The government has reached a $16.65 billion settlement with Bank of America over its role in the sale of mortgage-backed securities in the run-up to the financial crisis, the Justice Department announced Thursday.
The deal calls for the bank, the second-largest in the U.S., to pay a $5 billion cash penalty and provide billions of dollars of relief to struggling homeowners. Bank of America said its cash payouts will total $9.65 billion.
The settlement is by far the largest deal the Justice Department has reached with a bank over the 2008 mortgage meltdown. In the last year, JPMorgan Chase & Co. agreed to a $13 billion settlement while Citigroup reached a separate $7 billion deal.
Maryland Attorney General Doug Gansler announced today that multiple governmental entities and pension programs (Maryland and local governments) will share an estimated $75 million settlement secured by his Securities Division.