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Freddie Mac settles with Bank of America over home loans for $404 million

Freddie MacFreddie Mac announced on Monday that it has settled with Bank of America for $404 million over claims related to home loans sold to the government-sponsored enterprise before and during the financial crisis.

Under the agreement, BofA will pay $404 million—less $13 million for completed repurchases and adjustment reconciliation—and Freddie will release the bank from existing and future repurchase obligations for approximately 716,000 loans originated between 2000 and 2009. The payment will be covered by the bank’s existing reserves.

“We are pleased to have reached this agreement with Bank of America, which now allows both companies to move forward,” Freddie Mac CEO Donald H. Layton said. ”We continue to make very good progress in recovering funds that are due to the American taxpayer, as well as resolving Freddie Mac’s legacy repurchase issues.”

Since 2010, Bank of America has agreed to pay over $45 billion to settle claims related to the U.S. housing and financial crisis. The bank agreed to pay $3.6 billion to Fannie Mae in January to resolve repurchase claims over Countrywide and BofA loans, Reuters reports.

The U.S. government is seeking nearly $1 billion in damages from BofA after a jury found the bank liable in October for defrauding Fannie and Freddie over defective mortgages sold by Countrywide. The Federal Housing Finance Agency, Fannie and Freddie’s conservator, is suing the bank to recover over $57 billion in losses related to mortgage securities.

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