Bank of America is poised to pay what may be the biggest settlement of the financial crisis era: $8.5 billion. The sum exceeds the company's profits earned so far this year and is roughly equivalent to Armenia's GDP. "It’s about time the industry resolves issues from the financial crisis and focuses more on righting their companies and improving the economy," bank analyst Michael Mayo told The New York Times. "This is the most significant step since the financial crisis that helps do that.”

This latest development marks the end of Bank of America's cleaning up after Countrywide Financial. In 2008, Bank of America, the nation's biggest in assets, bought Countrywide, a subprime mortgage lender that pretty much epitomizes all the bad things that caused the financial crisis. Countrywide is one of those companies packaged subprime mortgages into bonds and sold them to investors who lost billions when the housing bubble burst. The group of 22 investors who have been battling Bank of America for nine months to recover losses from the $105 billion in mortgage-backed bonds, they bought from Countrywide. This settlement covers not only their assets but all of the mortgage-backed bonds sold by Countrywide, $424 billion worth in total.

Bank of America is an unexpected winner in this scenario. It's an expensive win for sure, but one that moves the bank ahead, further away from the financial crisis that tarnished its image so terribly. Though he once told shareholders he would fight to avoid paying settlements, Bank of America CEO Brian Moynihan reversed his course at the end of last year, telling shareholders he hoped "to minimize the impact of future economic uncertainty and put legacy issues behind us.” Mission accomplished says Halah Touryalai at Forbes:

The good news for BofA is that it seems to be putting a significant chunk of its Countrywide problems behind it now that its agreed to settle with these investors. Back in January it agreed to payout $3 billion to Fannie Mae and Freddie Mac for similar claims. BofA shares are up over 2% in early trading.

All of the other banks are winners as a result. The money that's leaving BofA's coffers is heading straight to other banks. Shira Ovide at The Wall Street Journal explains how the market reacted to news of the settlement:

An $8.5 billion mortgage-security settlement has added about $11 billion in market value to four giant U.S. banks. It’s a win!

Share prices of Bank of America, J.P. Morgan, Wells Fargo and Citigroup are all roaming higher in early trading after Bank of America announced a settlement totaling $8.5 billion with unhappy mortgage-security investors.

The lawyer who brokered the deal is obviously a winner. The New York Times identified Kathy Patrick, a litigator at a small Houston law firm, as the main architect of the settlement. Because her law firm is one of few without any potential conflicts of interest in lawsuits against the nation's largest banks, Patrick is now responsible for over $10 billion in settlements from major financial institutions. Peter Lattman at The Times speculates:

It is unclear, for the moment, how Ms. Patrick and her partners will profit from the lawsuit against Bank of America. But the firm often gets paid on a contingency basis, meaning it takes a percentage of the settlement as compensation.

If that is the case, this would be one Texas-size payday for Ms. Patrick and her Gibbs & Bruns partners.

The American people will be winners, eventually. We should expect more big settlements from big banks. The nation's five biggest banks are prepared to spend $20 billion in similar litigation suits and Moynihan's Bank of America could set the tone for handling these cases quickly. "If Wall Street's response to today's settlement news is indicative of what it wants from Moynihan, we'll see Bank of America settle its biggest legal claims as quickly as possible, take the financial hit, and move on," writes Katie Benner at Fortune. If others follow suit, this would be very good news for economic recovery efforts says Sheila Bair, chair of the Federal Deposit Insurance Corporation. “Unresolved legal claims could serve as a drag on the recovery of the housing market,” Ms. Bair told The New York Times. “The healing of the housing market is essential to the recovery of the broader economy.”