The Federal Deposit Insurance Corporation as receiver for 26 failed banks announced a $1.03 billion settlement with Bank of America (BAC), which is included in the bank’s $16.65 billion settlement with the U.S. Department of Justice.
In one of the settlement claims, Bank of America was charged with misrepresenting the offering documents for 155 residential mortgage-backed securities purchased by failed banks in FDIC receivership.
According to the FDIC, from January 2011 to January 2014, as receiver for seven failed banks, it inherited or filed 14 lawsuits against the BofA entities and other defendants for violations of federal and state securities laws in connection with the sale of 63 residential mortgage-backed securities. The settlement will be distributed among the 26 receiverships.
The Bank of America settlement is the largest settlement on record and resolves claims over toxic residential mortgage-backed securities, collateralized debt obligations and an origination release on residential mortgage loans sold to Fannie Mae and Freddie Mac.
And the FDIC is not the only one cashing in on the Bank of America settlement. Nearly 17,000 Floridians will also receive an excess of $1 billion in relief, which is almost 14% of the total $7 billion that was allotted to consumer relief.