Bank Of America Sets Aside $14 Billion In Settlement

Jun 29, 2011, 18:02 by Sarah Long

Bank of America said Wednesday it would set aside $14 billion to settle claims that mortgage securities it sold to big investors turned into toxic securities.

The bank said it was ready to pay $8.5 billion in claims made by the Federal Reserve Bank of New York, Pimco, BlackRock, ING Capital LLC, and 18 others.

"This is another important step we are taking in the interest of our shareholders to minimize the impact of future economic uncertainties," BofA's Chief Executive Officer Brian Moynihan said in a statement.

"We will continue to act aggressively, and in the best interest of our shareholders, to clean up the mortgage issues largely stemming from our purchase of Countrywide," he said.

The bank said the settlement would resolve "nearly all of the legacy Countrywide-issued � mortgage-backed" securities, which the bank absorbed when it bought Countrywide in 2008.

BofA said it expected to post a $6.4 billion charge in the second quarter of 2011 related to the settlement.

In addition, $2.6 billion of the $14 billion would be written off as a devaluation on its mortgage business.

Source: UPI