Bank of America Corp. has offered US$13 billion to settle a mortgage-securities probe in the United States, but the Justice Department is yet to agree on the deal terms, Wall Street Journal reported Wednesday, citing people familiar with the matter.
The bank’s offer includes cash and consumer relief, but the Justice Department wants a much heftier cash penalty, the report said. Another big sticking point is how the settlement would be structured, it said.
The lack of progress leaves a legal cloud hanging over Bank of America, even as it said Wednesday that it had resolved other private lawsuits over mortgages securities, including long-running securities lawsuits from American International Group, the Journal noted.
Bank of America lawyers met Justice Department officials on Tuesday in Washington, but the meeting it ended with no progress made toward a final deal, sources were quoted as saying.
The bank wants most of the deal to be in soft money, where it gets credit for modifying mortgages for struggling homeowners and other moves that benefit customers in financial distress, while the Justice Department wants BofA to significantly increase its offer on the cash penalty portion, the report said.
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