Bank of America is nearing a potential record-setting $17 billion settlement with the Justice Department over shoddy mortgage practices.
The final agreement is expected to run between $16 billion and $17 billion over the bank’s mortgage-related misconduct leading up to the 2008 financial crisis, The Wall Street Journal first reported on Wednesday.
{mosads}The bank is expected to pay about $9 billion in cash to the Justice Department and various other government groups, with the remaining funds going to consumers for mortgage relief and other help.
If an agreement is inked it would set a record for penalties and damages in a civil settlement between the government and a business.
In November, J.P. Morgan Chase paid $13 billion over similar issues, and last month, Citigroup agreed to a $7 billion deal over its sale of bad mortgage-backed securities before the financial crisis hit nearly six years ago.
Up until now, the bank had balked at paying the $17 billion sought by Justice. But Attorney General Eric Holder apparently told CEO Brian Moynihan that if he didn’t move his settlement offer closer to the government’s figure, Justice was prepared to immediately file a lawsuit, according to the WSJ.