Bank of America has agreed to pay $600 million to settle several class action lawsuits filed by Countrywide Financial Corp. shareholders over the lender's subprime program, according to a report in The Los Angeles Times.
U.S. District Judge Mariana Pfaelzer in Los Angeles Monday gave preliminary approval for the settlement. Countrywide's outside auditor, KPMG LLP, agreed to pay an additional $24 million as part of the settlement, the newspaper reported.
BofA bought CFC, then the nation's largest lender and servicer, two years ago. The purchase, while bolstering the bank's residential unit, also saddled it with potential legal claims and losses on Countrywide's legacy assets.
Several former Countrywide executives and directors, including former CEO Angelo Mozilo and former president David Sambol, will not have to help fund the payment.
"Countrywide denies all allegations of wrongdoing and any liability under the federal securities laws," Bank of America spokeswoman Shirley Norton said in a statement.
"We agreed to the settlement to avoid the additional expense and uncertainty associated with continued litigation."
