Bank of America reached a settlement with Fannie Mae concerning mortgages originated by Countrywide: (via CNNMoney)

Bank of America has reached a $10.3 billion settlement with Fannie Mae to deal with questionable home loans it sold to the government-backed mortgage financer during the housing bubble.

BofA (BAC, Fortune 500) will pay $3.55 billion in cash to Fannie as part of the deal. It will also repurchase 30,000 questionable mortgages that are likely to produce losses, paying Fannie $6.75 billion for the loans. The loans had been bundled into mortgage-backed securities, and then were bought and guaranteed by Fannie Mae.

This would seem to be good news for MBIA (MBI) which we own in our Global Opportunities portfolio. MBI has sued BAC over mortgages originated by Countrywide and insured by MBIA which resulted in large losses to MBIA. Bank of America has used every stalling tactic in the book to delay a settlement but eventually we believe they will have to pay MBIA (via the Street):

MBIA is suing Bank of America over mortgages placed into bonds it sold by Countrywide in the years leading up to the subprime mortgage crisis. MBIA insured the bonds, but wants Bank of America to assume liability for them because MBIA claims they contain false representations.