News / Economy

Bank of America to Pay $16 Billion to Settle Mortgage Cases

A combination of file photos shows U.S. Attorney General Eric Holder (L) in Washington on May 5, 2014 and Bank of America Chief Executive Brian Moynihan in Hong Kong on March 8, 2013 respectively.
A combination of file photos shows U.S. Attorney General Eric Holder (L) in Washington on May 5, 2014 and Bank of America Chief Executive Brian Moynihan in Hong Kong on March 8, 2013 respectively.
VOA News

U.S. news outlets say Bank of America has agreed to pay over $16 billion to settle the federal government's investigation into its sale of mortgage-backed securities, the investment vehicle largely blamed for the 2008 financial crisis.

The reports say a tentative agreement was reached last week during a phone call between Bank of America chairman Brian Moynihan and U.S. Attorney General Eric Holder. Details of the agreement are still being worked out, but sources say Bank of America will pay $9 billion in cash, with the remaining money being used to help struggling homeowners.

Federal prosecutors have been investigating Bank of America over its acquisitions of Countrywide Bank and investment firm Merrill Lynch, which together held about $965 billion in mortgage-backed securities. The securities included so-called subprime home loans taken out by homeowners who were unable to maintain the payments.

The poor quality of the loans led to huge losses for investors who bought mortgage-backed securities, as well as a wave of foreclosures on delinquent homeowners, which led to the worst economic downturn since the Great Depression of the 1930s.

The settlement by Bank of America is the largest reached with the federal government in connection with the toxic securities. The Justice Department has already reached multi-billion dollar settlements with two other major U.S. banks, JPMorgan Chase and Citigroup.

But consumer advocacy groups have criticized the government for failing to bring criminal charges against these financial firms, or their executives, who sold the faulty mortgages to unsuspecting consumers.

You May Like

Will Cuba Follow the Southeast Asia Model?

Decision to restore ties between US and Cuba has some debating whether it will lead to enhancement or regression of democracy for Communist island nation More

Kenyan Designer Finds Her Niche in Fashion Industry

‘Made in China’ fabrics underlie her success More

Report: CIA, Israel's Mossad Killed Senior Hezbollah Commander

The Washington Post story says Imad Mughniyah was killed instantly by a bomb "triggered remotely" from Tel Aviv by Mossad agents More

This forum has been closed.
Comment Sorting
Comments
     
by: goldenpanther from: Rockville, MD
August 07, 2014 7:54 AM
BOA is still getting off through a very light sentence. Criminal charges would be a more effective way to go. The amount of damage done to the equity in people's homes because of the manipulations by the banking industy probably goes 10 times beyond that. And it will take many more years for the housing industry to recover if it ever does. Realtors will tell you that there is a low inventory of homes for sale but the real truth is there is a far less number of buyers that are willing to try the more restrictive rules. These new rules were generated because the banking industry couldn't control itself. Interest rates are lower than when the housing bubble burst; that should tell you something also.


by: Mike Martin from: Lakewood, co
August 07, 2014 7:32 AM
I lost $120k with my Florida house over this mess. Where do I go to get my cut of this 16 billion?


by: Frank Nelson from: Chicago
August 07, 2014 6:37 AM
If the Executives cannot be punished, then there should be a Corporate DEATH SENTENCE, where a Corporation is fined the entire worth of the Company!


by: William from: Memphis
August 07, 2014 6:21 AM
FINES are passed on to customers, eventually. PRISON IS THE ONLY WAY YOU WILL GET REAL CHANGE IN BEHAVIOR !

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Jefferson's Library Continues to Impress, 200 Years Lateri
X
Deborah Block
January 31, 2015 12:12 AM
Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Jefferson's Library Continues to Impress, 200 Years Later

Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8845
JPY
USD
117.71
GBP
USD
0.6643
CAD
USD
1.2669
INR
USD
62.019

Rates may not be current.