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BofA agrees to pay $17-billion penalty over mortgage meltdown

BofA agrees to pay $17-billion penalty over mortgage meltdown

Bank of America Corp. has agreed to fork over nearly $17 billion to settle government claims over toxic mortgage securities that helped trigger the Great Recession, according to people close to the negotiations with the Justice Department.

The agreement – $9 billion in cash penalties and the rest in mortgage modifications and other consumer relief – remained tentative Wednesday, these people said. It would be by far the largest in a series of billion-dollar settlements with the “too big to fail” banks over the subprime mortgage meltdown.

At issue are $245 billion in soured home loans, only $10 billion of which were from Bank of America. The rest were...