Bank of America will pay $8.5 billion to settle claims regarding mortgage-backed securities (MBS) sold by Countrywide Financial, The Telegraph reports. PIMCO, BlackRock and the Federal Reserve Bank had demanded refunds on the mortgage loans that were packaged as bonds.

The bank will also set aside $5.5 billion for future claims and $6.5 billion to cover further mortgage write-downs and legal costs. The settlement will result in a $9.1 billion second-quarter loss for the bank.

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