Bank of America Settles Fannie Mae and Freddie Mac Claims

Bank of America announced on Monday that it would take a $2 billion charge to settle claims with Freddie Mac and Fannie Mae.

The agreements center on loans that Countrywide Financial sold to the two government-controlled entities. Bank of America bought Countrywide in 2008.

The bank also said it would record a $3 billion provision in the fourth quarter to repurchase obligations for home loans sold by Bank of America affiliates to Fannie Mae and Freddie Mac. These actions resolve substantial legacy issues in the best interest of our shareholders,” the president and chief executive, Brian T. Moynihan, said in a statement. “Our goals remain the same: put these issues behind us; focus on serving customers and clients; and continue to help distressed homeowners facing difficult times.” As part of the deal, Bank of America made a $1.34 billion net cash payment to Fannie Mae and another to Freddie Mac for $1.28 billion. Both were paid on Dec. 31.

The deals with Fannie Mae and Freddie Mac, the company said, will nearly resolve all the claims against Countrywide, which arose “out of alleged breaches of selling representations and warranties” related to mortgages.

Bank of America, based in Charlotte, N.C., is set to report fourth quarter-earnings in mid-January.

Prior to the announcement on Monday, analysts had estimated that the bank would earn $0.253 a share for the period, according to Bloomberg data. The company posted a loss of $0.77 a share in the third quarter.