Bank of America settles mortgage probes for $16.65 billion
Bank of America Corp has reached a $16.65 billion settlement with US regulators to settle charges that it misled investors into buying troubled mortgage-backed securities.
The settlement announced today by the US Department of Justice calls for the second-largest US bank to pay a $9.65 billion cash penalty, and provide about $7 billion of relief to struggling borrowers.
It is expected to resolve the vast majority of the Charlotte, North Carolina-based bank's remaining liabilities tied to its purchases of Countrywide Financial Corp, once the nation's largest mortgage lender and Merrill Lynch & Co.
Bank of America said the accord is expected to reduce third-quarter earnings by about $5.3 billion before taxes, or about 43 cents per share after taxes.