Photo found on BBC
Bank of America has agreed to pay US government mortgage agency Fannie Mae $3.6bn (£2.2bn) to settle claims relating to residential home loans.
In addition, it has agreed to buy back 30,000 mortgages for $6.75bn, and pay a further $1.3bn in compensation.
Fannie Mae argued that the bank had sold it toxic home-loan debts between 2000 and 2008.
The agency supports the US mortgage market, which lapsed into turmoil in 2008 as the housing bubble imploded.
In the run-up to the financial crisis of 2007-8, home loans grouped together and sold on as investments became increasingly popular.
When the underlying mortgage holders were unable to repay their debts, the investments plummeted in value, with disastrous consequences for banks all over the world.
Freddie Mac is the other government mortgage agency. The two firms lost more than $30bn, partly because of their investments in the subprime mortgages, and were bailed out by the US government.
Since the rescues, US taxpayers have spent more than $140bn to keep the firms afloat.
Bank of America settled with Freddie Mac in 2011.
BBC has the full article
