Bank Of America Agrees To Nearly US$17B Settlement

(AP Photo/Matt Rourke, File)

The government has reached a US$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 US$5 billion cash penalty, another US$4.6 billion in remediation payments and provide about US$7 billion in relief to struggling homeowners.

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 US$13 billion settlement while Citigroup reached a separate US$7 billion deal.