday scenario,” analyst Paul Miller of FBR Capital Markets told the Post, but Fannie Mae can still pursue additional claims against the bank whereas Freddie Mac has now closed any more potential claims.
 
Fannie spokesperson Janis Smith called the deal a “fair and responsible resolution,” though others cite it as a “gift” to the bank because the losses will now be incurred on the government mortgage lenders.
1 Comments
  • padarzoli 2011-01-05 7:20:19 AM
    Peter has paid Paul out, while the folks got screwed... there are so many problems in the USA one of them they are canniving ignorent and robbing each other. Always did and it will make them pay now.
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