Bank Of America Settlement: $16.65B Resolution Of Bad Mortgages Add To Long Line Of Pricey Payouts

 

Bank of America Corp. (NYSE:BAC) made history on Thursday by agreeing to a record $16.65 billion settlement with the U.S. Securities and Exchange Commission (SEC) following claims that the corporation improperly sold mortgages that contributed to 2008 U.S. financial crisis. The resolution represents the largest ever single-company settlement in the U.S., but this isn’t the first time Bank of America has paid a large monetary settlement. 

2014 - The Justice Department/SEC ($16.65 billion)

Bank of America agreed to pay almost $17 billion in response to claims filed by the Justice Department, the SEC and several other federal agencies regarding the bank's sale of subprime mortgages, the Justice Department confirmed Thursday. BOA will pay $9.65 billion in fines and $7 billion to homeowners and communities affected by the bank’s sale of “toxic” mortgage securities, the Los Angeles Times reports. 

“This is appropriate given the size and scope of the wrongdoing at issue,” Attorney General Eric Holder said of the settlement’s size. 

2014 - Fannie Mae/Freddie Mac ($9.5 billion)

Bank of America's settlement with the SEC Thursday comes just five months after the corporation’s $9.5 billion payout to the Federal Housing Finance Agency (FHFA), a conservator for Fannie Mae and Freddie Mac. In March, BOA announced it was settling all litigation with the mortgage purchasing companies through the FHFA in regard to “false represented” mortgage securities and other contract claims. 

2013 - Federal government/homeowners ($25 billion)

Bank of America was just one of several major U.S. banks that agreed to pay the U.S. federal government $25 billion in February 2012 following accusations of corrupt mortgage practices. The penalty, which was used to help affected homeowners, released BOA, Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc. and Ally Financial Inc. from claims regarding allegedly mismanagement of loan modifications and foreclosures.

2011 - Various mortgage bond holders ($8.5 billion)

Bank of America's sale of subprime mortgages to investors resulted in the corporation’s pending $8.5 billion payout to several mortgage bond holders including BlackRock, Pimco and the New York Federal Reserve. The Wall Street Journal reported Thursday that the 2011 settlement is still awaiting a judge’s approval. 

 

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