FINANCIAL TIMES: The US government sued Bank of America on Tuesday, alleging it committed fraud by packing mortgage-backed securities with loans that it knew to be “toxic waste”.
The Department of Justice and the Securities and Exchange Commission filed separate lawsuits claiming that BofA understated the risk in $850m of mortgage-backed securities it sold in 2008…
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Another employee said: “I combed through these loans one by one. None of these loans are suitable for a prime jumbo A-Credit securitisation.” They included too many red flags such as high loan-to-value ratios, the employee said… (more)
