Following the most extensive federal probe into Wall Street misconduct leading to the 2008 financial debacle, Bank of America has agreed to pay a record USD$16.65 billion fine for selling toxic financial products.

Announced on Thursday by Attorney General Eric Holder, Bank of America will give back USD$7 billion in homeowner and neighborhood relief funds along with paying a USD$9.65 billion penalty.

Like Us on Facebook

Holder's office issued a written statement saying Bank of America's actions went well beyond the scope of doing legitimate business. Criminal charges still could be forthcoming against bank officials, Holder added.

This is the largest fine and settlement by a financial company in U.S. history. Additionally, Bank of America is said to have spent USD$70 billion in legal bills related to the mortgage scandal.

The settlement closed the door on civil action against the Charlotte N.C.-based financial behemoth that played a huge role in the 2008 collapse of the mortgage industry and housing market leading to the biggest recession since the Great Depression of the 1930s.

The bank agreed to apply billions of dollars to assist homeowners who had difficulties paying down mortgage balances. The bank also agreed to demolish properties it had foreclosed in some cities. This will help alleviate urban blight as unoccupied houses mar neighborhood housing values and provide shelter for criminal activities.

Brian Moynihan, Bank of America chief executive officer, issued a statement saying bank officials believed the penalties ended their last remaining issue pertaining to the 2008 financial crash. The settlement was in the best interest of bank stockholders and would allow the entity to concentrate on its future, he said.

Bank of America bought Countrywide Financial in 2008 as the housing market fell apart. The nation's largest mortgage lender before the economic crash, Countrywide is blamed by regulators for being one the most egregious issuers of bogus mortgages and packaging of bad mortgages into stock bundles sold on Wall Street leading to the financial collapse.

The company pioneered so-called "liar loans" in which people didn't have to prove they could re-pay loans or even state accurately their incomes. It's founder, Angelo Mozilo, remains in the government's crosshairs with federal officials reportedly preparing litigation against him.

TagsBank of America, liar loans, bad mortgages, attorney general eric holder, Wall Street, angel mozilo, toxic financial products