BANK OF AMERICA SETTLES TOXIC MORTGAGE CLAIMS FOR RECORD $16 BILLION

BANK OF AMERICA SETTLES TOXIC MORTGAGE CLAIMS FOR RECORD $16 BILLION

On Thursday, Bank of America announced that it has agreed to settle and $16 billion for all the trouble it caused in the mortgage financial crisis. The settlement is the largest civil settlement with a single entity in the history of the Unites States. (Source: DS News)

According to the settlement, Bank of America has agreed to pay $9.65 billion in cash to the Justice Department, various federal regulators, and the states of California, Delaware, Illinois, Kentucky, Maryland, and New York.

The remaining $7.0 billion will be paid in the form of consumer relief including mortgage modifications, community stabilization, and loans to low and moderate income communities.

The agreement releases Bank of America from allegations that it was involved in the mortgage financial crisis, that it was aware that the loans it gave were bad and that it knowingly misrepresented mortgages when they were sold. It also releases the lender from violations of underwriting guidelines made before the mortgage crisis.

In a statement, Bank of America announced that the majority of the claims stemmed from conduct that occurred at countrywide and Merrill Lynch before its acquisition of the two companies.

While certainly a bandaid in the whole mortgage fiasco, this settlement is good news for consumers who are looking to Bank of America for loan modifications and short sales. It means that Bank of America will most likely cooperate to the full extent in order to have such options approved.

If Bank of America is your lender, call us today to discuss how this settlement affects you. The first consult is always free of charge.

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