Bermuda-based bond insurer Assured Guaranty Ltd saw its shares rocket more than 24 percent on Friday after it secured a $1.1 billion payout from Bank of America to settle a claim over faulty mortgages.The deal ends drawn-out negotiations that started last year over Assured’s claim that loans based on sloppy lending standards were the basis of residential mortgage-backed securities that the Bermuda company insured.Bank of America said on Friday that the agreement includes a cash payment plus loss sharing deal that could bring the total cost to about $1.6 billion.Many of the loans in question, Assured has claimed, were based on false data about homes and borrowers. Many of them were made by Countrywide, a mortgage provider that has been widely accused of loose lending practices, and is now part of Bank of America.News of the deal was announced before the start of stock trading in New York on Friday and Assured jumped $3.43, or 24.2 percent, to $17.60 in New York Stock Exchange trading on Friday and was up as much as 31 percent at one point during the afternoon. Bank of America fell 31 cents, or 2.4 percent, to $12.82.“We are pleased to have reached a settlement with Bank of America that puts this legacy issue behind both of us,” said Dominic Frederico, president and chief executive officer of Assured. “This settlement significantly strengthens our balance sheet, allowing us to more effectively assist municipal issuers.“We hope that this settlement negotiated outside of litigation encourages other R&W [representations and warranties] providers including JPMorgan Chase, Deutsche Bank and Flagstar Bank to accelerate the R&W claims settlement process.”From the viewpoint of both companies, the negotiations were tough. Assured CEO Dominic Frederico compared the talks to Chinese water torture in August last year, while in November Bank of America CEO Brian Moynihan described the discussions as “day-to-day, hand-to-hand combat”.“We have basically resolved virtually all of the controversies between our various companies and Assured,” Bank of America chief financial officer Charles Noski said on Friday in a conference call with investors.US billionaire investor Wilbur Ross is one of the biggest gainers from the share price surge. According to Bloomberg data, his company WL Ross & Co owned more than 16 million shares at the end of last year, amounting to an 8.7 percent stake in the company.Another winner is Ace Ltd, which span off Assured in 2004 and which still owned 5.6 million shares, or a three percent stake in the company, at the end of last year.Assured emerged as the market leader in the insurance of US municipal bonds over the past two years, because it largely steered clear of the mortgage-related business that plunged rivals into severe difficulties during the US housing slump and credit crisis and thus managed to keep its AAA credit rating until last October - longer than competitors including US giants MBIA and Ambac.Other bond insurers got a boost from news of the deal, with MBIA climbing 17 percent.