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.
Jason Moon Real Estate Broker with ColdWell Banker Bain. Seattle, WA