DOJ Set For $17 Billion Bank Of America Settlement Over Mortgage Bonds


Bank of America's nearly $17 billion settlement with the U.S. Department of Justice over soured mortgage bonds is expected to be announced today, reports the Charlotte Observer. Of the total, $9.65 billion is expected to be in a penalty payment to the U.S. government and cash payments to federal agencies and various states. The rest, about $7 billion, would be in consumer relief, which could include modifications and principal reductions for home loans.

The settlement would be the largest ever between the government and a company. It would eclipse a $13 billion settlement, announced in November, between JPMorgan Chase & Co. and the Justice Department to resolve similar probes. It would also be more than Bank of America's profits in each of the past three years. Bank of America becomes the latest major U.S. lender to settle U.S. government investigations into alleged mortgage misconduct blamed for fueling the worst U.S. economic crisis since the Great Depression. The settlement would boost Bank of America's already-high tally for legal costs stemming from the crisis. The second-largest U.S. bank by assets has spent more than $60 billion over financial crisis-era legal issues more than any other lender has paid to resolve similar matters.

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