Bank of America Corp. (NYSE: BAC) Agrees to Pay Fannie & Freddie $2.8 Billion On Bad Home Loans Claim

Bank of America Corp. (NYSE: BAC ) yesterday (Monday) agreed to pay Fannie Mae (OTC: FNMA ) and Freddie Mac (OTC: FMCC ) $2.8 billion to settle claims that it sold the mortgage finance companies bad home loans that were issued by its troubled Countrywide Financial unit. The announcement sparked a rally in the banking giant’s shares in New York trading, pushing BofA stock up as much as 4.5%. Analysts said investors were relieved the bank would not have to buy back billions of dollars of home loans it sold to investors at the height of the housing boom. " This takes away a nice headline risk " for Bank of America, Alan Villalon, a senior bank analyst at Chicago-based Nuveen Investments told Reuters.