“Bank of America Corp. agreed to pay MBIA Inc. $1.7 billion to settle a dispute over soured mortgage securities, in the second-largest U.S. bank’s latest bid to reduce legal risks tied to its home-lending business.
“The pact is the fifth settlement the Charlotte, N.C., company has reached this year, totaling $16.9 billion in cash and other relief. News of the agreement sent shares of MBIA, an Armonk, N.Y., bond insurer, up 45%. Bank of America rose 5.2%.
“Clearing the decks legally has been one of Bank of America Chief Executive Brian Moynihan’s top priorities since he took over the lender in 2010, along with revitalizing the company financially.
“Bank of America has paid more than $45 billion during Mr. Moynihan’s tenure to settle disputes with other companies and probes by government officials, with many of the cases centering on the company’s 2008 acquisition of mortgage lender Countrywide Financial Corp. The company’s shares have advanced 66% over the past year amid a rally in bank stocks and its efforts to reduce legal uncertainty.”
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