(Bloomberg) -- $Bank of America Corp(BAC-N)$. has agreed to buy a $9 billion portfolio of residential mortgage loans from Toronto-Dominion Bank, as the Canadian lender looks to shed certain holdings to meet a new regulatory cap on its assets, according to people with knowledge of the matter. 

Bids were due last week for the portfolio of so-called jumbo mortgages from US homeowners with relatively high credit scores, as previously reported by Bloomberg. TD has been adjusting its balance sheet lately to comply with a roughly $434 billion cap on its US retail banking assets, imposed last year by regulators as part of a guilty plea for failing to prevent money laundering by drug cartels and other criminals. 

The bank’s possible jumbo mortgage sale to BofA is not yet finalized, with talks still ongoing, said the people familiar, who asked not to be identified discussing a private matter.

Jumbo mortgages are loans so large they aren’t allowed in government-supported programs, as they exceed the size limit of conventional loans bought by government-backed entities like Fannie Mae and Freddie Mac. Borrowers taking out those loans tend to be wealthy and have prime credit ratings.  

US banks’ appetite for mortgages including jumbo loans could increase now that anticipated regulations, known as Basel III Endgame and which would have forced lenders to shore up more capital against residential mortgage loans, are likely to be watered down or scrapped. 

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