Thaindian News

New York, May 30 (THAINDIAN NEWS) The Bank of America Corp. has reached a deal to amicably resolve a suit which was filed by the US Department of Justice. The bank is expected to pay about $20 million in the settlement deal.

At the center of the suit is Bank of America’s hasty foreclosure process. The Justice Department said the bank failed to check the military background of its customers before finalizing the process. The Justice Department suspects that as at the 31st of May 2009, about 160 servicemen had their homes foreclosed with the bank failing to properly do a background check. Some of the affected servicemen had served in Afghanistan and Iraq.

Some major banks in the United States have come under criticism for the way that they carry out their foreclosures. Last year, some of the banks including the Bank of America announced that they have halted their foreclosure processes to verify that they have done the right thing. The banks were accused of failing to read through the documents before signing the foreclosure.

The announcement that Bank of America has reached a deal to settle its dispute with the Justice Department out of court helped push the value of the bank’s share by 2.01 percent on Friday to close at $11.57.