Bank of America nears record RMBS settlement

According to The Wall Street Journal the much rumored and anticipated Bank of America settlement is near completion. If so, it is by far the largest deal of its kind yet seen.

According to the article:

“Bank of America Corp. and the Justice Department are close to a deal in which the bank will pay between $16 billion and $17 billion to resolve allegations of mortgage-related misconduct in the run-up to the financial crisis, according to people familiar with the matter.”

In November, JPMorgan Chase (JPM) agreed to pay $13 billion to settle claims of mortgage-backed securities fraud brought against the bank by the U.S. government.

The U.S. Department of Justice then used some of that money to speed up its cases against other big banks, likeBank of America (BAC) and Citigroup (C).

Last month, Citi officially announced a $7 billion dollar settlement with the U.S. Department of Justice, several state attorneys general, and the Federal Deposit Insurance Corporation to settle residential mortgage-backed securities and collateralized debt obligations afterindustry whispers that the bank was nearing a resolution.

BofA took a little longer, as the New York Times said the bank was at an impasse in negotiating a multi-billion dollar settlement deal related to the bank’s involvement in the mortgage crisis.

Source: WSJ

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