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Bank of America shares climbed 3.5 percent in premarket trading Monday. Investors have been worried that the bank, like other large mortgage lenders, will have to buy back billions of dollars of home loans it sold to investors.

Mortgage bond investors say the home loans should never have been sold to them in the first place because they did not meet investors' underwriting requirements.

Bank of America said it made a $1.28 billion cash payment to Freddie Mac as part of an agreement to end all claims through 2008 related to mortgages sold by Countrywide, a mortgage company bought by the bank in 2008.

The bank paid Fannie Mae $1.34 billion in cash and applied certain credits to reach an agreed $1.52 billion settlement on 12,045 Countrywide loans.

Bank of America said it would put aside $3 billion in the fourth quarter related to the Fannie and Freddie claims and expects to record a goodwill impairment charge of $2 billion in the quarter in its home loans and insurance business unit.

The bank said it believes the settlement has resolved its remaining exposure for home loans sold directly to Fannie and Freddie.

Fannie Mae said in a statement that the agreement with Bank of America addresses about 44 percent of its $7.7 billion in outstanding repurchase requests at the end of September.

The agreement with Bank of America is similar to but much larger than a recent $462 million settlement between Ally Financial Inc and Fannie Mae.

Charlotte, North Carolina-based Bank of America is still working through claims related to mortgages sold to private investors.

The bank started negotiating with a group of mortgage investors last month in an apparent shift in its stance toward such claims. Previously, the bank vowed to fight these investors.

In October, Bank of America Chief Executive Brian Moynihan said the bank would fight back against investors whose attitude was: "I bought a Chevy Vega but I want it to be a Mercedes."

As the largest mortgage servicer in the United States, Bank of America has been at the center of the multi-year foreclosure crisis.

In 2008, it bought Countrywide for $4 billion, a move that has since plagued the bank's balance sheet with billions in problem mortgages.

In October, the bank briefly halted foreclosures amid industrywide allegations that lenders had cut corners on documentation in home repossessions.

The bank has since partially restarted foreclosure proceedings in 23 U.S. states.

(Reporting by Elinor Comlay in New York and Joe Rauch in Charlotte; Editing by Derek Caney and John Wallace)