BofA in $16.5 billion deal with U.S. over mortgage bonds: source

WASHINGTON Wed Aug 20, 2014 3:45pm EDT

A Bank of America sign is pictured in Encinitas, California January 14, 2014.  REUTERS/Mike Blake

A Bank of America sign is pictured in Encinitas, California January 14, 2014.

Credit: Reuters/Mike Blake

WASHINGTON (Reuters) - Bank of America Corp is expected to pay more than $16.5 billion to end investigations into mortgage securities that the bank and its units sold in the run-up to the financial crisis, in a deal that could be announced as early as Thursday, a person familiar with the matter said.

The bank has been hammering out the final details of the record-breaking accord with the U.S. Department of Justice and is expected to pay around $9 billion in cash and the rest in assistance to struggling homeowners.

A $16.5 billion payout would be the largest in a series of soaring penalties against banks for a range of misconduct, including violating U.S. sanctions and inappropriately marketing mortgage securities.

An agreement in principle was reached earlier this month after a phone call between the bank's chief executive, Brian Moynihan, and Attorney General Eric Holder.

The negotiations have been driven by an investigation into securities sold by Merrill Lynch, which the bank agreed to acquire in 2008 at the height of the financial crisis, people familiar with the matter have said.

Representatives of the Justice Department and Bank of America declined comment.

(Reporting by Aruna Viswanatha, additional reporting by Peter Rudegeair; Editing by Karey Van Hall and Steve Orlofsky)

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Comments (11)
timebandit wrote:
Ah, Bank of America.
If there ever was – and still is – a financial corporate conglomerate that ought’ve been taken down and broken into pieces to protect the public after 2008, it’s BoA.

Aug 20, 2014 3:51pm EDT  --  Report as abuse
Stivg wrote:
and yet, NOBODY goes to jail. The scandal against justice for the biggest swindle in history goes on…and on…and on.

Aug 20, 2014 4:10pm EDT  --  Report as abuse
Stivg it’s more like they got a big fat get out of jail free card

Aug 20, 2014 4:22pm EDT  --  Report as abuse
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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