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December 22, 2014

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Bank of America reaches $17B settlement with US

Image

Matt Rourke / AP

This Tuesday, Jan. 14, 2014, file photo shows a Bank of America sign in Philadelphia.

WASHINGTON — Officials familiar with the deal say Bank of America has reached a record $17 billion settlement with federal and state authorities over its role in the sale of mortgage-backed securities in the run-up to the 2008 financial crisis.

The officials say the bank will pay $10 billion in cash and provide consumer relief valued at $7 billion.

They spoke to The Associated Press on condition of anonymity because the deal isn't scheduled to be announced until Thursday at the earliest.

The bank declined comment.

The agreement requires the bank to acknowledge making misrepresentations about the quality of its residential mortgage-backed securities itself and in those by Countrywide Financial and Merrill Lynch. Those institutions were acquired by the bank in 2008 and were responsible for the bulk of the questionable loans.

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