Federal prosecutors wants a judge to order Bank of America to pay US$2.1 billion ($2.6 billion) in penalties for knowingly selling bad home loans, more than double the amount the government had sought in the case.
In documents filed on Wednesday, the government said it wants Bank of America to make a payment based on its total revenue from the fraud instead of the profit it made.
The US had wanted Bank of America to pay about US$864 million ($1060 million) over losses it incurred after it bought thousands of home loans made by Countrywide Financial in 2007 and 2008 during the housing boom.
A jury found Bank of America liable for knowingly selling the bad loans to mortgage giants Fannie Mae and Freddie Mac. The jury also returned the verdict against Countrywide and a former executive, Rebecca Mairone.
US attorney Preet Bharara made the request for the penalty - saying it is the maximum allowed - in documents filed on Wednesday with the US District Court in Manhattan.
Bank of America spokesman Lawrence Grayson said the government is seeking too much money and has conceded that the losses from the loans were less than US$864m.
"This claim bears no relation to a limited Countrywide program that lasted several months and ended before Bank of America's acquisition of the company," he said.
"We will present the relevant facts in a detailed response soon."
Countrywide, once the biggest mortgage lender in the US, played a major role in the collapse of the housing market because of its heavy reliance on subprime mortgages.
Facing serious financial challenges, it was acquired by Bank of America in 2008 in an all-stock deal valued at about US$4b.
Fannie Mae and Freddie Mac received about US$187b in aid from taxpayers when the government rescued them during the financial crisis, after they incurred massive losses on risky mortgages.
The two companies don't directly make loans to borrowers. They buy mortgages from lenders, package them as bonds, guarantee them against default and sell them to investors. That helps make loans available.
Grayson said Bank of America has until February 26 to respond to the latest filing, and oral arguments are scheduled for March 13.
Shares of Charlotte, North Carolina-based Bank of America rose 18 cents to US$16.86 ($20.89) in midday trading.