Bank of America announced on Monday that it had reached a settlement with Freddie Mac to resolve issues related to residential mortgages the bank sold to Freddie up to 2009, effectively ending all contractual disputes between the two on loans issued before the financial crisis.
The New York Times reports that the bank said it had agreed to pay $404m to settle all residential mortgage repurchase agreements and other claims related to loans sold from 2000 to 2009. The bank also agreed to pay for some past and potential losses relating to those loans.
Bank of America said it had set aside reserves to cover the settlement. The company declined to comment beyond its news release.
'We are pleased to have reached this agreement with Bank of America, which now allows both companies to move forward', said Freddie Mac’s chief executive, 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'.
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