Bank of America sued by DOJ
Thursday, August 08, 2013
On Aug. 6, the U.S. Department of Justice announced a civil lawsuit against Bank of America. The DOJ alleges that Bank of America defrauded buyers of mortgage-backed securities when it lied about the qualities of the home loans involved.
"Bank of America's reckless and fraudulent origination and securitization practices in the lead-up to the financial crisis caused significant losses to investors," said Anne Tompkins, the U.S. Attorney in the Western District of North Carolina. "Now, Bank of America will have to face the consequences of its actions."
According to estimations by the DOJ, Bank of America will cost investors, including Wachovia Bank and the Federal Home Loan Bank of San Francisco, up to $100 million after they purchased more than $850 million worth of supposedly high-quality mortgage-backed securities in 2008.
The allegations claim that 23 percent of the mortgages involved have failed or were delinquent.
Bank of America spokesman Lawrence Grayson said the charges will be fought and that the mortgages were "sold to sophisticated investors who had ample access to the underlying data."
Those interested in online stock trading may be interested in following this lawsuit, which is one several that have cost Bank of America billions of dollars in legal costs since the financial crisis.
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