BOA strikes US$16.65b mortgage settlement deal

[WASHINGTON] Bank of America Corp has reached a US$16.65 billion settlement with US regulators to settle charges that it misled investors into buying troubled mortgage-backed securities.

The settlement announced yesterday by the US Department of Justice calls for the second-largest US bank to pay a US$9.65 billion cash penalty, and provide US$7 billion of consumer relief to struggling homeowners and communities.

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 Corp, once the nation's largest mortgage lender, and Merrill Lynch & Co.