by: Jim Bradley Updated:
CHARLOTTE, N.C. - Bank of America has been weighted down by the financial fallout from one disastrous move for six years after buying Countrywide Financial in 2008.
Its portfolio of toxic mortgages and fraudulent activities have already cost BofA shareholders $60 billion in legal fees and settlements and now the bank is reportedly ready to pay billions more to stave off a lawsuit from the U.S. Justice Department.
Bank of America won't confirm any agreement but the Wall Street Journal is reporting the bank's board of directors has OK’d a deal to pay a record $16 billion to $17 billion in penalties.
It's the biggest civil penalty ever for a U.S. corporation.
Banking expert Tony Plath said it's also the costliest business mistake in the history of American business.
"The shareholders of the company wound up paying about $80 billion for the acquisition of Countrywide and mortgage missteps that Countrywide made.
That's equivalent to over 5 years of net income to the company," he said.
Bank of America will pay $9 billion dollars in penalties to the Justice Department as part of the reported deal, which is not expected to be finalized this week.
The remaining $7 billion to $8 billion will go towards assisting struggling homeowners.
At Charlotte's Community Link housing agency, Executive Director Floyd Davis said there are still many people behind on their mortgages.
"We're seeing about a dozen people per week still coming in who are delinquent on their mortgages and looking for help," Davis said.
Despite the cost of the settlement to BofA, Tony Plath says it is ultimately good for the bank, shareholders and the city of Charlotte.
It is expected to be the last of the billion-dollar settlements connected to the mortgage crisis.
"It's done," said Plath, "So now the bank can go back to what banks always do -- making loans, accepting deposits, hiring people and all the things banks do to promote economic development.