Bank of America to pay $404 million to Freddie Mac to settle mortgage dispute

Bank of America in Times Square, New York.
Adam Jeffery | CNBC

Bank of America said it settled all claims with Freddie Mac arising from residential mortgages sold to the government-backed housing agency through the end of 2009.

BofA will pay $404 million to settle claims related to loans sold to Freddie Mac from January 1, 2000 to December 31, 2009, and to compensate for certain past losses and potential future losses relating to denials, rescissions, and cancellations of mortgage insurance.

The payments are fully covered by the company's reserves, BofA said in a statement on Monday.

(Read more: Quiet boss at Citi is setting tone for Wall Street)

Last month, the U.S. government urged Bank of America to pay $863.6 million in damages after a federal jury found it liable for fraud over defective mortgages sold by its Countrywide unit.

By Reuters