Bank of America Agrees to Pay over $9.6 Billion to Settle Claims relating to the Housing Crisis
Bank of America will be paying the federal government, California, Delaware, Illinois, Maryland, New York and Kentucky a total of $9,650,000,000.00 to resolve claims arising out of the packaging, origination, marketing, sale, structuring, arrangement and issuance of residential mortgage-backed securities and collateralized debt obligations by Bank of America, Countrywide, Merrill Lynch and Franklin Financial Corporation. Included within this settlement are three suits brought by individuals under the False Claims Act. These lawsuits were based upon the alleged sale of defective residential mortgage loans to Fannie Mae and/or Freddie Mac. $1 billion of the settlement will be used to resolve these suits. The individuals who made these allegations have not been identified but will receive a portion of the money which is being paid. Over $5 billion will go to the United States Treasury as a civil monetary penalty. The remaining amount will go to the federal and state governments. Bank of America will also be providing $7,000,000,000.00 of consumer relief intended to address the harm that its alleged conduct caused.
The settlement addresses conduct that took place prior to January 1, 2009. This agreement does not prevent criminal charges from being brought in the future or lawsuits from being filed against any individual who is alleged to have engaged in wrongful conduct.