Bank of America (NYSE: BAC) could pay more than $12 billion in fines to settle its alleged handling of mortgages believed to have contributed to the financial crisis, The Wall Street Journal reports.
Bank of America is in talks with the Justice Department to settle the allegations, and once completed the final amount the bank is ordered to pay could exceed the $13 billion that JPMorgan Chase (JPM) was ordered to pay last year to settle similar allegations. At least $5 billion of the amount that BAC is ordered to pay would go toward consumer relief, The Wall Street Journal reports, adding that those familiar with the negotiations say BAC could pay up to $18 billion.
“As the negotiations with the government heat up, the bank is being pressed to pay billions more than the $12 billion it is offering,” The Wall Street Journal reports.
The JP Morgan settlement is the largest settlement for a single company relating to the housing and economic crisis to date.
A jury decision in October of last year found BAC liable for defective mortgages originated and sold by Countrywide Financial, which it acquired in 2008, that contributed to the economic crisis.
Written by Cassandra Dowell