Denver, CO, 06/11/2014 (Stocksntrade) – Bank of America Corp. (NYSE:BAC) and the Justice Department negotiations stalled on Monday over the multibillion dollar settlement deal as the bank offered $12 billion towards the settlement against the Justice Department’s settlement terms of approximately $17 billion in worth. Earlier, the Justice Department set a deadline of Friday, for the bank to produce its best offer which was later extended until the Monday evening. The acting associate attorney general, Tony West is leading the discussions over mortgage penalties with the Bank of America and he is currently travelling which is believed to delay a final decision.
The Similar Story
The Justice Department also entered into deadlocks over the negotiation talks with JPMorgan Chase & Co.(NYSE:JPM) where the CEO of the bank, Jamie Dimon argued that many of the mortgage securities, including Bear Stearns and Washington Mutual, were purchased by the bank at the urging of the government. However, just before the announcement of lawsuit by the Justice Department, Mr. Dimon called Mr. West to try with settlement talks and the bank’s willingness to offer more money. Later, the negotiations were conducted successfully and settlement was reached. Taking lessons from this, it is likely that Bank of America Corp. (NYSE:BAC) may also try to reach some settlement to avert a lawsuit.
Negotiations or Lawsuit
Bank of America’s has similar argument like that of JPMorgan Chase & Co. (NYSE:JPM) where it felt pressured by the Treasury Department as well as by the Federal Reserve to go through with the acquisition of mortgage securities sold by Merrill Lynch during the financial crisis. It is likely the bank will further pursue negotiations to avert the lawsuit which accuse Bank of America Corp. (NYSE:BAC) of selling mortgage investments that resulted in billions of dollars in losses.
On Tuesday, Bank of America shares gained 0.51% and closed at $15.92.