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Bank of America reaches $190M settlement with FHLB Seattle

Resolves six-year-old legal claim

Bank of America reached a $190 million agreement with the Federal Home Loan Bank of Seattle, resolving a six-year-old legal claim dealing with mortgage-backed securities sold before the financial crisis. Per Bloomberg:

From the article:

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.

Last year, the Federal Home Loan Bank of Des Moines and the Federal Home Loan Bank of Seattle officially merged. The combined entities would provide funding solutions for more than 1,500 member financial institutions in 13 states when some institutions only cover 2 states. In addition, they would hold about $119 billion in assets.

In April this year, Goldman Sachs also reached a $5 billion settlement over claims related to toxic mortgage bonds sold to investors in the run up to the financial crisis.

The $5 billion settlement agreement resolved actual and potential civil claims by the Department of Justice; the New York and Illinois Attorneys General; the National Credit Union Administrationacting as conservator for several failed credit unions; and the Federal Home Loan Banks of Chicago and Seattle, relating to the Goldman Sachs’ securitization, underwriting and sale of residential mortgage-backed securities from 2005 to 2007.

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