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

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Obesity Poses Complex Problem

Professor warns of obesity’s worldwide health impact 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.
Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam Wari
X
Katherine Gypson
May 25, 2015 1:32 AM
For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.
Video

Video Scientists Testing Space Propulsion by Light

Can the sun - the heart of our solar system - power a spacecraft to the edge of our solar system? The answer may come from a just-launched small satellite designed to test the efficiency of solar sail propulsion. Once deployed, its large sail will catch the so-called solar wind and slowly reach what scientists hope to be substantial speed. VOA’s George Putic reports.
Video

Video FIFA Trains Somali Referees

As stability returns to the once lawless nation of Somalia, the world football governing body, FIFA, is helping to rebuild the country’s sport sector by training referees as well as its young footballers. Abdulaziz Billow has more from Mogadishu.
Video

Video With US Child Obesity Rates on the Rise, Program Promotes Health Eating

In its fifth year, FoodCorps puts more than 180 young Americans into 500 schools across the United States, where they focus on teaching students about nutrition, engaging them with hands-on activities, and improving their access to healthy foods whether in the cafeteria or the greater community. Aru Pande has more.
Video

Video Virginia Neighborhood Draws People to Nostalgic Main Street

In the U.S., people used to grow up in small towns with a main street lined by family-owned shops and restaurants. Today, however, many main streets are worn down and empty because shoppers have been lured away by shopping malls. But in the Del Ray neighborhood of Alexandria, Virginia, main street is thriving. VOA’s Deborah Block reports it has a nostalgic feel with its small restaurants and unique stores.

VOA Blogs

World Currencies

EUR
USD
0.9109
JPY
USD
121.50
GBP
USD
0.6467
CAD
USD
1.2293
INR
USD
63.559

Rates may not be current.