Nov 7 (Reuters) - Bank of America Corp is still trying to get a penalty waiver from the U.S. Securities and Exchange Commission over a $16.7 billion settlement involving bad mortgages, Bloomberg reported on Friday, citing two people familiar with the matter.

BofA reached a record $16.65 billion settlement with the U.S. government to settle charges it misled investors into buying toxic mortgage-backed securities. Securitized mortgages were a major cause of the 2007-2009 financial crisis.

According to Bloomberg, BofA's lawyer, Gary Lynch, asked that additional sanctions tied to the settlement be waived. He argued the bank it is being unfairly treated compared with other firms that were given waivers in similar cases.

The disagreement is over a penalty that could prevent BofA from selling investments in hedge funds, Bloomberg said.

A vote on the waivers scheduled for last week was scrapped at the last minute, Bloomberg reported, citing one of the people. The SEC's staff have recommended that the commissioners approve the relief, it said.

BofA could not be reached for comment outside regular U.S. working hours.

(Reporting by Anjali Rao Koppala in Bangalore. Editing by Andre Grenon)