Bank of America in $8.6 bn deal over Countrywide loans

Bank of America has agreed to settle claims brought by state attorneys general regarding certain risky loans originated by Countrywide Financial Corp in a deal that could be worth more than $8.6 billion, the 'Wall Street Journal' said.

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Under the terms of the deal, Bank of America has agreed to, if possible, modify the terms of the loans and will first try to refinance borrowers into government-backed loans under the federal Hope for Homeowners program, which will require a cut in the principal, the Journal said.

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The modification program is valued at as much as $8.4 billion and the costs of the program "have already been estimated and accounted for" by Bank of America as part of its acquisition of Countrywide, the spokesman told the paper.