BofA said negotiating $12bn settlement

Bank of America is negotiating a deal with the Justice Department and a number of states that could lead to a roughly $12bn settlement related to the bank's mortgage banking practices, according to a U.S. law enforcement official.

CNN Money reports that at issue are allegations that Bank of America defrauded buyers of mortgage-backed securities by misleading them about the quality of the loans involved.

The securities in question consisted of home loans that financial institutions bundled according to their risk. The products played a key role in the 2008 financial crisis. Loans that were rated as safe began to fail in huge numbers as the housing market collapsed.

The bank already agreed in March to pay $6.3bn to settle four lawsuits filed by the Federal Housing Finance Authority (FHFA), which has overseen government-backed housing finance firms Fannie Mae and Freddie Mac.

To access the complete CNN Money article hit the link below:

Bank of America in talks on $12 billion mortgage settlement 

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