BofA Sets $165 Million Accord With NCUA on MortgagesHugh Son and Chris Dolmetsch
Bank of America Corp. and the National Credit Union Administration reached a $165 million accord to cover losses on purchases of residential mortgage-backed securities by credit unions that failed, the agency said.
The bank didn’t admit fault in the agreement, according to a statement today from the NCUA. Bank of America, the second-largest U.S. lender by assets, ranked as the biggest mortgage provider before the housing market bubble burst.
Federal agencies and government-backed lenders such as Fannie Mae have been demanding refunds on home loans and related securities bought from banks after discovering false data about the borrowers and properties. Bank of America has spent more than $40 billion to settle claims tied to flawed loans and foreclosures.
“We have a statutory obligation to secure recoveries for credit unions and ensure that consumers remain protected,” NCUA Chairman Debbie Matz said in the statement from the Alexandria, Virginia-based agency. “We will continue to expend every possible effort to fulfill that important responsibility.”
Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment on the settlement. The firm said in a February regulatory filing it agreed to a preliminary settlement on Jan. 11 that will be covered by existing reserves.
The NCUA, which insures deposits for more than 94 million account holders, said it has obtained $335 million from home lenders in settlements including the Bank of America accord, with more still pending.
The agency’s board said March 29 it’s withdrawing from efforts to scrutinize an $8.5 billion settlement between Bank of America and bond investors that would resolve claims on mortgage securities issued by the company’s Countrywide unit. A May 30 hearing is scheduled in New York State Supreme Court in Manhattan.
BlackRock Inc. and Pacific Investment Management Co. are among institutional investors supporting the Countrywide deal, while American International Group Inc. has said Bank of America is “drastically underpaying.”
The case is In the matter of the application of the Bank of New York Mellon, 651786-2011, New York State Supreme Court (Manhattan).