Bank of America (BAC) is in talks with the Justice Department to pay at least $12 billion to settle the bank and it's associates alleged handling of shoddy mortgages in the runup to the financial crisis.
Once completed, the bank’s final tab to end the government probes is likely to surpass the record $13 billion that JPMorgan Chase (JPM) paid last year to settle similar allegations.
At least $5 billion of that amount is expected to go toward consumer relief—consisting of help for homeowners in reducing principal amounts, reducing monthly payments and paying for blight removal in struggling neighborhoods, these people said. As the negotiations with the government heat up, the bank is being pressed to pay billions more than the $12 billion it is offering.
