After defrauding investors and customers in the lead up to the financial crisis, Bank of America has agreed to a settlement totaling $16.6 billion, the largest with a single company in U.S. history, the U.S. Department of Justice announced Thursday.
Bank of America, the second largest in the U.S., agreed to pay a $5 billion cash penalty, another $4.6 billion in remediation payments and provide about $7 billion in relief to struggling homeowners.
In addition to the settlement, Bank of America will admit that it failed “to disclose to investors key facts about the actual quality of the loans they packaged up into residential mortgage backed investment securities, or RMBS.”
According to the Department of Justice, relief to distressed homeowners and communities will come by way of significant loan modification with mortgage principal reductions, community reinvestment and neighborhood stabilization and affordable rental housing.
Florida is slated to receive $1 billion of the settlement monies which would help about 17,000 Floridians, according to Attorney General Pam Bondi. It is not yet known who will actually obtain relief or which distressed areas will be targeted.
