FANNIE AND FREDDIE WERE THE VICTIMS...

not the culprits, no matter what Limbaugh, Hannity and Beck say.

BofA settlement with Fannie, Freddie "clears air"
Jan 3 06:27 PM US/Eastern
By PALLAVI GOGOI
AP Business Writer

NEW YORK (AP) - Bank of America Corp. reached a $2.8 billion settlement with Fannie Mae and Freddie Mac over claims that one of its businesses sold bad mortgages.

The settlement is the biggest yet involving banks and the two government-backed mortgage giants, which continue to suffer huge losses from the collapse of the housing market. Analysts and investors have been waiting to see how hard a line Fannie and Freddie would take with big mortgage lenders such as Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co.

The claims stem from mortgages sold to Fannie and Freddie by former mortgage giant Countrywide Financial, which Bank of America bought in 2008. The two government-backed agencies buy mortgages from lenders and re-sell them to investors. They want banks to buy back mortgages that had incorrect information about the income and other qualifications of borrowers.

It was the second settlement in a week. The first involved Ally Financial Inc., which agreed to pay $462 million in lieu of buying back faulty mortgages from Fannie Mae in the future.