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NEW YORK: Lending giant Bank of America (BoA) has agreed to settle claims brought by state attorneys general regarding certain risky loans that originated by Countrywide Financial Corp, a deal that could be worth $8.6 billion, media report said.

“In a sweeping deal that could be worth more than $8.6 billion, Bank of America Corp has agreed to settle claims brought by state attorneys general regarding certain risky loans originated by Countrywide Financial Corp,'' the Wall Street Journal said. T he costs of the programme “have already been estimated and accounted for'' by Bank of America as part of its acquisition of Countrywide, a BoA spokesperson told the Wall Street Journal.

Quoting the spokesperson the daily said : **The deal would cover as many as 3,90,000 borrowers and would apply to borrowers who took out sub-prime loans with adjustable or fixed interest rates as well as those with option adjustable-rate mortgages that a re serviced by Countrywide, which was acquired by Bank of America Corp on July 1.''

Countrywide Financial Corporation is a diversified financial marketing and service holding firm engaged primarily in residential mortgage banking and related businesses.

The newspaper further said “the cost of the program will be shared by Bank of America and investors who own securities composed of mortgages originated by Countrywide or by third parties who sold those loans to Countrywide.''

Under the terms of the deal, BoA has agreed to, where possible, modify the terms of these loans and will first try to refinance borrowers into government-backed loans under the federal Hope for Homeowners programme, which will generally require a reducti on in the principal of the borrower's loan, the report said. - PTI

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