Bank of America Handing Over $500 Million Settlement to Mortgage Investors

Bank of America seems to be in hot water again. The bank announced recently that it would be paying out a $500 million settlement to investors that put money into mortgage-backed investments back in 2008.

The investors stated they were misled about $350 billion worth of mortgage-backed investments, and they took their claim to the bank’s front door. The bank representatives said they are happy about the settlement because it will resolve most of their claims and issues. However, Bank of America is still waiting for court approval of a settlement made two years ago with Bank of New Mellon Corp. If the claim isn’t resolved soon, it could mean more money out of Bank of America’s pocket to put it behind them.

Bank of America was a commonly talked about subject in the mortgage field because of their decision to buy Countrywide a while back. Countrywide was known as a lender of exotic mortgages and many of the loans were defaulted on, dealing a significant blow to the company. A slew of lawsuits and quarterly losses are at the forefront of Bank of America executives’ minds, as well as those of professionals throughout the banking industry. In early January, Bank of America had to pay out $2.7 billion to settle a dispute with Fannie Mae. The bank was forced to buy back a large number of mortgages that they sold to the agency. Another recent settlement from Bank of America was the one it had to pay to dispute the allegations that Bank of America, as well as other banks, had wrongfully foreclosed on several owners. The company paid $1.1 billion to dispute this claim, which took a toll on their quarterly earnings.

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