AP source: BofA nears $16-$17B settlement with US
the associated press | August 07,2014
WASHINGTON — Bank of America is nearing a $16 billion to $17 billion settlement to resolve an investigation into its role in the sale of mortgage-backed securities before the 2008 financial crisis, a person directly familiar with the matter said Wednesday.
The deal with the bank would be the largest Justice Department settlement by far arising from the economic meltdown in which millions of Americans lost their homes to foreclosure. It would follow earlier multibillion-dollar agreements reached in the last year with Citigroup and JPMorgan Chase & Co.
The person, who spoke on condition of anonymity because the deal had not yet been announced, cautioned that some details still needed to be worked out and that it was possible the agreement could fall apart.
But the person said the two sides reached an agreement in principle following a conversation last week between Attorney General Eric Holder and Bank of America CEO Brian Moynihan.
The person said the tentative deal calls for the bank to pay roughly $9 billion in cash and for the remaining sum to go toward consumer relief.
A bank spokesman declined to comment.
The Wall Street Journal first reported details of the settlement on Wednesday.
The Justice Department last year reached a $13 billion settlement with JPMorgan, and last month announced a $7 billion settlement with Citigroup.
Each of these deals are designed to offer some financial relief to homeowners, yet the cash totals from some of America’s largest banks are not nearly enough to reverse the damages caused by the bursting of the housing bubble and the ensuing recession that began in late 2007.
Millions of Americans lost their homes in foreclosures and found themselves jobless in the worst downturn since the 1930s.