We have written in prior issues about the large number of lawsuits that have been filed against Bank of America Corp. and it doesn’t appear its problems are over. Currently, there is much more to report. A suit filed by U.S. Bancorp against Bank of America is seeking to have the bank to repurchase poorly-written mortgages sold by Countrywide Financial in 2005. As we have reported, Bank of America bought Countrywide Financial Corp. in 2008. The latest lawsuit, filed in New York, claims Countrywide sold U.S. Bancorp a pool of over 4,000 loans originally valued at $1.75 billion. U.S. Bancorp claims that Countrywide ignored its own mortgage underwriting guidelines when issuing those loans.
According to the lawsuit, Countrywide agreed to repurchase loans within 90 days if any of the statements made in the loan contract wound up being untrue. Those statements included an assertion that the loans complied with the bank’s underwriting guidelines. U.S. Bancorp says Countrywide’s loans began to “become delinquent and default at a startling rate,” soon after it sold the loans. U.S. Bancorp has asked the court to ask Countrywide to repurchase either just the defective loans or all of the loans in the pool.
A U.S. Bancorp spokesman, Thomas Joyce, said the bank filed the lawsuit as a trustee on behalf of several investors who bought the loans, but he wouldn’t identify the number of investors the bank represents. As reported, the nation’s largest bank is facing several other lawsuits. In August, American International Group Inc. sued the bank for more than $10 billion, claiming Bank of America deceived the insurer by selling it faulty mortgage investments. Bank of America has already paid a total of $12.7 billion this year to settle similar claims.
Source: WSFA TV News
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