Bank of America to Pay More Than $16 Billion for Mortgage-Backed Security Sales

By Brian Shields

Thu Aug 21st, 2014 6:28am America/Los_Angeles

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WASHINGTON (AP) – The Justice Department has announced a $16.65 billion settlement with Bank of America over its role in the sale of mortgage-backed securities in the run-up to the financial crisis.

The deal announced Thursday calls for the bank, the second-largest in the U.S., to pay a $5 billion cash penalty and provide billions of dollars of relief to struggling homeowners. Bank of America says its cash payouts will total $9.65 billion.

The settlement is by far the largest deal the Justice Department has reached with a bank over the 2008 mortgage meltdown. In the last year, JPMorgan Chase & Co. agreed to a $13 billion settlement while Citigroup reached a separate $7 billion deal.

(Copyright 2014, KRON 4 and the Associated Press, All rights reserved.)

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