US housing regulators seek over US$6 billion from BofA
October 22, 2013, 12:06 am TWN
U.S. housing regulators are looking to fine Bank of America more than US$6 billion for its role in misleading mortgage agencies during the housing boom, compared with the US$4 billion to be paid by JPMorgan Chase & Co., the Financial Times reported on its website, citing people familiar with the matter.
The FT said the Federal Housing Finance Agency (FHFA), pursuing claims on behalf of finance agencies Fannie Mae and Freddie Mac that back about half the existing U.S. home loans, are seeking the penalty.
FHFA and Bank of America (BofA) could not be reached for comment outside of regular business hours.
Countrywide Financial Corp, the mortgage lender acquired by BofA in July 2008, has cost the bank more than US$40 billion in litigation expenses and other charges linked to its bad subprime mortgages. The bank set aside an additional US$300 million for mortgage litigation in the latest quarter.
JPMorgan reached a tentative US$4 billion deal with the FHFA on Friday to settle claims that the bank misled government-sponsored mortgage agencies about the quality of mortgages it sold them, according to a person familiar with the matter.
JPMorgan also reached a tentative US$13 billion deal with the U.S. Justice Department and other government agencies to settle investigations into bad mortgage loans the bank sold to investors before the financial crisis, a source familiar with the talks told Reuters on Saturday.