NEW YORK — Bank of America reached an $11.6 billion settlement with government mortgage agency Fannie Mae to settle claims resulting from mortgage-backed investments that soured during the housing crash, bringing it a step closer to clearing up its legacy of bad home loans.
Under the deal announced Monday, Bank of America will pay $3.6 billion in cash to Fannie Mae and buy back $6.75 billion in loans that the bank and its Countrywide Financial unit sold to the agency from Jan. 1, 2000 through Dec. 31, 2008. That includes about 30,000 loans. The bank is also paying $1.3 billion to the agency for failing to deal with foreclosures fast enough.
For Bank of America, its settlement with Fannie Mae over the mortgage investments represents a ‘‘a significant step’’ in resolving the bank’s remaining mortgage problems, Brian Moynihan, Bank of America chief executive, said in a statement. Moynihan’s predecessor, Ken Lewis, bought Countrywide, a troubled mortgage-lending giant, in July 2008 just as the financial crisis was taking hold.
The settlement represents ‘‘another step closer to normal’’ for Bank of America, Wells Fargo analyst Matt Burnell wrote in a note to clients.
Burnell said the deal was good for the bank because it resolved a dispute with a government agency and will probably reduce the provisions it has to set aside to cover claims from investors over faulty mortgages that were sold with incorrect data on home values or income.
Bank of America’s acquisition of Countrywide was initially praised by lawmakers because the lender was seen as stepping in to support the mortgage industry.
However, instead of boosting Bank of America’s mortgage business, the purchase has drawn a drumbeat of regulatory fines, lawsuits, and losses.