Since the 2008 housing crisis, federal regulators have touted billion-dollar settlements, which, by giving certainty to investors, are often accompanied by a jump in the bank’s stock price.
Financial companies have paid at least $164 billion in more than 100 mortgage-related settlements since 2009, according to an analysis by Keefe, Bruyette & Woods. Below, we examine the eight banks that have paid the most and explain how the largest payments were divided up.
1. Bank of America: $71.23 billion in 24 settlements
The bank has settled mortgage-related cases with a plethora of federal and state regulators as well as investors from the Justice Department and the State Teachers Retirement System of Ohio. A number of these settlements are tied to Bank of America’s purchase of Countrywide Financial and Merrill Lynch.
In 2014, the bank paid the single largest government settlement by a company in American history: $16.65 billion. Some of this is in the form of “soft money,” or help for borrowers. The bank also gets credit for writing down loan balances. And the pain is significantly reduced by tax deductions.
“The real financial cost to the bank could be considerably lower,” said Laurie Goodman, a specialist in housing at the Urban Institute. “This is helping consumers, but it may not be costing the bank.”