Tag Archives: Justice Department

Bank of America reported on Wednesday its earnings for the third quarter, revealing that profits tanked under the weight of a massive legal charge stemming from a recent mortgage settlement with the Justice Department. Factoring in the settlement, BofA's mortgage unit was the only one of its five businesses that didn't see income grow over the last year.

The ongoing legal battle between the U.S. government and Bank of America over the sale of soured loans to Fannie Mae and Freddie Mac before the financial meltdown continued last week as lawyers for the government argued against a motion to throw out a fraud verdict rendered against the bank.

Bank of America announced Thursday morning it has agreed to pay a record $16.65 billion to resolve claims of financial fraud in the sale of toxic mortgage-backed securities during the years leading up the financial crisis.

Fifth Third Bancorp has reached a settlement agreement with the Justice Department in which it will pay more than $1.5 million over allegations of loan discrimination against applicants with disability status. "Today's announcement holds lending institutions accountable for their actions, and is a reminder that every American has the right to apply for a home loan and live in the community of their choice," said Gustavo Velasquez at HUD.

Bank of America and the Justice Department are close to completing a long-rumored and record-setting deal to resolve allegations of misconduct sales of mortgage-backed securities that went bad, according to a report from the Wall Street Journal.

A federal judge has ordered Bank of America to pay nearly $1.3 billion in penalties over a fraud case decided last year. The case revolved around a lending procedure referred to as the "High-Speed Swim Lane, "which prosecutors say was designed to churn out loans as quickly as possible with little regard for risk.

The ongoing tension between the Justice Department and the House Oversight Committee saw a new development this week as Rep. Darrell Issa (R-California), committee chair and vocal critic of Attorney General Eric Holder, requested the department turn over all of its documents related to its recent securities settlements with JPMorgan Chase and Citigroup.

Ratings agency Standard & Poor's might be looking to strike a deal of up to $1 billion with the government to settle a suit filed last year, the Wall Street Journal reports. The suit alleges that S&P "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors" in collateralized debt obligations and securities backed by residential mortgages between September 2004 and October 2007.

On the heels of the government's $7 billion settlement with Citigroup over toxic residential mortgage-backed securities (RMBS), leaders at the Department of Justice revealed Monday there may be similar settlements or lawsuits on the way. The comments take on deeper meaning in the context of the government's ongoing dealings with Bank of America, which was reportedly close to reaching a settlement on its own MBS case until negotiations stalled.

Citing unnamed sources, the Wall Street Journal reported late Tuesday that Citigroup and the Justice Department are closing in on a $7 billion settlement to resolve an investigation into the bank's sale of faulty mortgage-backed securities. The Journal reports that according to people familiar with the matter, the deal will include $4 billion in cash payments to the federal government, with the rest coming in the form of borrower relief.