Blurred Lines in Big Bank Mortgage Settlements

The latest settlement with a big bank, this time Bank of America’s $16.65 billion resolution over shoddy mortgage and related mortgage-backed securities that lost much of their value, has all the accoutrements we have come to expect: a claim of historic significance supported by a statement of facts referencing a few embarrassing e-mails to establish the requisite venality for a large penalty. A prominent feature is a news conference where Attorney General Eric H. Holder Jr. hails the resolution as yet another blow against the reckless (or worse) banking practices that led to the financial crisis. Like a graduation speech or school concert, however, the settlements start to run together with little to distinguish them. In the past year, JPMorgan Chase and Citigroup joined Bank of America in resolving investigations into mortgage operations, much of which took place in companies that the banks acquired during the financial crisis. More in the New York Times here.

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