Bank of America Corp. said today that it settled mortgage-backed securities claims with the monoline insurer Financial Guaranty Insurance Co. (FGIC), the Wall Street Journal reported today. The bank said that it had settled seven of the nine trust settlements and expected to pay a total of about $950 million. The bank also said that the expenses were covered by legal reserves. Legal expenses pushed Bank of America to a first-quarter loss. The bank said it had a $6 billion litigation expense for the quarter, up from $2.2 billion in the same period a year ago. Of that, about $3.6 billion was related to the bank's settlement last month with the Federal Housing Finance Agency, where the bank agreed to pay some $9.5 billion to settle accusations that it had misled Fannie Mae and Freddie Mac about the quality of mortgage-backed securities it was selling. The bank had previously estimated that the FHFA settlement would cut earnings by about $3.7 billion before taxes. The bank has now settled with four of the five monoline insurers that had sued the bank over mortgage-backed securities.
