NEW YORK — Bank of America has agreed to settle a class-action lawsuit brought by investors who bought mortgage investments from Countrywide Financial, the California-based lender it acquired in 2008. The announcement came as the nation's second biggest bank reported higher net income for the first quarter but missed analysts' expectations.
Bank of America said Wednesday that it would pay $500 million to settle the lawsuit brought by the Maine State Retirement System and other pension funds who said Countrywide had misled them about the quality of the mortgages they bundled together and sold to investors before the crisis.
The settlement is the latest reminder of the long fallout of Bank of America's decision to buy Countrywide, which was known for making exotic loans. The purchase catapulted the bank into a spot at the top of the nation's mortgage scene, but it's been an albatross ever since, bringing lawsuits, regulatory investigations and quarterly losses.