Bank of America executives braced themselves Thursday morning for the public unveiling of a nearly $17 billion settlement with the Justice Department resulting from charges that the company misled investors about the quality and risk levels of mortgage-backed securities in the run-up to the financial crisis.
Executives spent the night reviewing the agreement's final details, in anticipation of issuing a news release discussing it before U.S. stock markets opened, said a source familiar with the matter. Separately, officials from the Justice Department scheduled a news conference in Washington to discuss the Bank of America agreement for 9 a.m. EDT.
BofA's long-anticipated settlement, which helps to resolve the majority of the bank's still-outstanding legal issues stemming from the mortgage crisis, is expected to consist of a cash penalty of about $9.6 billion, which will likely not be tax deductible, and a package of consumer-relief measures valued at $7 billion, said two people familiar with its details.
The latter portion of the settlement, much of which may be deductible, will take the form of loan modifications and other measures intended to help troubled homeowners, these people added.