NEW YORK CITY (dpa-AFX) - American International Group Inc. (AIG) announced Wednesday that it has reached a global resolution of its residential mortgage related disputes with Bank of America (BAC).
AIG noted that the resolution includes its claims pending in New York and California federal courts related to the creation, offering, and sale of RMBS from which AIG and its subsidiaries suffered losses either directly on their own account or in connection with their participation in AIG's securities lending program.
The resolution also covers AIG's objections to the $8.5 billion settlement of Countrywide's mortgage repurchase obligations to various investors, as well as disputes concerning the issuance of mortgage guaranty insurance by AIG's United Guaranty subsidiaries to Bank of America and Countrywide.
As per the terms of the settlement, AIG will receive $650 million in cash plus its pro rata share of whatever amount is ultimately paid out to investors in connection with the Countrywide repurchase settlement.
In addition, the companies have agreed, subject to the approval of Fannie Mae, Freddie Mac and certain other mortgage holders, to resolve the outstanding mortgage guaranty claims disputes in accordance with agreed-to claims processes and payment formulae.
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