BofA mortgage settlement talks said to have stalled

Talks have stalled between Bank of America and the Justice Department over a multibillion-dollar settlement involving mortgage-backed securities, The New York Times reported Tuesday night.

The Department of Justice settlement would cover securities for which the government believes the bank misrepresented their quality. Last week, The Wall Street Journal, citing people familiar with the negotiations, reported that the bank was in talks to pay at least $12 billion to settle probes by the Justice Department and a number of states over mortgages.

From The New York Times story:

The talks stalled on Monday after the bank’s latest offer — more than $12 billion to resolve state and federal investigations into its sale of mortgage investments that later imploded — fell far short of prosecutors’ demands, according to people briefed on the matter. The Justice Department, which had imposed a Monday evening deadline for the bank to deliver its near-final offer, has sought a settlement worth roughly $17 billion, which would be the largest payout by any bank to date.

A spokesman for Bank of America declined to comment. A spokesperson for the Justice Department could not be immediately reached for comment.

Bank of America has paid billions of dollars in settlements to resolve financial crisis-era legal issues. Last month, CEO Brian Moynihan called the Justice Department settlement the last big outstanding legal issue the Charlotte-based bank is facing.