In the largest fine ever levied by the US government against a single company, Bank of America has agreed to pay $16.65 bn regarding the sale of flawed mortgage products. Of this amount, $9.65bn will go to the justice department, six US states and other government agencies and a further $7bn will go to consumers struggling with home loan payments and the demolition of derelict properties. A series of similar fines have in the past been awarded to Citigroup, who paid $7 bn and JP Morgan Chase who paid a then record of $13 bn regarding mortgage products.1
‘The bank admitted it misled investors about the quality of mortgage loan sale prior to the housing crash, when banks lent out too much money to homeowners who eventually could not pay off their loans’. Bank of America acquired Merrill Lynch in 2009, Merrill Lynch was responsible for the sale of more than $965bn in bad loans between 2004 and 2008.2 Although the $16.6 bn fine covers mortgage bonds sold by Merrill Lynch, Countrywide and Bank of America – now all part of the Bank of America Group.
- The Guardian. 21.08.2014. Bank of America reaches record $17bn settlement over questionable mortgages. http://www.theguardian.com/business/2014/aug/21/bank-of-america-record-settlement-mortgages [↩]
- RT.20/08/2014. Bank of America Agrees to record $17bn settlement over mortgage fraud http://rt.com/business/181724-bank-of-america-17-billion/ [↩]