$5 billion in cash of the nationwide mortgage settlement is going to state and federal governments. Of that, $1 billion is going to pay for Bank of America/Countrywide misdeeds.
This is all in Holder’s statement, and specifically it applies to:
….the origination and underwriting of Federal Housing Administration (FHA)-insured mortgage loans, and systematic inflation of appraisal values concerning these loans, from Jan. 1, 2003 through April 30, 2009. Payment of $500 million of this $1 billion will be deferred to partially fund a loan modification program for Countrywide borrowers throughout the nation who are underwater on their mortgages. This investigation was conducted by the U.S. Attorney’s Office for the Eastern District of New York, with the Civil Division’s Commercial Litigation Branch of the Department of Justice, HUD and HUD-OIG. The settlement also resolves an investigation by the Eastern District of New York, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Housing Finance Agency-Office of the Inspector General (FHFA-OIG) into allegations that Bank of America defrauded the Home Affordable Modification Program.
This sounds like a pretty good deal for Bank of America. Business Insider was speaking to a Bank of America vet the other day who said Moynihan would really just like to write a check and make these lawsuits go away. Looks like he’s getting at least part of his wish.