BofA, Freddie are in talks to settle mortgage dispute
According to The Wall Street Journal, Freddie Mac and Bank of America (BAC) are in settlement talks to resolve disputes over more than $1.4 billion in faulty mortgages that Freddie argues the bank should have to take back.
The deal would be the second such agreement between Bank of America and Freddie since 2011. It would largely shield the bank from any future repurchase demands from Freddie stemming from loans sold before 2012. The second-largest U.S. bank by assets is hoping to settle before the end of the year, said one of the people.
Terms of the potential settlement couldn't be determined. Such settlements with other banks have varied depending on the terms of the agreement and the amount of loans covered. While banks typically press to pay less than the full amount of outstanding claims, they sometimes will end up paying slightly more to prevent any new repurchase demands from materializing on loans sold as long ago as 2000.