Bank of America Corp. announced plans this morning to set aside $14 billion to pay investors who bought securities it assembled from mortgages that later soured, an agreement that the company expected would lead to a second-quarter loss of $8.6 billion to $9.1 billion, The New York Times reported.  

The whopping charge represents the banking industry’s biggest single settlement tied to the subprime mortgage boom and the subsequent financial crisis of 2008.

Of the $14 billion, $8.5 billion will go to help settle claims by a group of heavyweight holders of the securities, including PIMCO, BlackRock and the Federal Reserve Bank of New York, that have been pressing for a settlement since last fall.

The losses stem largely from mortgages underwritten by Countrywide Financial Corp., the subprime mortgage lender that Bank of America bought in 2008.

“This is another important step we are taking in the interest of our shareholders to minimize the impact of future economic uncertainty and put legacy issues behind us,” Brian T. Moynihan, the bank’s CEO, said in a prepared statement. “We will continue to act aggressively, and in the best interest of our shareholders, to clean up the mortgage issues largely stemming from our purchase of Countrywide.”

The deal will also require Bank of America to improve its payment collection process by hiring specialists to focus on high-risk loans and to do a better job of tracking whether the company is adhering to its own internal loan-servicing standards. 

The bank said those additional obligations, on top of the new servicing requirements that were part of a deal with federal regulators, will result in a charge of $400 million as the bank lowers the value of its so-called mortgage servicing rights.

Bank of America, JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. have the greatest exposure to legal claims that they bundled troubled home loans and sold them as sound investments. Together, they are likely to absorb roughly 40 percent of the industry’s mortgage-related losses.