News reports indicate that Bank of America Corp (NYSE:BAC) is far apart from coming to a settlement-agreement with the Department of Justice (DOJ) on its illegal dealings of mortgage securities during the economic crisis. The bank has been the most hit in terms of settlements due to dealings of its Merrill Lynch Branch.
The bank has already settled nearly 16 cases totaling $56 billion in value. Bank of America Corp (NYSE:BAC) has now been dealt a major blow in its attempt to settle with the DOJ. Fox Business reporter, Liz McDonald, reported that talks have stalled as there are contentious points especially on the total settlement package as well as other terms.
“A legal cloud hangs over it because the DOJ and BOFA talks have yet again broken down even though they resumed on Tuesday there are still sticking points that are stopping the settlement of mortgage-backed securities,” said McDonald.
Bank of America Corp (NYSE:BAC) has upped its settlement package to $13 billion up from $12 billion and is consequently demanding for consumer relief as part of the deal. The department of Justice is, on the other hand, pushing for more cash with sources quoting a figure of around $17 billion. It is also not clear whether Bank of America will include its $9 billion settlement with the FHSA in its final settlement with the Department of Justice. JPMorgan Chase & Co. (NYSE:JPM) got to include its $4 billion penalty with the FHFA on its final settlement of $13 billion with the department of justice.
“What we are also waiting to hear is whether or not Bank of America Corp (NYSE:BAC) will get to include in whatever the final settlement is, that earlier $9 billion settlement with the FHFA (Federal housing finance administration),” said McDonald.