FINANCIAL TIMES: Bank of America has reached an agreement in principle to pay more than $16bn in cash and consumer relief to US authorities to resolve allegations of misselling mortgage-backed securities, people familiar with the matter said.
BofA, which has already paid $9.5bn to resolve a similar lawsuit by the Federal Housing Finance Agency, last week was ordered by a US judge to pay $1.3bn more to US authorities.
The judgment followed a trial which found BofA’s Countrywide unit liable of defrauding Fannie Mae and Freddie Mac, the government-backed mortgage groups, by fast-tracking mortgages through a programme called “Hustle” without checking the borrowers’ ability to repay the debt. The adverse judgment hastened BofA’s decision to strike a deal rather than face the prospect of an unknown penalty following a trial, one person familiar with the matter said… (more)
