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Bank of America (BAC) Confirms Terms in Global Settlement Ruling, Will Pay $11.8 Billion

February 9, 2012 3:56 PM EST Send to a Friend
Bank of America Corporation (NYSE: BAC) today confirmed it has joined the other four largest mortgage servicers in agreeing in principle to the terms of a global settlement resolving federal and state investigations into certain origination, servicing and foreclosure practices.

The settlement with 49 state attorneys general, the United States Department of Justice and other federal agencies would extend additional relief to homeowners who are struggling to make mortgage payments and to make refinancing options available to more homeowners.

Under the agreements in principle, Bank of America expects to develop new or enhanced programs to provide borrower assistance and refinancing assistance, to make direct payments to state and federal governments and borrower restitution, and to agree to national servicing standards. The agreements in principle are subject to ongoing discussions among the parties and completion and execution of definitive documentation, as well as required regulatory and court approvals.

The company would develop proprietary programs to provide expanded mortgage modification solutions, including broader use of principal reduction if permitted by the mortgage investor. Short sales would be further facilitated, and the company may offer additional assistance programs, for example deeds-in-lieu of foreclosure and funds for families transitioning out of homeownership. Programs for unemployed, military service members and other customers with identified special situations also may be enhanced. On mortgages that Bank of America owns, the company would expand refinancing opportunities or lower interest rates to provide reduced payments for many homeowners who are current on their payments but owe more than the current value of their homes.

Bank of America is finalizing its program enhancements and expects to provide additional details of eligibility requirements and implementation plans following finalization of the settlement terms.

Under an agreement in principle with the Federal Housing Administration (FHA), Bank of America also expects to resolve and otherwise limit its exposure for certain claims relating to the origination of FHA-insured mortgage loans, primarily by Countrywide prior to and for a period following Bank of America’s acquisition of that lender.

Bank of America’s commitment under the agreements in principle is $11.8 billion, including the following:
  • Approximately $7.6 billion in borrower assistance, including targeted principal reduction.
  • Approximately $1.0 billion in refinancing assistance to customers in the participating states.
  • Approximately $2.25 billion in direct payments to state and federal governments and in borrower restitution, of which $1.9 billion would be an upfront cash payment and the remaining $350 million, would be paid only if Bank of America failed to meet certain principal reduction thresholds over a three-year period.
  • Up to $1.0 billion in payments to settle FHA claims, of which $500 million would be an upfront cash payment, and the remaining $500 million would be paid only if Bank of America fails to meet certain principal forgiveness levels over a three-year period.




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Loan modification
Marci on 2012-07-11 09:23:07
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Received a letter that they were working on my modification on April 9, 2012. As of yesterday, they told me the program has not even been implemented. According to News Press release of May 8, 2012 "Buliding on home retention and payment assitance programs already in place, we are meeting our obligation to deliver this additional relrelied to our customers following the completion of the recent global settlement

Bank of America New Program
PJ on 2012-07-07 17:05:26
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I was contacted by B of A about a new program. After much excruciating time on my part asking numerous questions; it came down to this. We don't know anything about how the program works or if you would be eligible but why don't you apply AGAIN - (I have applied and was wrongfully denied three times). I've fed ex'd letters to all the major players at B of A - wrote my representatives but B of A continues to play the game of "Let's still pretend we are doing the right thing for our customers." Why isn't there a mass boycott of B of A. When they did this to me I closed my card, line of credit and everything else I had with them

global settlement
steve chubin on 2012-06-08 09:52:21
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boa;they have done everything to me as they have done to everyone.they will look for everyway to decline most of us. once again they will cheat us and the gov't. they have been trained to be crooks. why would they change now. why not let everyone out of jail to help all the people they have hurt or killed. same b.s.

Just Bad Behavour
Marc on 2012-05-11 12:41:33
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The greed from B of A has been obvious, they apply fees to everything, i make a online payment there is a charge, pay by phone there is a charge, you cant even pay them without gettting a charge. I also have been trying to modify and only need the intererst dropped without them charging 5 ot 6 thousand in refinace fees, they claim as part of this settlement interest will be reduced, believe it when you see it.

Countrywide, BofA, Recontrust
So Frustrated in So. Calif on 2012-05-04 12:51:22
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Submitted 4 modifications since 2010. BoA ignored & dropped the ball 3 times.

Spoke to HUD who said mod is a no-brainer. At 6.75%, plenty of room to maneuver.

Finally reached underwriting in early Mar 2012 with Trustee sale looming on 3/12. Despite repeated requests from BoA, Recontrust refused to postpone sale without direct instructions from "investor" Fannie Mae.

Home sold. Opening bid 200K below what's owed. No bids received. Home reverted to investor.

Told to move out by May. Signed "cash for keys." 12 days later, sale rescinded. Next sale date June 7.

Still waiting for trial mod but owing to existing backlog plus global settlement, it could take longer... No end in sight.

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