Hedge fund manager John Paulson, a long-term investor in Bank of America , on Thursday said he welcomed the settlement reached between the lender and mortgage bond investors.

While we don't comment on positions between public quarterly filings, we believe it is positive that Bank of America is seeking to put legacy mortgage issues behind it so that investors can focus on the power of future earnings, Paulson said through a spokesman one day after the bank inked the $8.5 billion settlement.

At the end of the third quarter, Paulson & Co, which oversees roughly $36 billion in investor assets spread across several portfolios, owned 1.22 percent of the Charlotte, North Carolina-based lender.

Paulson made his statement after cable television network CNBC reported that his firm, which ranks as the world's fourth-largest hedge fund, unloaded a substantial portion of its Bank of America shares.

While some selling may be occurring since Paulson is one of the bank's biggest investors, people familiar with his portfolio say that any suggestions of wholesale dumping may be exaggerated.

At the end of the first quarter, Paulson owned 123.6 million shares of Bank of America, down slightly from the amount he owned at the end of the fourth quarter, quarterly filings show.

Paulson is generally known as a patient investor, and people familiar with his strategy said that he has not fundamentally changed his view that the U.S. economy will recover and lenders will perform better.

Financials make up a big part of Paulson's portfolios, with Citigroup and Bank of America ranking in his top six holdings at the end of the first quarter.

But some selling, especially after the bank shares rose, would be expected since financial stocks had weighed on his flagship Paulson Advantage portfolio, which lost 15.5 percent from January through the middle of June.

(Reporting by Svea Herbst-Bayliss. Editing by Robert MacMillan)