Bank of America is on the verge of finalizing a reported $17 billion settlement with the U.S. government over the packaging and selling of bad mortgages, and it would be the biggest single hit taken by a big bank since the financial crisis.
The financial penalties this week arose from an October 2013 civil verdict by a Manhattan federal court jury that found Countrywide financially liable for Hustle, which allegedly processed thousands of mortgage applications at high speed with little checking for fraud.
Bank of America on Thursday launched something called the “SafeBalance” account, which costs $4.95 a month and comes with no paper checks. Its primary selling point: you won’t overdraw your account. But current bank regulations already protect consumers from overdraft penalties.
Additionally, the investigation into the massive hack has “determined that the stolen information includes names, mailing addresses, phone numbers or email addresses” for 70 million Target customers.
The firm played a key role in Bank of America’s efforts to stall or delay paperwork tied to mortgage-modification efforts meant to help borrowers avoid foreclosure, according to a new report from Bloomberg.
The second-largest U.S. bank has clothed bitcoin in a veil of legitimacy by concluding this: “We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers.”
The U.S. Consumer Financial Protection Bureau is looking into whether credit card issuers are misleading customers when they sign up for these programs. The result could be new rules to ensure clarity and transparency.
Rising home prices has changed the mortgage landscape on many levels. For one, some big lenders are now competing with the Federal Housing Administration in offering 5 percent down-payment mortgages.
A jury this week found a top executive at Bank of America’s Countrywide unit, Rebecca Mairone, liable for at least some of the fraud related to selling bad mortgages. That executive went on to work on the Independent Foreclosure Review for JPMorgan Chase.
Mortgage credit availability was already tight before this recent wave of massive settlements over mortgage-backed securities and misrepresentations of toxic loans that fueled the financial crisis.