Bank of America may be ready to end its mortgage nightmare

June 6, 2014
June 6, 2014

Bank of America may be close to putting a long litany of mortgage fines in its rearview mirror. But it’s gonna cost chief executive Brian Moynihan.

The Wall Street Journal reports that the second-largest US bank could pay at least $12 billion to the US Justice Department to settle a civil probe into the way the bank handled shoddy mortgages. Bank of America already reached a $6 billion settlement with the Federal Housing Finance Agency over similar issues. Combined, Bank of America’s possible $18 billion in fines would eclipse a $13 billion mortgage settlement JPMorgan Chase reached earlier this year.

For a bit of perspective, the Journal reports that “a significant portion” of Bank of America’s problematic mortgage securities were originally created by Countrywide Financial, the troubled US mortgage lender that BofA scooped up in 2008 for $2.5 billion. That deal proved to be one of the worst acquisitions in history.

 

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