The nation’s biggest bank said it will pay $8.5 billion to resolve bondholders’ claims that its lenders sold troubled mortgage-backed securities that collapsed when the housing market crashed.
The deal, which must be approved by a court, was announced Wednesday after a group of 22 investors demanded that Charlotte, N.C.-based Bank of America repurchase $47 billion in mortgages that its Countrywide unit sold to them in the form of bonds.
The group includes the Federal Reserve Bank of New York and Blackrock Financial Management. It argued that Countrywide knowlingly continued to service bad loans so that it could run up fees.
Bank of America, which bought Countrywide in 2008 for $4 billion, did not admit to those claims in proposing the settlement.
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