Bank of America to pay the LARGEST BILL of the financial crisis

Bank of America will soon pay the largest settlement of the 2008 financial crisis. On Wednesday, the banking giant announced that it had agreed to pay $8.5 billion to investors who lost money buying fraudulent mortgage securities. It also announced an additional $5.5 billion to pay out liabilities related to Fannie Mae and Freddie Mac mortgages and other unnamed parties. 

LOS ANGELES (Catholic Online) - The $14 billion agreement is the largest settlement paid to date by any financial institution as a result of the 2008 financial crisis. The initial $8.5 billion will be paid almost entirely to 22 investors including large investment firms such as MetLife Inc., and Goldman Sachs who lost money buying the fraudulent securities.

Angry investors had charged that Bank of America misled investors by selling securities they claimed were rated highly when they were actually comprised of subprime mortgages that had been given to people with questionable credit.

The settlement does not end all of Bank of America's woes. Federal regulators and all 50 state attorneys general are investigating Bank of America for the integrity of their mortgage practices. Allegations persist that bank of America has improperly foreclosed on homeowners by relying on incomplete or unverified documentation. These investigations could result in another large payout by the bank that will undoubtedly range in the billions of dollars.

The immediate result of the settlement was a 3% rise in bank of America's stock as it relieved uncertainty over how much the pending suit would cost the bank. With the price now settled, investors can buy and sell the stock with less uncertainty of its long-term profitability.

By settling, the bank avoids a potentially more costly and lengthy legal battle which would do little to improve its public image and investor confidence. And while Bank of America still has more legal issues to reconcile, it hopes that its recent efforts to improve its practices and to resolve legal obligations are helping to rebuild confidence in the troubled bank.

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