WASHINGTON (Reuters) – Bank of America Corp has agreement reached 16,650 million with state regulators to resolve allegations that it deceived investors to buy mortgage-backed assets.
The settlement announced Thursday by the Department of Justice calls the second largest American bank paque a fine of 9.650 million and provide 7,000 million in aid to homeowners and communities struggling.
It is expected that the vast majority of the other responsibilities of the bank is resolved based in Charlotte, North Carolina, linked to purchases of Countrywide Financial Corp, at the time the largest American Mortgage Group, and Merrill Lynch & amp; . Co.
“It’s a historic resolution, the largest settlement of its kind ever recorded – that goes beyond the ‘cost of doing business’,” said United States Attorney General Eric Holder in a statement.
Bank of America said it expects the deal to reduce its third-quarter earnings at about 5,300 million before tax, or about 43 cents per share after taxes.
The bank CEO Brian Moynihan has been more than four years trying to escape the obligations of Bank of America arising from the acquisitions of Countrywide and Merrill, which were made by his predecessor Kenneth Lewis. In a statement, Moynihan said the agreement is in the best interests of its shareholders.
Shares of Bank of America rose 1.5 percent to $ 15.75 Wall Street. Details of the agreement are met earlier this month and the formal announcement of it may mean that most of the bank’s problems with mortgages are over.
Bank of America admitted selling billions of dollars in risky securities backed by mortgages, hiding key facts about loan quality.
In addition, admitted to submitting a distorted way the quality of the loans they sold Fannie Mae and Freddie Mac, the two mortgage companies controlled by the government.
The settlement resolves pending and future with the Department of Justice cases, the stock supervisor Securities and Exchange Commission, the Federal Deposit Insurance Corp and several states.
however, does not provide for a fine of 1.270 million imposed last month by a federal judge for Countrywide mortgage program known as “High Speed Swim Lane” (in English, swimming high street speed) or “Hustle” (English word for “scam”), Bank of America has appealed.
The agreement does not cover any criminal cases against individuals.
Including this latest agreement, Bank of America will have paid well over 65,000 million mortgage to close cases with consumers, investors and government agencies related to the purchase of Countrywide in July 2008 and Merrill six months later.
according to 16.650 billion dwarfs the respective agreements 13.000 million and 7.000 million that JPMorgan Chase & amp; Co and Citigroup Inc recently reached similar cases to close.
(Reporting by Aruna Viswanatha in Washington and Jonathan Stempel in New York, Translation Jose Elias Rodriguez)
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