8-KOther EventsExhibits & Filings

BANK OF AMERICA CORP /DE/ 8-K Report, Corporate Update (Mar 26, 2014)

Filed March 26, 2014For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) announced on March 26, 2014, a significant settlement resolving all residential mortgage-backed securities (RMBS) litigation with the Federal Housing Finance Agency (FHFA), acting as conservator for Fannie Mae and Freddie Mac. This settlement also covers other legacy contract claims related to these entities. Additionally, the company reached an agreement with the New York Attorney General concerning legacy disclosure matters stemming from the Merrill Lynch merger. These settlements represent a crucial step in resolving substantial legal and financial overhangs for Bank of America. The resolution of the extensive RMBS litigation with the FHFA, a major claimant, should provide greater clarity on future litigation costs and financial liabilities. The settlement with the New York Attorney General addresses a separate, though related, legacy issue from a significant past acquisition, further cleaning up the company's balance sheet and mitigating potential future legal expenses.

Key Highlights

  • 1Settlement reached with FHFA to resolve all RMBS litigation and legacy contract claims involving Fannie Mae and Freddie Mac.
  • 2Agreement also reached with the New York Attorney General regarding legacy disclosure matters from the Merrill Lynch merger.
  • 3These settlements aim to resolve significant outstanding legal and financial issues for Bank of America.
  • 4The FHFA litigation resolution is a key development, reducing future legal uncertainty and potential financial exposure.
  • 5The Merrill Lynch merger disclosure issue settlement addresses another legacy matter.
  • 6The company issued a news release on March 26, 2014, detailing these agreements.
  • 7The news release is filed as an exhibit to this 8-K report.

Frequently Asked Questions

The primary significance is the resolution of all residential mortgage-backed securities (RMBS) litigation and other legacy contract claims between Bank of America and the Federal Housing Finance Agency (FHFA), which manages Fannie Mae and Freddie Mac. This effectively removes a major source of ongoing legal uncertainty and potential financial liability for the company.

The provided 8-K filing announces the settlement but does not specify the financial terms or the exact amount paid. The full details would likely be found in the referenced news release (Exhibit 99.1) or subsequent financial reports.

The settlement with the New York Attorney General addresses legacy disclosure matters that arose in connection with the Merrill Lynch merger. This aims to resolve any outstanding disputes related to the transparency and accuracy of disclosures made during that significant acquisition.

The settlements were announced via a news release on March 26, 2014, and this information was filed with the SEC on the same date.