The deal releases Bank of America, the third largest residential lender in the U.S. according to National Mortgage News MortgageStats, from certain existing and future repurchase obligations for approximately 716,000 loans originated between January 2000 through December 2009, which were subsequently purchased by Freddie Mac.
The payment is fully covered by existing reserves as of Sept. 30, 2013.
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 Layton. We continue to make very good progress in recovering funds that are due to the American taxpayer, as well as resolving Freddie Macs legacy repurchase issues.
This agreement does not cover loan servicing obligations, loans contained in private label securitizations or securities and disclosure claims. But this settlement does absolve the Charlotte-based lender from all representations and warranties claims on whole loans sold by legacy Bank of America and Countrywide to both Freddie Mac and Fannie Mae for these dates.