Bank of America (BofA) and Fannie Mae may be burying their hatchet. The two parties agreed to a series of settlements totaling nearly $12 billion. The agreement is expected to help BofA move past its 2008 purchase of Countrywide Financial Corp., which resulted in epic financial disaster for BofA and the financial industry as a whole.

These settlements mean BofA’s fourth quarter 2012 profits, which it will announce next week, will be markedly smaller than expected.

According to the agreement, BofA will:

  • Pay Fannie Mae $3.6 billion
  • Buy back $6.75 billion of bad loans from Fannie Mae to clear claims the mortgage company made against BofA
  • Pay Fannie $1.3 billion over foreclosure delays

Read more about these settlements on Thomson Reuter.

Read more InsideCounsel stories about the financial crisis:

U.S. government files $1 billion suit against Bank of America

Barney Frank defends JPMorgan against government lawsuit

Homeowners accuse 12 banks of manipulating Libor

Bank of America pays $2.43 billion in shareholder suit settlement

Lehman Brothers to pay another $10.5 billion to creditors

Citigroup will pay $590 million in settlement related to financial crisis