CalPERS gets $249 million settlement from Bank of America
Sacramento Bee -- CalPERS said Nov. 3 it has received a $249.3 million payment from Bank of America, the result of a settlement over toxic mortgage securities purchased by the pension fund during the housing bubble.
With the Bank of America settlement, the California Public Employees’ Retirement System said it has now recovered more than $500 million from its investments in bad mortgage securities.
“This is money that rightfully belongs to our members for their long-term retirement security,” said CalPERS Chief Executive Anne Stausboll in a prepared statement. “We’re glad that those who misled investors about the risks of mortgage-backed securities continue to compensate our members for their losses.”
In mid-September, CalPERS collected $88 million from Citigroup Inc. over similar investments.
The payout from Bank of America is in line with CalPERS’ earlier estimate of its share of a $16.6 billion settlement the bank made with federal authorities in August.
Besides the CalPERS sum, the settlement called for $50 million for CalSTRS, the teachers’ pension fund, and $500 million for homeowners with troubled mortgages by way of principal forgiveness and other forms of relief.
Bank of America borrowers are urged to call the bank’s settlement hotline at (877) 488-7814.