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Bank of America to make $17 bn mortgage settlement

DPA New York | Updated on August 21, 2014 Published on August 21, 2014

Bank of America settled a separate case early this year with the Federal Housing Finance Agency for $9.5 billion.

Bank of America Corp has reached a nearly $17-billion settlement of federal, state and civil allegations over troubled mortgage bonds, according to US media reports on Wednesday.

The agreement could be announced Thursday, Bloomberg News reported, citing two people with knowledge of the settlement who spoke on condition of anonymity.

Bank of America settled a separate case early this year with the Federal Housing Finance Agency for $9.5 billion.

The settlement would be the largest arising from the mortgage industry’s deceptive or abusive practices leading up to the 2008 financial crisis. The practices brought the US finance system to the brink of instability and provoked a global recession.

In the last year, Citigroup Inc has reached a $7-billion settlement, and JPMorgan Chase & Co agreed to pay $13 billion in similar cases.

Bank of America’s penalties are the largest after it acquired subprime lender Countrywide Financial Corp in the early stages of the crisis that engulfed the banking industry when mortgage bonds started to default.

Published on August 21, 2014
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