Bank of America Agrees to $17B Mortgage Settlement: Report

AUG 20, 2014 3:59pm ET
Comment (1)

Bank of America has agreed to pay $17 billion to settle federal investigators' allegations that it sold shoddy mortgage-backed securities ahead of the financial crisis, according to a media report.

Bank of America will pay $10 billion in cash and $7 billion in consumer relief as part of the settlement agreement, the Associated Press reported, citing unidentified sources. The settlement agreement between B of A and the Justice Department is expected to be announced as early as Thursday.

B of A spokesman Lawrence Grayson declined to comment on the report.

The Charlotte, N.C., company will be required to acknowledge making misrepresentations about the quality of its mortgage-backed securities, AP said.

The settlement has long been rumored as forthcoming, with recent estimates for Bank of America's settlement price varying from $16 billion to $17 billion.

Citigroup last month agreed to pay $7 billion to settle a Justice Department investigation into its sales of mortgage-backed securities. JPMorgan Chase agreed in November to pay $13 billion to settle state and federal probes of its sale of mortgage securities; at the time it was the largest settlement involving a financial firm and the federal government.

Bank of America has already been forced to pay billions to settle other investigations, including a probe into the so-called Hustle program at its Countrywide mortgage unit.

Comments (1)
bout time this was settled.i hope now they do what they say they will do. help people.....stop looking at the bottom line....
steven ruza, attorney
Posted by steven r | Thursday, August 21 2014 at 8:08AM ET
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