{"id":5668,"date":"2014-08-23T00:00:00","date_gmt":"2014-08-23T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2014\/08\/bank_of_america_to_pay_1665_bi"},"modified":"2022-05-06T11:49:27","modified_gmt":"2022-05-06T16:49:27","slug":"bank-of-america-to-pay-1665-bi","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/bank-of-america-to-pay-1665-bi\/","title":{"rendered":"Bank of America to Pay $16.65 Billion to Settle DOJ Mortgage Probe"},"content":{"rendered":"\n

Bank of America (BAC) <\/a>and the U.S. Department of Justice have arrived at a $16.65 billion mortgage settlement. Under the agreement, the lender will pay $9.65 billion to the DOJ, the SEC, other government agencies, and six states. The remaining $7 billion will be paid in the form of aid to struggling consumers. This is the largest settlement between the U.S. and just one company. It resolves claims not just against Bank of America, but also against its current and past subsidiaries, including Merrill Lynch and Countrywide Financial Corporation.<\/p>\n

The numerous probes now resolved involve the packaging, sale, marketing, structuring, and issuance of collateralized debt obligations and residential mortgage-backed securities<\/a>, as well as mortgage loan origination and underwriting practices. As part of the settlement, the bank issued a statement of facts acknowledging that it did not disclose key information to investors about the quality of billions of dollars of RMBS that it sold to them. When the securities failed, investors, including financial institutions that were federally insured, lost billions of dollars. Bank of America acknowledges that it originated mortgage loans that were high-risk and made misrepresentations about the loans to the Federal Housing Administration, Freddie Mac, and Fannie Mae. <\/p>\n

Merrill Lynch and Countrywide made a lot of the loans at issue before Bank of America purchased both entities in 2008. However, the government also had a problem with Bank of America\u2019s own mortgage securities, as well as the latter’s attempts to circumvent internal underwriting standards by revising the financial data of applicants.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

Bank of America (BAC) and the U.S. Department of Justice have arrived at a $16.65 billion mortgage settlement. Under the agreement, the lender will pay $9.65 billion to the DOJ, the SEC, other government agencies, and six states. The remaining $7 billion will be paid in the form of aid to struggling consumers. 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