Bank of America can’t shake off the string of mortgage fraud litigation hounding the bank.
The second-largest American bank is seeking to set up a meeting between CEO Brian Moynihan and U.S. Attorney General Eric Holder in an effort to resolve a possible multibillion settlement over charges that the bank sold faulty mortgage securities, Reuters reports.
In a separate case, a North Carolina judged okayed a Justice Department lawsuit against the company. The suit charges Bank of America (BAC) with civil fraud concerning the sale of the same bad home loans the attorney general is targeting.
Moynihan is following in the footsteps of JPMorgan Chase CEO Jamie Dimon, who met with Holder to close the deal on the mortgage settlement. JPMorgan (JPM) ended up accepting a $13 billion agreement that ended the bank’s mortgage securities problems.
The Department of Justice has not responded to Bank of America’s request for a meeting and the silence may indicate that Holder is not yet ready to meet one-on-one with Moynihan, people told Reuters.
Such meetings are unusual for the Department of Justice. Settlements are usual brokered between a company’s lawyers and law enforcement officials.
Bank of America has proposed a $12 billion payment to settle the probes, including about $5 billion in payments to struggling homeowners. The Justice Department offered a $17 billion settlement in the previous round of discussions and felt the bank’s proposal was not serious, according to a person with knowledge of the matter.
The face-to-face meeting between Moynihan and Holder is being pushed as the bank faces the possibility of a lawsuit from the U.S. Attorney’s office in New Jersey against Merrill Lynch’s actions leading up to the mortgage crisis. Bank of America had agreed to buy the floundering bank in 2008 at the peak of the financial crisis.
