Bank of America could pay at least $12 billion to settle probes: report

Thu Jun 5, 2014 7:39pm EDT

A Bank of America sign is shown on a building in downtown Los Angeles, California January 15, 2014. REUTERS/Mike Blake

A Bank of America sign is shown on a building in downtown Los Angeles, California January 15, 2014.

Credit: Reuters/Mike Blake

(Reuters) - Bank of America Corp could pay more than $12 billion to settle probes by the Justice Department and a number of states into the bank's alleged handling of shoddy mortgages, the Wall Street Journal said on Thursday, citing people familiar with the negotiations.

At least $5 billion of that amount is expected to go toward consumer relief consisting of help for homeowners in reducing principal amounts and monthly payments, and paying for blight removal in struggling neighborhoods, the paper said, citing people with knowledge about the issue.

A BofA spokesman declined to comment on the issue. The department of justice wasn't immediately available for comment. [link.reuters.com/rap89v]

The second-largest U.S. bank faces multiple government probes over the underwriting, sale and securitization of residential mortgage bonds before the financial crisis.

(Reporting By Sudarshan Varadhan; Editing by David Gregorio)

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Comments (1)
kupdog wrote:
The reason we are where we find ourselves today in America is the collapse of the mortgage business. I have written the closest view you will ever get to the sub prime mortgage business called The Liar and His Loans. My story is not one only of the recovery, but also one of the cause of the economic collapse. I believe I have an insight few other people have, or have written about, until now.

The press is trying to paint a picture that we are in a recovery. I say not. Because of Quantitative Easing, its like we had an alcoholic relative that we bought a liquor store, instead of dealing with he problem years ago when we should have gotten them into AA. Because of the repeal of Glass Stiegel, along with the fact the banks left risk based underwriting standards and went to politically correct standards, the logics of underwriting were thrown out the window. Its like the Federal government let the smart rich kids pick on the rest of the country.

The real reason I wrote The Liar and His Loans was to put a finger on the American pulse during a time when its heart rate sped up, as well as to offer an engaging story that hopefully makes its readers laugh and think in equal measure. In the end I’m trying to show the American workers and strivers who are not seeing a better day, those who are not seeing a way out of this mess we are in, an alternative to the fatal alternative of, well, suicide. At the end of the very long day, we are all in this together.

“A blistering account of the sub prime mortgage business.”
AOL Real Estate

Jun 05, 2014 7:55pm EDT  --  Report as abuse
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