FINANCIAL TIMES: Bank of America is in talks to pay at least $12bn in cash and homeowner relief to end a long-running civil investigation by the Department of Justice alleging that it mis-sold mortgage-backed securities, people familiar with the matter say.
The Charlotte-based bank paid $9.5bn to resolve a similar investigation by the Federal Housing Finance Agency, the US housing regulator, in March.
BofA, which acquired Countrywide Financial and Merrill Lynch during the financial crisis, has already paid over $25bn in fines and settlements since 2009, according to a FT analysis. The settlement would resolve the biggest known legal threat to the bank, which has been wracked by litigation since the financial crisis.
BofA has offered to pay at least $5bn of the $12bn in consumer relief to aid struggling homeowners, potentially by reducing outstanding mortgage debt, as part of the state-federal probe.
Street Journal…
Including the FHFA settlement, BofA’s total penalty would exceed the $13bn deal struck by JPMorgan Chase last autumn to settle similar mortgage sales claims with the DoJ. At the time that was the largest settlement against a bank… (more)
EDITOR: B of A’s purchase of Countrywide with all of its improprieties and toxic mortgages reminds us of the Lancaster County Solid Waste Management Authority’s purchase of the Harrisburg incinerator along with two ‘mountains’ of residue going back a a few decades. Let’s hope the Waste Authority makes out better.
