NEW YORK (TheStreet) --Bank of America  (BAC - Get Report) reached an agreement to settle litigation with Fannie Mae  (FNMA) and Freddie Mac  (FMCC) over problem mortgage backed securities (MBS).

The bank will pay $4.4 billion in cash to Fannie Mae and repurchase MBS from Fannie with an unpaid principal balance of approximately $1.9 billion. It will pay Freddie Mac $4.95 billion and repurchase $3.1 billion in MBS.

--Written by Dan Freed in New York

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