The Real Deal New York

Bank of America settles AIG mortgage suit for $650M

Deal covers allegedly faulty mortgage securities purchased from Countrywide Financial

July 16, 2014 01:35PM

From left: Robert Benmosche and Brian Moynihan

From left: AIG’s Robert Benmosche and Bank of America’s Brian Moynihan

Bank of America will pay American International Group at least $650 million to settle a suit over faulty mortgages.

The settlement relates to home loans that AIG purchased from Countrywide Financial, which Bank of America bought in 2008, Bloomberg News reported. AIG alleged that residential mortgage-backed securities it bought from Countrywide did not conform to underwriting guidelines. The commercial insurer sued Bank of America for $10 billion for losses it allegedly suffered due to the purchase.

Bank of America reported $4 billion in legal expenses tied to disputes over faulty mortgages in its second-quarter earnings report on Wednesday, the news outlet reported. [Crain’s]Tom DiChristopher

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