Bank of America has finally reached a settlement to pay a whopping $16.65 billion to the government for selling badly-designed mortgage-backed securities in the run up to the financial crisis.
Those mortgage-backed securities had been advertised to investors, including public pension funds and federally-insured financial institutions, as safe, strong investments with little risk. But the financial crisis saw those investments lose billions and billions of dollars. Securitization — which was supposed to decrease risk by spreading it out throughout the system, for example by bundling up lots of different mortgages together into mortgage-backed securities, and then selling those securities to investors — in reality turned the minor risk of mortgagees defaulting on their loans into a systemic risk that crashed the economy.
Many (but not all) of these mortgage-backed securities were created by Countrywide and Merrill Lynch, two firms Bank of America acquired during the financial crisis at pennies on the dollar. But those firms' assets came with the added burden of responsibility for their prior activities, for which Bank of America is now paying a steep price.
The settlement — which according to The Wall Street Journal is approximately equal to the firm's profits for the last three years — is the single largest settlement ever reached between the U.S. and a single company.
The terms of the settlement involve the bank paying $9.65 billion to government agencies, including the Justice Department, several states, and other government agencies. Much of that money will go to paying down the national debt.
And those payments are in addition to providing $7 billion worth of aid to customers through a variety of actions such as modifying mortgages for borrowers who owe more than their homes are worth, and donating money to housing counseling agencies.
The settlement is similar to other deals with major players in the financial industry for similar conduct. In July, Citigroup paid out $7 billion, and late last year JP Morgan Chase paid $13 billion. John Aziz
Do you love President Trump and contested land? Consider a move to Trump Heights.
On Sunday, Israeli Prime Minister Benjamin Netanyahu and his cabinet met in the disputed Golan Heights to dedicate a small settlement, previously known as Bruchim, to Trump. Now called Ramat Trump, or "Trump Heights," the president can't say it's the biggest, most beautiful settlement — only 10 people live there and it's surrounded by land mines — but it does now have a giant sign, trimmed in gold and flanked by U.S. and Israeli flags. The Syrian border is 12 miles away, while the closest Israeli settlement, Kiryat Shmona, is 30 minutes away.
Netanyahu moved fast; it was only in April that he announced he was renaming the outpost in honor of Trump, to thank him for reversing U.S. policy toward the region. Israel captured the Golan Heights from Syria during the 1967 Six-Day War, and annexed the territory in 1981, a move most governments consider illegal under international law. During Netanyahu's visit to Washington in March, Trump signed an executive order acknowledging the area, home to about 50,000 people, as Israeli territory. Israel said it hopes the name change will encourage more people to move to Ramat Trump. Catherine Garcia
Argentine President Mauricio Macri on Sunday vowed to fully investigate the massive electrical failure that plunged Argentina and Uruguay into darkness.
Both countries share an electrical grid, and when the electricity was cut off, tens of millions of people were without power. Parts of Chile and Paraguay were also affected. The lights went out on Sunday morning, and by Sunday evening, officials said more than 80 percent of customers in Argentina and 88 percent in Uruguay had power again.
Gustavo Lopetegui, Argentina's energy minister, said the electrical system is "robust," and while "we're not ruling out any possibility ... we don't think it is down to a cyber attack." Argentine media reports that officials are linking the outage to a failure in the transmission of electricity from a hydroelectric dam, BBC News reports. Catherine Garcia
Gary Woodland won the U.S. Open Sunday in Pebble Beach, California, his first major championship.
He was able to defeat Brooks Koepka, the two-time defending champ. Woodland, 35, was in the lead most of Sunday, and shot 2-under-par 69 to finish at 13 under. He started the week ranked No. 25 in the world, with three PGA Tour titles under his belt. Koepka is ranked No. 1 in the world, and was hoping to become the second person to win the U.S. Open three years in a row. Catherine Garcia
Sara Netanyahu, the wife of Israeli Prime Minister Benjamin Netanyahu, admitted to misusing state funds, and on Sunday was ordered to pay a $15,000 fine.
Netanyahu took a plea deal, with the charges reduced from fraud to intentionally exploiting another person's error. She will have a criminal record. Her lawyer, Yossi Cohen, claims that his client is innocent, and this was an attempt to bring down her husband.
The case was in court for four years, with Netanyahu accused of spending $100,000 on catering between 2010 and 2013, despite having her own personal chef provided by the state, The Guardian reports. Benjamin Netanyahu is also the focus of several corruption investigations, and Israel's attorney general announced earlier this year that he plans on indicting him. Catherine Garcia
In recent weeks, a record number of African migrants have been crossing the U.S.-Mexico border, fleeing from political persecution and economic hardship.
During one week, Border Patrol agents in Texas' Del Rio sector stopped more than 500 African migrants; only 211 African migrants were detained along the entire southern border during the 2018 fiscal year, The Associated Press reports. Most of the migrants are from the Republic of the Congo, Democratic Republic of the Congo, Angola, and Cameroon. They fly to South America from Africa, then travel by land to the U.S.-Mexico border, with many seeking asylum at ports of entry.
Migrants from Cameroon have said they fly to Ecuador because there is no visa requirement, and it takes about four months to get from there to Tijuana. While in Panama, they are often robbed, AP reports, and held in camps run by the government.
Over the last several days, 170 asylum seekers were bused to Portland, Maine, where Somali refugees were resettled in the 1990s. Hundreds more are expected to arrive in the near future. Catherine Garcia