Lawmakers Question Bank of America Settlement

By Kyle Chezum Updated on 1/12/2011

1/12/11

Several state representatives collaborated on a signed letter sent to the agency that oversees both Fannie Mae and Freddie Mac, asking for an explanation of the proceedings that led to the recent settlements reached between major banks and Fannie and Freddie.  Most of the $3.3 billion settlement came from Bank of America, who contributed $2.b billion.

Lawmakers are concerned that the government and taxpayers have gotten the bad end of the deal, as it has been established that $3.3 billion represents only a minor portion of the mortgage liability held by the government as a result of errors and contract breaches.  In the letter, representatives demanded “information on how the FHFA determined that the combined $3.3 billion settlement represented the best possible recovery of funds available to taxpayers.”

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