Bank of America said early Wednesday that it had reached a $8.5 billion settlement with 530 trusts that had purchased residential mortgage-backed securities from Countrywide. The trusts include PIMCO, BlackRock and Goldman Sachs.
The agreement was made with the Bank of New York Mellon, the trustee for the RMBS trusts that had original principal balances of $424 billion. It is subject to final court approval and certain other conditions.
"This is another important step we are taking in the interest of our shareholders to minimize the impact of future economic uncertainty and put legacy issues behind us," said Bank of America CEO Brian Moynihan (left) in a press release. "We will continue to act aggressively, and in the best interest of our shareholders, to clean up the mortgage issues largely stemming from our purchase of Countrywide."
The agreement includes a cash payment of $8.5 billion to the covered trusts to be made after final court approval of the settlement. Bank of America also says it plans to record an additional $5.5 billion provision for both government-sponsored enterprises (GSE) and non-GSE exposures in the second quarter of 2011.