Bank of America Corp., the second- largest U.S. lender, said it reached a $950 million settlement tied to residential mortgage securities backed by Financial Guaranty Insurance Co.
The accord resolves outstanding litigation with FGIC, as well as Bank of New York Mellon Corp., the trustee on the securities, Charlotte, North Carolina-based Bank of America said today in a statement. Bank of America has paid about $900 million under the agreement and expects to disburse an additional $50 million, the lender said.
Chief Executive Officer Brian T. Moynihan has committed more than $50 billion to resolve disputes with regulators and investors over foreclosures and shoddy mortgages. The latest accord reimburses FGIC, which backed trusts tied to Bank of America loans and investors such as Fir Tree Partners. Fir Tree, a $12 billion private investment firm, said in a separate statement that it helped structure the accord.
“This unique global settlement provides both significant direct cash payments to the RMBS trusts and increased long-term value to all FGIC policyholders,” David Proman, director of structured products at Fir Tree, said in the statement.
The sum includes $584 million for FGIC and $365 million in cash payments to RMBS trusts, according to the statement.