Charlotte, NC, United States (4E) – Bank of America Corp. said it is considering paying at least $12bn to settle civil lawsuits filed against them by the Justice Department and several states into the bank’s alleged handling of shoddy mortgages, according to sources with knowledge of the ongoing talks.
Of the $12bn, at least $5bn will likely be allocated to consumer relief, which will consist of assistance for homeowners aimed to lower their principal amounts, cut monthly payments and pay for blight removal in struggling neighborhoods, the sources said.
U.S. prosecutors have been seeking over $13bn from Bank of America to resolve federal and state probes into its sales of mortgage-backed securities, according to sources interviewed by Bloomberg News in April.
The lender is inching closer to surpass the $13bn that JPMorgan Chase & Co. paid last year to settle government probes and lawsuits related to pre-crisis actions, according to sources.
The North Carolina bank has already agreed to pay a $6bn settlement with the Federal Housing Finance Agency.
If completed, the latest settlement would be another huge penalty for a major financial firm, as the Justice Department aggressively runs after top global banks that helped trigger the financial crisis.