BofA near an $8.5 Billion Settlement on Securities
Wednesday, June 29, 2021 9:20 AM

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Bank of America Corp. (NYSE: BAC) is close to finalizing a deal to pay $8.5 billion to settle claims by investors who purchased mortgage-backed securities and lost money, according to people familiar with the matter. The settlement would wipe out all of the company’s earnings in the first half of this year.

The deal would encourage other investors holding mortgage-backed securities filled with now-toxic home loans to pursue claims against other large mortgage lenders such as Wells Fargo & Co. and JPMorgan Chase & Co., analysts told Reuters.

A settlement, first reported by The Wall Street Journal, would be the largest in the banking industry to date. It would also require approval by Bank of America's board, which met on Tuesday to discuss it, according to the source.

The bank has been fighting claims by a group of 22 investors, including, BlackRock Inc., MetLife Inc. and the Federal Reserve Bank of New York, over the housing-related securities it sold before the financial crisis.

A Bank of America Spokesman declined to comment on the matter. Shares of Bank of America rose 3.23 percent to $11.17 in pre-market trading Wednesday.