(The following statement was released by the rating agency)

Jan 7 - Standard & Poor's Ratings Services today said its ratings on Bank of

America Corp. (BofA; A-/Negative/A-2) are not affected by the company's

agreement to resolve certain agency mortgage purchase claims the Federal

National Mortgage Association (Fannie Mae) made. The agreement and

other events BofA announced during the quarter are neutral to our ratings

because, although significant amounts of legacy issues are resolved, sizeable

amounts remain. We see BofA as remaining opportunistic in continuing to reduce

legacy mortgage exposures in 2013. This should result in reduced exposures and

earnings volatility in the future, but the costs may be reflected in continued

charges and, therefore, earnings volatility over the next several years or so.

Today's announced agreement covers $300 billion in outstanding loans ($1.4

trillion in original principal balance) and unresolved claims made by Fannie

Mae to BofA for alleged breaches of selling representation and warranties with

respect to $11.2 billion of unpaid principal balances as of Sept 30, 2012.

BofA also agreed to repurchase $6.75 billion of certain residential mortgage

loans it sold to Fannie Mae from 2000-2008.

At the same time, BofA announced definitive agreements to sell about 20% ($306

billion of unpaid principal balances) of its mortgage servicing rights

portfolio.

In addition to the above events, BofA will, in the fourth quarter, take

charges of $2.5 billion (pretax) associated with independent foreclosure

reviews--primarily mortgage-related litigation and other mortgage-related

matters. Partially offseting these charges are $1.3 billion of foreign tax

credit benefits. After all these items, the company anticipates modest

reported net income for the fourth quarter.

Notably, BofA announced the reduction of its estimate for the possible loss

above existing accruals for both government-sponsored entity (GSE) and non-GSE

representation and warranty exposures as of Dec. 31, 2012, to $4 billion from

$6 billion at the end of the previous quarter.

(New York Ratings Team)

(e-mail: pam.niimi@thomsonreuters.com; Reuters Messaging: pam.niimi.reuters.com@reuters.net; Tel:1-646-223-6330;)

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