WASHINGTON (8/21/14)--Bank of America has reached a record $17 billion settlement with federal and state authorities, according to an Associated Press report citing officials it says are directly familiar with the matter. The settlement comes from Bank of America's role in selling mortgage-backed securities leading up to the financial crisis in 2008.
The Bank of America settlement was negotiated through a joint federal and state working group with the U.S. Justice Department and other federal and state authorities, according to the Associated Press.
The BofA deal is the largest settlement arising from the economic meltdown in which millions of Americans lost their homes to foreclosure, the article notes. It follows agreements in the last year with Citigroup for $7 billion and with JPMorgan Chase & Co. for $13 billion.
The Associated Press also reports that the deal requires Bank of America to acknowledge making serious misrepresentations about the quality of the residential mortgage-backed securities it issued, along with securities issued by Countrywide Financial and Merrill Lynch, entities which were acquired by the bank in 2008.
According to the report, $10 billion will be paid in cash and another $7 billion in consumer relief will be provided. An official announcement is expected to come later today.
Bank of America settled with the National Credit Union Administration in April 2013 over allegations that the mortgage-backed securities sold by Bank of America led to the failure of several credit unions. The NCUA suit was settled for $165 million.