BANK OF AMERICA ANNOUNCED Thursday morning it has agreed to pay a record $16.65 billion to resolve claims related to the sale of toxic mortgage-backed securities during the years leading up the financial crisis. The settlement, which comes after months of reportedly heated negotiations, is the largest civil settlement with a single entity in the history of the United States, eclipsing last year’s record-setting $13 billion agreement between the U.S. Department of Justice and JPMorgan Chase. That settlement was over similar matters. According to the announcement, Bank of America has agreed to pay a total of $9.65 billion in cash to the Justice Department, various federal regulators, and the states of California, Delaware, Illinois, Kentucky, Maryland, and New York. The remaining $7.0 billion will come in the form of consumer relief, including mortgage modifications, community stabilization efforts, and enhanced efforts to lend to low- and moderate-income communities. The agreement releases the megabank from a number of current and potential claims over its securitization of bad mortgages, including allegations that it was aware the loan underlying the securities were bad and that it knowingly misrepresented those mortgages when they were sold. It also releases the bank from certain claims related to violations of underwriting guidelines in its production of loans insured by the Federal Housing Administration (FHA). In a statement, Bank of America noted the claims against the bank primarily focused on conduct that occurred at Countrywide and Merrill Lynch before its acquisition of the two companies. The statement adds that the settlement is expected to cut BofAs third-quarter pretax earnings by $5.3 billion. (DS NEWS)
Posted on: Mon, 25 Aug 2014 17:13:27 +0000
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