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Bank of America Announces Agreement on Mortgage Repurchase Claims With Monoline Insurer Assured Guaranty
Posted April 15, 2011
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Fully Addresses Assured Guaranty's Outstanding and Potential Repurchase Claims Representing Original Collateral Exposure of Approximately $35.8 Billion
CHARLOTTE -- Bank of America Corporation today announced that the company, including its legacy Countrywide Financial Corporation affiliates, has reached an agreement with Assured Guaranty Ltd. and its subsidiaries to resolve all of the monoline insurer's outstanding and potential repurchase claims related to alleged representations and warranties breaches involving 29 first- and second-lien residential mortgage-backed securitization (RMBS) trusts where Assured provided financial guarantee insurance. The agreement also resolves historical loan servicing issues and other potential liabilities with respect to these trusts.
"This agreement is an important step towards resolving non-Government Sponsored Enterprise legacy issues on terms beneficial to our company," said Terry Laughlin, Legacy Asset Servicing executive. "As we have said on numerous occasions, our goals remain the same: focus on serving customers and clients, continue to help distressed homeowners facing difficult times and address our legacy issues."
The agreement covers 21 first-lien RMBS trusts and eight second-lien RMBS trusts, representing total original collateral exposure of approximately $35.8 billion, with total principal at risk (which is the sum of outstanding principal balance on severely delinquent loans and principal balance on previously defaulted loans) of approximately $10.9 billion, which includes principal at risk previously resolved.
The agreement includes a cash payment of approximately $1.1 billion to Assured Guaranty, as well as a loss-sharing reinsurance arrangement that has an expected value of approximately $470 million, and other terms. The total cost of the agreement is currently estimated to be approximately $1.6 billion, which the company has fully provided for in its accounts as of March 31, 2011.
Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 58 million consumer and small business relationships with approximately 5,800 retail banking offices and approximately 18,000 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies, and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange
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