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