Bank of America and the financial crisis


Bank of America buys Countrywide Countrywide Financial, the troubled lender that has become a symbol of the excesses that led to the subprime crisis, agrees to be bought out by Bank of America for just over $4 billion in stock. $108 Million Settlement in Nationwide Fee Complaint Countrywide Home Loans and its mortgage servicing unit, now part of Bank of America, agree to pay $108 million to settle federal fees that the company overcharged customers who were struggling to keep their homes. Countrywide Settles Pennsylvania Loan Lawsuit Countrywide Home Loans agrees to pay Pittsburgh Chapter 13 bankruptcy trustee $325,000, settling a case in which the lender was accused of abusive practices in nearly 300 court-supervised mortgages . Bank buys Merrill Lynch Merrill Lynch agrees to sell itself to Bank of America for around $50 billion to avoid a worsening financial crisis. The hasty merger gives Bank of America a footprint in nearly every facet of banking and propels it to the next level of the nation’s financial institutions. $150 Million Settlement With SEC Over Merrill Deal In a ruling that frees Bank of America from some legal trouble, a federal judge writes that he reluctantly approved a $150 million settlement. But even as the judge approves the settlement, he is speaking harsh words for the Securities and Exchange Commission, saying the deal is “half-baked justice at best.” In August 2009, the judge rejected the SEC’s first settlement, which would have required the bank to pay $33 million. $600 million class action lawsuit settlement against Countrywide The settlement ends several class action lawsuits that claimed Countrywide was covering up growing risks by easing its lending standards. The settlement also clears former executives and finance companies that purchased Countrywide stock and were named in the class action lawsuits. Former Countrywide chief settles fraud case Angelo R. Mozilo, the former chief executive of Countrywide Financial, once the nation’s largest mortgage lender, agrees to pay $67.5 million to settle a civil fraud case filed by the Securities and Exchange Commission the previous year. Countrywide paid $20 million of Mr. Mozilo’s $67.5 million payment as part of a compensation settlement. Redemption of $2.5 billion in mortgage debt The deals relate to home loans that Countrywide Financial sold to Fannie Mae and Freddie Mac at the height of the mortgage bubble. The two government-controlled housing giants, which have suffered billions of dollars in losses in recent years, said the lender misrepresented the quality of loans. $1.6 billion insurance settlement The bank announces a $1.6 billion settlement with Assured Guaranty, the insurer that has guaranteed several of Countrywide’s loan-backed mortgage bond transactions. $20 million military foreclosure settlement The Justice Department is accusing mortgage service companies of wrongfully foreclosing the homes of military service members. Without admitting wrongdoing, Countrywide’s former unit agrees to pay approximately 160 victims of illegal foreclosures from January 2006 to May 2009 $20 million. Mortgage Debt Investor Settlement is reached with a group of more than 20 investors, including asset managers Pimco, Metropolitan Life and BlackRock, as well as the Federal Reserve Bank of New York. It wipes out all of the bank’s profits in the first half. $335 million settlement in biased Justice Department boom lawsuit. $11.8 billion foreclosure abuse settlement Government officials and five of the nation’s largest banks agree to an $26 billion foreclosure abuse settlement. The amounts of the individual banks in the agreement are linked to their share of the services market. The largest, Bank of America, will provide $11.8 billion. The bank also agrees to a $1 billion settlement with the federal government over nationwide loans made to “unqualified” borrowers and insured by the Federal Housing Administration. Merrill’s $2.43 billion shareholding settlement Shareholders, led by pension funds including those in Ohio and the Netherlands, had accused Bank of America of misleading investors at the about the acquisition of Merrill Lynch. The bank has denied the allegations, but says it has agreed to settle in order to put the matter behind it. Jury finds bank responsible for selling faulty mortgages The jury’s decision is seen as a victory for the government in its effort to hold banks accountable for their role in the housing crisis. The jury also found that a senior executive in Bank of America’s national finance unit was responsible, assigning some — if not all — of the responsibility for wrongdoing to one individual. $6.3 billion FHFA mortgage lawsuit settlement The bank agrees to settle a lawsuit stemming from troubled mortgage-backed securities it cobbled together and sold to Fannie Mae and Freddie Mac. As part of the settlement with the Federal Housing Finance Authority, the bank will also repurchase mortgage-backed securities valued at approximately $3.2 billion. The conclusion comes the day the bank and its former chief executive, Kenneth D. Lewis, reach an agreement to resolve another lawsuit stemming from the financial crisis. $1.3 billion penalty in federal mortgage case Ruling comes nine months after federal prosecutors persuaded a jury to find Bank of America liable for selling bad loans to Fannie Mae and Freddie Mac before the crisis financial. $16.65 billion mortgage settlement Bank of America and the Department of Justice wrap up the most thorough federal investigation into the sale of troubled mortgages by a Wall Street bank since the 2008 financial crisis. forces Bank of America to pay a $9.65 billion fine and provide approximately $7 billion in relief to devastated homeowners and neighborhoods.


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