Arab Today, arab today us sues bank of america for fraud over bonds
Last Updated : GMT 03:53:27
Arab Today, arab today
Arab Today, arab today

Bank blames losses on general financial downturn

US sues Bank of America for fraud over bonds

Arab Today, arab today

Arab Today, arab today US sues Bank of America for fraud over bonds

Bank of America denies it is responsible for any losses
London - Arab Today

Bank of America denies it is responsible for any losses The US government on Tuesday sued Bank of America for defrauding investors in the sale of $850 million in mortgage-backed securities ahead of the housing bust. The Department of Justice civil complaint alleges Bank of America lied to investors about the riskiness of the mortgage loans backing the securities, and intentionally avoided performing adequate due diligence on them, leading to investor losses surpassing $100 million.
Unlike some of the other sub-prime-based mortgage securities that soured during the housing bust and spawned messy litigation, the mortgages in Tuesday\'s US suit against Bank of America were sold as \"prime\" loans, meaning they purportedly had a low likelihood of falling into default.
The high rating of the loans \"signified a safe and conservative investment and justified the high prices,\" said the complaint.
However, the suit alleges the loans were far riskier than Bank of America said. It cited the bank\'s former chief executive, Ken Lewis, as having referred to one type of loan included in the securities, \"wholesale\" loans executed through third-parties, as \"toxic waste.\"
Despite the \"prime\" rating, at least 23 percent of the mortgages in the securities have defaulted or were delinquent as of June 2013, according to the complaint.
A Bank of America spokesman denied the bank was responsible for the losses.
In an emailed statement, he argued that the \"prime\" designation was justified, saying the loans in question had performed better than similar loans originated and securitized at the time by other financial institutions.
Instead, he blamed the losses on the general downturn of the market and economy, which sank into deep recession in 2008-2009.
And he said the buyers of the securities were \"sophisticated investors who had ample access to the underlying data.\"
\"We are not responsible for the housing market collapse that caused mortgage loans to default at unprecedented rates and these securities to lose value as a result,\" he said.
The government argues that more than 40 percent of the loans in one of the bonds did not meet Bank of America\'s own underwriting standards.
Many had \"glaring\" problems such as overstated income for the borrowers, or fake employment data, that made them \"wholly inconsistent\" with a prime rating, the Justice Department said.
\"As a result of this lack of due diligence, Bank of America had no basis to make many of the representations it made in the offering documents regarding the credit quality of the underlying mortgages,\" it said.
In parallel action the Securities and Exchange Commission also levelled fraud charges against the bank over the same 2008 mortgage security offerings.
Bank of America has been damaged to a greater extent by the housing bust than some other rival banks, thanks in part to an ill-timed purchase of Countrywide Financial, once the country\'s largest originator of mortgages.
The bank\'s shares closed 1.1 percent lower at $14.64 in trade Tuesday.
Source: AFP

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today us sues bank of america for fraud over bonds Arab Today, arab today us sues bank of america for fraud over bonds

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today us sues bank of america for fraud over bonds Arab Today, arab today us sues bank of america for fraud over bonds

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today EasyJet, Lufthansa among seven to bid

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today 3,250 people killed in Raqqa battle

GMT 03:49 2017 Wednesday ,18 October

3,250 people killed in Raqqa battle
Arab Today, arab today Iran's Facebook shuts down

GMT 23:50 2017 Monday ,16 October

Iran's Facebook shuts down
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today British actress becomes fifth woman

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Anoshka happy for reactions to her talk show

GMT 12:33 2017 Friday ,13 October

Anoshka happy for reactions to her talk show
Arab Today, arab today India to close colonial-era military farms

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:55 2017 Thursday ,12 October

Safaa Sultan happy for “Love School”

GMT 10:37 2017 Thursday ,12 October

Cara Delevingne accuses Weinstein

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:02 2017 Saturday ,14 October

Conservation cutbacks put Brazil's

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 12:25 2017 Saturday ,14 October

Squeeze on UK health gives advanced

GMT 07:02 2017 Sunday ,15 October

German minister sparks uproar

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday