Bank of America Settles Bad Mortgage Claims for $14 Billion
The figure represents the banking industry's single largest settlement related to the subprime mortgage boom and the subsequent financial crisis of 2008.
Of that chunk, $8.5 billion will go to settle claims by the largest holders of the securities, like Pimco, BlackRock and the Federal Rserve Bank of New York, who have been pushing for a settlement since last fall.
Kathy D. Patrick, the attorney that is representing the 22 investors, said in an interview with the New York Times that, "Bank of America has charted a path that our clients expect other banks will follow."
Analysts are predicting that the financial services industry faces potential losses of over $100 billion.
Ms. Patrick claims, that in an act of hubris that personifies the entire climate of the mortgage market leading up to the financial crisis, Bank of America sold her clients loans with little or no proof of assets or income and that the institution failed to adequately collect payments from troubled borrowers.