REPORT: Bank Of America Offers To Shell Out $US13 Billion To Resolve Mortgage Probe

Bank of America is reported to be offering $US13 billion to settle a U.S. mortgage securities probe stemming from mortgage backed bonds it sold to investors that in part led to the financial crisis, report Devlin Barrett and Christina Rexrode at the WSJ.

Bank of America met with the Justice Department on Tuesday but could not arrive at a deal as the latter wants billions more.

The bank announced Q2 earnings earlier on Wednesday and said it had resolved a lawsuit with AIG over mortgage securities sold during the financial crisis.

“The AIG settlement amount of $US650 million was covered by litigation reserves as of June 30, 2014,” according to the press release. Bank of America has now resolved approximately 95 per cent of the unpaid principal balance of all RMBS as to which RMBS securities litigation has been filed or threatened for all Bank of America-related entities”

Since the financial crisis Bank of America has spent over $60 billion in legal fees, buybacks, and settlements settlements to resolve issues tied to mortgage securities.

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