Banking Law

At least $12 billion sought in DOJ talks with Bank of America to resolve mortgage probes

Bank of America is in talks that could lead to at least $12 billion in payments to settle civil investigations by the U.S. Justice Department and some states into its dealings in mortgage-backed securities that helped fuel the financial crisis of 2008, the Wall Street Journal (sub. req.) reported.

Talks this week at the Justice Department in Washington, D.C., heated up as government negotiators pushed for significant cash up front in any settlement, which eventually could be more than the $13 billion JPMorgan Chase & Co. paid last year to get out from under similar probes, according to unnamed sources familiar with the negotiations.

Bank of America is being asked to pay at least $5 billion to consumers struggling with mortgages and removing blight in struggling neighborhoods. That’s $1 billion more than JPMorgan was required to pay.

Bank of America already has paid out about $60 billion to settle related lawsuits and buy back mortgage securities. It paid $6 billion to settle with the Federal Housing Finance Agency. CEO Brian Moynihan last week mentioned the DOJ talks at an investor conference, saying “Of the big stuff, that’s really the one that’s left out there.”

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