Report: Bank of America reaches record $16 billion mortgage settlement with U.S.

(Image credit: CC by: Wonderlane)

Bank of American has tentatively agreed to the single largest corporate settlement ever with the U.S. government, The New York Times reports, citing "people briefed on the matter." The deal, to settle charges related to the sale of sketchy mortgage-backed securities leading up to the 2008 financial crisis, will reportedly cost BoA about $16 billion, including $9 billion in cash.

The tentative civil agreement follows months of tough negotiating, and BoA finally proposed the $16 billion package after it lost a key case in U.S. District Court in New York City last month, eroding "what was left of the bank's negotiating leverage," say Ben Protess and Michael Corkery at The Times. An ultimatum from Attorney General Eric Holder — raise your offer or the Justice Department will sue — was the final ingredient. Most of the toxic mortgages were acquired when BoA bought Countrywide Financial and Merrill Lynch.

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.