Bank of America in R178bn mortgage settlementComment on this story
Bank of America has reached a $16.65 billion (R178 billion) settlement with US regulators to settle charges that it misled investors into buying troubled mortgage-backed securities.
The settlement announced on Thursday by the US Department of Justice calls for the second-largest US bank to pay a $9.65 billion cash penalty, and provide about $7 billion of relief to struggling borrowers.
It is expected to resolve the vast majority of the Charlotte, North Carolina-based bank's remaining liabilities tied to its purchases of Countrywide Financial, once the nation's largest mortgage lender and Merrill Lynch.
Bank of America said the accord is expected to reduce third-quarter earnings by about $5.3 billion before taxes, or about 43 cents per share after taxes. - Reuters