WASHINGTON (Appraisal Institute) – Bank of America will pay $330 million to buy back home loans from Freddie Mac on reports the loans were flawed.
The Charlotte, N.C.-based bank agreed to repurchase the loans “because the valuation method used at origination did not meet the investor’s technical requirements.” Dan Frahm of Bank of America claims the flaws have been corrected and that payments on most of the purchased loans are current.
It is unknown whether a similar buyback is planned with Fannie Mae.
Bank of America and Freddie Mac announced a $1.28 billion settlement back in January 2011 as a result of faulty loans sold by Countrywide. Its backlog of refund requests for bad loans reached $16.1 billion in first quarter 2012, causing Fannie Mae to cease accepting Bank of America loans.