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AKIPRESS.COM - U.S. Federal authorities are on the verge of imposing a $16.65 billion fine on Bank of America to settle allegations that it knowingly sold toxic mortgages to investors, the New York Times reports.
The sum would be the largest settlement between the government and a private corporation in the United States’ history, coming at the end of a long controversy surrounding the bank’s role in the recent financial crisis. In issuing bad subprime loans, many say, the bank helped fuel a housing bubble that would ultimately burst in late 2007, devastating the national and global economy, the Time said Thursday.
Since the end of the financial crisis, the bank has been instructed to pay more than $60 billion in fines and other claims.
Of the latest settlement, $7 billion will go to consumers faced with financial hardship. In turn, the bank largely exonerates itself from further federal scrutiny.
However, not all is forgotten. The Times also reports that federal prosecutors are preparing a new case against Angelo Mozilo, the former chairman and chief executive officer of Countrywide Financial, which Bank of America acquired in mid-2008.
As the country’s largest lender of mortgages, Countrywide Financial purportedly played a large role in distributing the bad loans. Mozilo has already paid the Securities and Exchange Commission a record $67.5 million settlement.