By Karen Freifeld and Aruna Viswanatha NEW YORK/WASHINGTON (Reuters) - Attorney General Eric Holder has formally refused to meet with Bank of America Corp Chief Executive Brian Moynihan to hammer out a multibillion-dollar deal, as talks to resolve probes into shoddy mortgage securities sold by the bank and its units remain at a standstill, according to people familiar with the matter. In a letter sent in the second half of June, Holder told Moynihan that the parties remained too far apart for a meeting to be productive, one source said. No negotiations between the second largest U.S. bank and the U.S. Department of Justice have taken place since the second week in June, several people said. The attorney general said in the letter he had been following the talks and continued to get updates but was leaving the negotiations to the Justice Department's No. 3 official, Tony West, the one source said. Reuters reported last month that Bank of America representatives had sought a meeting between Moynihan and Holder to resolve government investigations into potential misconduct by the bank and its units in packaging mortgages, primarily during the run-up to the financial crisis. Bank of America has discussed paying about $12 billion to settle the probes, including a portion to help struggling homeowners, while the Justice Department had suggested a $17 billion settlement, sources said. The talks are being driven by an investigation into the bank's Merrill Lynch unit but also include the bank itself and its Countrywide unit, sources said. Government negotiators declined to credit the bank with $6.3 billion Bank of America agreed to pay the Federal Housing Finance Agency in March over misrepresentations in mortgage-backed securities purchased by Fannie Mae and Freddie Mac between 2005 and 2007. The credit would essentially close the gap, a second source said. While talks with Bank of America have not progressed in about a month, Justice Department lawyers have been occupied with resolving a similar case against Citigroup, sources said, which may be settled as early as next week. An announcement on Citigroup could pave the way for renewed negotiations with Bank of America, sources said. The Justice Department had threatened both banks with lawsuits. Citigroup is now likely to pay around $7 billion in a settlement, Reuters reported on Tuesday. Bank of America spokesman Lawrence Grayson and Justice Department spokeswoman Emily Pierce declined to comment. Moynihan's request was similar to one from JPMorgan CEO Jamie Dimon, who met with Holder in September as his bank negotiated a $13 billion accord to put its mortgage securities liabilities behind it. After the JPMorgan deal was announced in November, Holder said he planned to use it as a template for other banks. The $13 billion included $4 billion JPMorgan paid to the FHFA over the bank's sale of mortgage securities. The Justice Department has prioritized its pursuit of financial misconduct. Holder has expressed a desire to wrap up several major investigations this year. (Reporting by Karen Freifeld in New York and Aruna Viswanatha in Washington; Editing by Karey Van Hall and Jonathan Oatis)