BoA agrees $8.6bn predatory lending settlement

CHARLOTTE, NC - In a settlement with 11 US state attorney generals, Bank of America has agreed to cut interest rates and principal on troubled mortgages originated by Countrywide Financial. The agreement is believed to cost Bank of America (BofA) as much as $8.6 billion.

Attorneys from Arizona, California, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington took part in the deal. Bank of America bought Countrywide, once the largest US mortgage lender, in July this year for $4 billion. It had to be saved from failure after taking on risky US subprime mortgages.

The California state attorney general's office says it marks probably the largest predatory lending settlement in history, in a deal pushed through by state attorneys trying to reverse rising numbers of US home repossessions. BofA says it was committed to helping the millions of Countrywide customers still in fear of losing their homes.

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