Bank of America is negotiating a deal with the Justice Department and a number of states that could lead to a roughly $12 billion settlement related to the bank’s mortgage banking practices. At issue are allegations that Bank of America defrauded buyers of mortgage-backed securities by misleading them about the quality of the loans involved. The securities in question consisted of home loans that financial institutions bundled according to their risk. The products played a key role in the 2008 financial crisis. Loans that were rated as safe began to fail in huge numbers as the housing market collapsed. The bank already agreed in March to pay $6.3 billion to settle four lawsuits filed by the Federal Housing Finance Authority (FHFA), which has overseen government-backed housing finance firms Fannie Mae and Freddie Mac. Those lawsuits also alleged that the bank falsely represented mortgage loans.