Unnamed people with the knowledge of matter were quoted by The Wall Street Journal as saying that the bank has agreed to pay nearly $9bn in cash to the US government, states and other government entities.
The agreement is likely to be finalized this month, the sources added.
Meanwhile, the bank would pay the remaining money in consumer relief, such as reducing mortgage balances for struggling homeowners.
Settlement talks between BofA and the US regulators were stalled after the DoJ disagreed with the bank’s proposal to pay a bigger portion of the fine in so-called soft money.
While, BofA initially offered to pay $13bn, including cash and consumer relief, the DoJ sought heftier cash penalty settle probe into alleged sale of private-label mortgage-backed securities by the North Carolina-based bank in the run-up to the 2008 financial crisis.
BofA spokesman Lawrence Grayson declined to comment on the report.
If finalized, the agreement would be the largest penalty paid by any bank for sale of shoddy mortgages, surpassing a $13bn deal agreed by DoJ and JPMorgan Chase over similar issues, early this year.
BofA had agreed to pay nearly $6bn to the Federal Housing Finance Agency (FHFA) earlier this year over similar mortgage issues.
In addition, the bank also reached a $650m agreement with American International Group (AIG) to settle the defective mortgage-backed securities litigation.
Image: Bank of America is close to signing a $16bn to $17bn agreement to settle defective mortgage sale probe. Photo:
courtesy of User Jleon.
