BoA said to be negotiating $12bn settlement over home loans
Bank of America Corp (BoA) is reportedly pursuing negotiations with government authorities to settle ongoing probes over the lender's alleged handling of shoddy mortgages that led to the 2008 financial crisis.
Citing anonymous sources, the Wall Street Journal reported that Bank of America Corp could pay more than $12 billion to settle the probes being conducted by the U. S. Justice Department and several states of the U. S.
The second-largest lender of the U. S. in under scrutiny by multiple government agencies over the underwriting, sale and securitization of home mortgage bonds before the economic crisis.
The report added that around $5 billion of that amount would likely go toward consumer relief consisting of assistance for homeowners in decreasing their principal amounts and monthly payments. A fraction of the amount will also be used to pay for blight removal in struggling neighborhoods.
If combined with the amount of $6 billion that Bank of America has already agreed to pay to the Federal Housing Finance Agency to settle a probe over toxic mortgages, the reported hefty payout would surpass the record $13 billion that JPMorgan Chase paid in 2013 to settle similar charges.
However, the paper cited another person familiar with the matter saying that the negotiations are still in an early phase.
Neither Bank of America nor the Department of Justice has so far issued a comment on the recently published report.
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