Thursday, August 21, 2014

Toxic mortgages: Bank of America will pay the largest fine in the history … – Il Sole 24 Ore

Toxic mortgages: Bank of America will pay the largest fine in the history … – Il Sole 24 Ore

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This article was published on 21 August 2014 at 15:42.
The last change is the 21 August 2014 at 18:54.

After rumors circulated yesterday, came the confirmation. Bank of America has reached an agreement with the Justice Department, some federal agencies and six American states to store the charges related to toxic mortgage-related financial products sold in the period preceding the outbreak of the crisis. As you said in a statement, the bank will pay a total fine of $ 16.65 billion: 9.65 billion in cash (5.02 billion to 4.63 billion in civil fines and compensatory payments) and about 7 billion redemption to customers.

This is fine most of the story Use salt, the higher the fine from $ 13 billion paid by JPMorgan.

The agreement continues the note, concerns securitizations, issuance and sale of residential mortgage-backed securities and CDOs (collateralized debt obligations, complex “packages” of derivative instruments that use loans as collateral).

The fine – that solves a case born in large part from the acquisition by the bank of Merrill Lynch and Countrywide Financial – will weigh on profits before tax in the third quarter to $ 5.3 billion. In other words, will reduce earnings per share of 43 cents.

Brian Moynihan, president and CEO of Bank of America, had already told investors and analysts that this would be the last major issue that emerged from the financial crisis to restrain the bank. The group has spent more than $ 60 billion to solve their legal problems.



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