Bank of America is negotiating to pay at least $12 billion to settle Justice Department investigations into the bank’s alleged handling of shoddy mortgages, according to a Wall Street Journal report late Thursday, which cites people familiar with the talks.
More than $5 billion of that total is slated to help struggling homeowners, including making their monthly mortgage payments more affordable and removing blight in neighborhoods heavily impacted by foreclosures.
It’s likely that the various government probes and lawsuits against the North Carolina bank will exceed a $13 billion settlement last year by J.P. Morgan Chase (JPM) over similar accusations. Bank of America has previously settled a case with the Federal Housing Finance Agency for $6 billion.
An agreement between federal officials and Bank of America has yet to be finalized. Attorney General Eric Holder has said that he hopes to resolve a number of cases against financial firm related to the economic crisis before he leaves office.
The size of the potential deal did not appear to spook investors. Shares of Bank of America (BAC) remained flat in after-hours trading.
