March 26, 2014FHFA, Fannie Mae Reach Agreement with Bank of America to Resolve PLS Lawsuit
WASHINGTON, DC – Today, the Federal Housing Finance Agency (FHFA) announced an agreement to settle legal claims resulting from Fannie Mae’s (FNMA/OTC) purchase of certain private label securities (PLS) prior to 2008. On March 25, 2014, Fannie Mae, Freddie Mac and FHFA entered into an agreement with Bank of America Corporation and certain affiliates to settle litigation initiated by FHFA relating to investments by Fannie Mae and Freddie Mac in certain residential PLS and to resolve other claims not included in the FHFA litigation. Under the terms of the agreement, Bank of America will make a cash payment of approximately $4.4 billion to Fannie Mae to satisfy these claims and to purchase PLS from Fannie Mae with an unpaid principal balance of approximately $1.9 billion. FHFA’s announcement and the agreement with Bank of America can be found on FHFA’s website.
"This is a fair and appropriate resolution, and we’re pleased to move forward with this matter in the rear-view mirror," said Bradley Lerman, Executive Vice President and General Counsel, Fannie Mae. "Fannie Mae remains focused on helping people to buy a house, rent an apartment or avoid foreclosure as we build a stronger housing finance system for the future."