Bank of America and MBIA ended two pieces of legacy litigation this week, putting to rest a prominent mortgage-backed securities case and a lawsuit challenging MBIA’s 2009 restructuring.

HousingWire covered the story when it broke Monday morning, but the takeaway from it is best summed up in MBIA’s (MBIA) afternoon release: “Bank of America will have no further put-back liability to MBIA with respect to the insured Countrywide transactions,” the insurer wrote.

With those words on record, it’s appropriate to assume Monday’s settlement is a deal that ends years of litigation and blow back between the two firms over soured mortgage-backed securities.

MBIA released an official statement saying the bond insurer and its National Public Guarantee Corp. unit agreed to settle a lawsuit once filed against Countrywide (now part of BofA) for misrepresenting the quality of loans backing mortgage securities that MBIA insured.

The companies settled the dispute with BofA agreeing to pay MBIA $1.7 billion, which includes $1.6 billion in cash and $137 million in MBIA senior notes due in 2034.

In exchange, MBIA is dismissing the mortgage-bond litigation first filed against Countrywide in 2008 and lingering insurance coverage valued at $7.4 billion has been commuted, meaning MBIA has no further coverage obligations for those particular policies.

Of the $7.4 billion in policies commuted, $6.1 billion are tied to credit default swaps held by BofA on commercial real estate exposures.

The New York State Department of Financial Services is still required to sign off on the deal.

“We are very pleased to have reached a comprehensive settlement agreement with Bank of America that improves the outlook for MBIA Insurance Corp. and sets the stage for National to reclaim its leadership position in the U.S. public finance insurance market,” said Jay Brown, MBIA CEO.

As part of the settlement, BofA received five-year warrants to acquire 9.94 million shares of MBIA common stock at the price of $9.59 a share and agreed to dismiss a 2009 legal challenge of MBIA’s massive restructuring—a transformation that created what is now MBIA’s National Public Guarantee Corp. subsidiary.

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