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Bank of America announced Thursday morning it has agreed to pay a record $16.65 billion to resolve claims related to the sale of toxic mortgage-backed securities during the years leading up the financial crisis. The settlement, which comes after months of reportedly heated negotiations, is the largest civil settlement with a single entity in the history of the United States, eclipsing last year’s record-setting $13 billion dollar agreement between the U.S. Department of Justice and JPMorgan Chase over similar matters.
According to the announcement, Bank of America has agreed to pay a total of $9.65 billion to the Justice Department, various federal regulators, and the states of California, Delaware, Illinois, Kentucky, Maryland, and New York. The remaining $7 billion will come in the form of consumer relief, including mortgage modifications, community stabilization efforts, and enhanced efforts to lend to low- and moderate-income communities. In a statement, Bank of America noted the claims against the bank primarily focused on conduct that occurred at Countrywide and Merrill Lynch before its acquisition of the two companies.
Approximately 421,000 homeowners used various non-foreclosure solutions from mortgage servicers in the second quarter of 2014, according to recently released data from HOPE NOW, a private sector alliance between various players in the mortgage industry. The number of non-foreclosure solutions in the second quarter was almost quadruple the number of foreclosure sales for the same period. Foreclosures experienced a quarter-over-quarter decrease of 9 percent. The foreclosure total for the second quarter was the lowest for any quarter since HOPE NOW began reporting foreclosure data in 2007.
