Bank of America in talks on $12 billion mortgage settlement

Updated:

Loading
CHARLOTTE, N.C. —

Federal investigators say they're working out a $12 billion settlement with Bank of America over bad mortgages.

CNN reports it is because of allegations the bank defrauded people who bought mortgage-backed securities by not telling them about the quality of the loans.

Those securities played a major role in the recession in 2008.

At least $5 billion of the settlement would go to helping homeowners pay off their principals and cutting monthly payments.