(Bloomberg) — American International Group Inc., the largestcommercial insurer in the U.S. and Canada, said it will get atleast $650 million as part of a settlement with Bank of AmericaCorp. tied to faulty mortgages.

The deal covers home loans on which the company took losses andalso entitles the insurer to a share of what Bank of America paysto investors as part of a Countrywide repurchase settlement, NewYork-based AIG said today in a statement. The accord couldn'timmediately be verified in court records.

Bank of America, based in Charlotte, North Carolina, has pushedto resolve liabilities tied to faulty mortgages that have cost itat least $50 billion since the financial crisis, most inheritedfrom its 2008 purchase of Countrywide Financial Corp. The bank woncourt approval in January of an $8.5 billion settlement endingclaims by investors in more than 500 mortgage- securitizationtrusts.

AIG and other objectors asked the court to reject the deal,which it said resolved claims for pennies on the dollar whileinvestor losses totaled more than $100 billion.

AIG Bailout

The insurer took housing-related losses on bonds that itpurchased for its investment portfolio and loans that it backedthrough its derivatives unit and mortgage-guaranty subsidiary. AIGreceived a bailout in 2008 that swelled to $182.3 billion after thecompany was overwhelmed by losses tied to subprime loans. Theinsurer repaid U.S. taxpayers in late 2012.

AIG sued Bank of America and Countrywide for $10 billion indamages in 2011, claiming it was misled into thinking the bank'sresidential mortgage-backed securities were issued according tounderwriting guidelines that the bank had long abandoned.

Countrywide Financial, based in Calabasas, California, was thebiggest U.S. residential home lender before the collapse of thehousing market, originating or purchasing about $1.4 trillion inmortgages from 2005 to 2007. The bulk of them were sold toinvestors as mortgage-backed securities.

The case is American International Group Inc. v. Bank of AmericaCorp. 11-cv-10549. U.S. District Court Central District ofCalifornia (Los Angeles).

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