In the largest settlement by a single company in history, the Bank of America Corp. will pay $17 billion dollars to the U.S. Department of Justice.
The settlement includes $9.65 billion paid in cash and $7 billion in aid to communities and homeowners hit hard by the housing market crash that triggered the Great Recession. Included in the aid is funding for some mortgage reductions and more affordable rental housing.
The deal settles claims from the Justice Department, the Securities Exchange Commission, and other federal agencies, as well as California, New York, and four other states. This is the largest settlement since the economic fiasco in which millions of Americans lost their homes to foreclosure.
California will receive $300 million from the settlement to reimburse its two biggest public pension funds, the California Public Employees’ Retirement System and the California State Teachers’ Retirement System.
The deal requires Bank of America to admit making serious misrepresentations about the quality of its residential mortgage-supported securities issued by itself, Countrywide Financial, and Merrill Lynch.