BofA Says It Settled Seattle Bank Mortgage Suit for $190 Millionby
Bank of America Corp. said it reached a $190 million agreement to resolve a six-year-old legal claim from Federal Home Loan Bank of Seattle over mortgage-backed securities sold before the financial crisis.
The Charlotte, North Carolina-based firm disclosed the April deal in a regulatory filing on Monday, noting it already set aside funds to cover the cost. Seattle Bank, one of a dozen government-sponsored regional lenders that supplied financing to member banks and finance companies, had accused Bank of America of making misstatements and omitting information about the quality of mortgages underpinning the securities.
The accord joins a growing list of payments to Seattle Bank, which brought claims against more than 10 lenders in 2009 and merged last year with Federal Home Loan Bank of Des Moines. Goldman Sachs Group Inc. agreed to pay $37.5 million to that successor as part of a $5.1 billion settlement last month with the U.S. Department of Justice.
Bank of America, which purchased subprime home lender Countrywide Financial Corp. in 2008 and inherited its legal problems, has paid more than any other U.S. lender to resolve complaints over sales of residential mortgage-backed securities, according to data compiled by Bloomberg Intelligence.