Bank of America has paid out $2.6 billion over allegations leveled by U.S. mortgage giants Fannie Mae and Freddie Mac that it sold loans based on faulty information, according to Bloomberg. In addition to Fannie and Freddie, McLean also purchased the mortgages in question, and the firms are pushing to have loans bought back by lenders that used incorrect data on income or home values that were not correct. The bank announced that it would include an additional $3 billion provision in fourth quarter results.
In October, Bank of America faced a $12.9 billion total of putback demands on mortgages largely associated with government-entities, and announced at the time that $4.4 billion was reserved for handling costs related to the issue. The announcement made on Monday outlines an agreement that will see Bank of America pay $1.28 billion in cash to Freddie Mac over claims on 787,000 loans through 2008 made through Countrywide Financial, while $1.34 will be paid to Fannie Mae.