BOFA Pays Over $9 Billion to Settle Fannie Mae and Freddie Mac Claims

In late March, Bank of America corp.  agreed to pay $9.5 Billion to settle claims that it issued bad loans to Fannie and Freddie during the housing boom, which contributed to the country’s financial crisis. Many investors were sold Fannie Mae preferred stock and/or Freddie Mac preferred stock in 2008 by many brokerage firms without realizing the precarious financial position of both companies. The Federal Housing Finance Agency, the agency that regulates both Fannie and Freddie, brought litigation against many of America’s largest banks, seeking compensation for the bad loans they originated. Many investors are pursuing their claims for losses in the Fannie and Freddie preferreds through FINRA arbitration.

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