Bank of America has reached a record $17 billion settlement with the government over sales of shoddy mortgage-backed securities during the run-up to the financial meltdown. The settlement is the largest with a single corporation in U.S. history.
Citing officials familiar with the negotiations, the Associated Press reported today that the lender would pay the government $10 billion in cash and provide $7 billion in consumer relief.
Remember those mortgage-backed securities that Merrill Lynch, who is owned by BOA, was pushing back in the mid to late 2000s? Well it turns out that they were not quite as stable as promised! Okay so we already knew that but now someone is being held accountable and will have to pay. BOA has now agreed to a record breaking 17 billion dollar settlement, making it is the biggest single corporation settlement in US history. In the settlement terms it seems Bank of America will pay the government 10 billion in cash, 7 billion in consumer relief and they will have to acknowledge that they misrepresented the quality of the securities begin sold at the time through Merrill Lynch. The good news is that the smoke is clearing and we are very close and even beyond in some markets where we were when the bottom fell out in '07.
The consumer confidence index was at 86.4 in June and jumped up to 90.9 in July, putting it at the highest level since late October in '07. Before this June to July jump, economists were predicting a drop so this jump was an unexpected surprise.
It seems that the recent up-turn in hiring and improved economic growth are creating a more optimistic climate for consumers. The US is currently in one of the best hiring stretches we have seen since the recession ended in mid '09. This stretch has been going for the last 6 months and economist are expecting it to continue.
“Strong job growth helped boost consumers’ assessment of current conditions, while brighter short-term outlooks for the economy and jobs, and to a lesser extent personal income, drove the gain in expectations,” said Lynn Franco, director of economic indicators at board.
Jason Moon Real Estate Broker with ColdWell Banker Bain. Seattle, WA