Bank Of America Loss Mitigation

22 Institutional Investors in Countrywide-Issued RMBS Announce Global ...

/PRNewswire/ -- Today, 22 institutional investors represented by Gibbs & Bruns LLP ("Institutional Investors") announced they had achieved a settlement with Bank of America and Countrywide of repurchase and mortgage servicing claims on 530 Countrywide-issued residential mortgage backed securities trusts (the "Covered Trusts") for which BNY Mellon serves as the Trustee.  

(Photo: http://photos.prnewswire.com/prnh/20110629/DA27905 )

The settlement, which is subject to court approval, includes the following key terms:

Payment by Bank of America and/or Countrywide of to settle mortgage repurchase and servicing claims owned by the 530 Covered Trusts; Implementation of servicing changes and improvements, described in greater detail below, that are expected to improve outcomes for borrowers and investors; The filing by BNY Mellon as Trustee of a proceeding seeking court approval of the settlement; and, An agreement by the Institutional Investors to intervene in that proceeding and use their best efforts to obtain approval of the settlement.   settlement payment is also in the best interest of the Covered Trusts.  Our clients therefore requested that the Trustee enter into the settlement and they intend to intervene in court to request that the Court approve it."  

The settlement addresses more than mortgage repurchase claims:  it also includes improvements in mortgage servicing that will benefit borrowers and investors alike.  Bank of America has agreed to move the servicing of high-risk loans for troubled borrowers to qualified sub-servicing firms, at Bank of America's expense.  The agreement also clarifies loss mitigation standards, improves servicing for borrowers and investors alike, and benchmarks Bank of America's servicing performance to industry norms.  Bank of America has committed to pay agreed upon fees to the Covered Trusts if these servicing standards are not met on loans it continues to service.  

"Our clients are pleased that Bank of America has agreed to take the steps necessary to put these claims behind it.  They are also grateful for the helpful involvement of BNY Mellon as Trustee and its willingness to take the steps needed to consummate the settlement.  Bank of America has charted a path our clients expect other banks will follow," added Ms. Patrick.

$8.5 Billion | Bank of America Announces Agreement on Legacy ...

Agreement Covers Nearly All Legacy Countrywide-Issued First-Lien Private-Label RMBS Exposure, Represents 530 Trusts With Original Principal Balance of $424 Billion Bank of America and Countrywide to Pay $8.5 Billion to Settle Claims; Will Provide an Additional $5.5 Billion in the Second Quarter of 2011 for Representations and Warranties Exposure At Quarter End Will Have Settled or Provided Additional Reserves for a Substantial Portion of the Original Principal Balance of Representations and Warranties Exposure With Settlement and Additional Mortgage-Related Costs, Company Expects to Report Second-Quarter 2011 Loss of $0.88 to $0.93 Per Share, Including a Goodwill Impairment Charge of $2.6 Billion Excluding Mortgage Items and Other Non-Operating Items, Company Expects to Report Second-Quarter 2011 Net Income of $0.28 to $0.33 Per Share

CHARLOTTE, N.C., Jun 29, 2011 (BUSINESS WIRE) –

Bank of America Corporation today announced that it has reached an agreement to resolve nearly all of the legacy Countrywide-issued first-lien residential mortgage-backed securitization (RMBS) repurchase exposure, representing 530 trusts with original principal balance of $424 billion.

The settlement with The Bank of New York Mellon (BNY Mellon), the trustee for the RMBS trusts covered by the settlement, is supported by a group of major institutional investors represented by Gibbs & Bruns LLP, and is subject to final court approval and certain other conditions. With this agreement and other mortgage-related actions in the second quarter of 2011, the company believes it will have recorded reserves in its financial statements for a substantial portion of its representations and warranties exposure as measured by original unpaid principal balance. The company also is estimating a range of possible loss for the remainder.

“This is another important step we are taking in the interest of our shareholders to minimize the impact of future economic uncertainty and put legacy issues behind us,” said Bank of America Chief Executive Officer Brian Moynihan. “We will continue to act aggressively, and in the best interest of our shareholders, to clean up the mortgage issues largely stemming from our purchase of Countrywide.”

The agreement includes a cash payment of $8.5 billion to the covered trusts to be made after final court approval of the settlement. Bank of America also intends to record an additional $5.5 billion provision to its representations and warranties liability for both Government-Sponsored Enterprises (GSE) and non-GSE exposures in the second quarter of 2011.