About Us  |   Contact Us  |   Register  | Login  |   

Follow HedgeWorld on Twitter HedgeWorld on LinkedIn






HEDGEWORLD NEWS
Search the News
Advanced News Search
HedgeWorld News by Region
United States / Americas
Europe
Asia / Australia
International
HedgeWorld News Sections
Managed Futures & Derivatives
Daily News
Regulatory/Legal
Strategies/Analysis
Technology
Opinion
People
Indexes
Other News Features
Most Popular
LexisNexis Headlines
Reuters Headlines
The HedgeWorld Blog
Alternative Advantage Daily Newsletter
RSS Service
Sign Up For Email News Alerts
Reprints



Bank of America expects civil charges over mortgage bonds
08/01/2013 Email this story  |  Printable Version

Aug 1 (Reuters) - The U.S. Justice Department intends to file civil charges against Bank of America Corp linked to a sale of one or two mortgage bonds, the bank said on Thursday in a regulatory filing.

The Securities and Exchange Commission may also file civil charges for one of those bonds, the bank said. Both cases relate to mortgages that were too big to be guaranteed by Fannie Mae or Freddie Mac, but were packaged into "jumbo" mortgage bonds.

The filing did not specify what the cases were about. A Bank of America spokesman did not immediately return a call seeking comment.

The new charges, disclosed in a quarterly filing, underscore the extent of the second-largest U.S. bank's hangover from the financial crisis. Bank of America has announced a series of settlements with investors and the U.S. government, including an $8.5 billion settlement with investors in mortgage-backed securities and a $1.6 billion deal with bond insurer MBIA Inc .

Staff at the New York Attorney General's office said they intend to recommend filing an action against the bank's Merrill Lynch unit from their mortgage bond investigation, the bank said in the filing.

The SEC is also considering civil charges against Merrill Lynch linked to repackaged debt securities known as collateralized debt obligations, the filing said.

Many of Bank of America's headaches, including the $8.5 billion settlement, arise from its disastrous 2008 acquisition of Countrywide Financial Corp, a mortgage lender it bought at the height of the housing crisis for $2.5 billion. Analysts estimate the bank has lost more than $40 billion from bad loans, litigation and settlements linked to the purchase.


Email This Story to a Friend   |   Display Printable Version of This Story

Story Copyright © 1999-2014 Reuters HedgeWorld All rights reserved.

HedgeWorld News is sponsored by:






Lipper    Privacy   User Policy  Legal Disclosure Copyright/DMCA  Site Map    FAQ    Glossary  Thomson Reuters for Hedge Funds
All rights reserved. Users may download and print extracts of content from this website for their own personal and non-commercial use only. Republication or redistribution of HedgeWorld content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. HedgeWorld is a registered trademark of Thomson Reuters.