The Justice Department filed a lawsuit against Bank of America on Tuesday claiming that the Bank by understating the risks of mortgages backing of about 850 million in securities to investors.
The latest lawsuit is another financial burden for the Bank, which is facing a number of mortgage-related losses and litigation since the collapse of the housing market in the United States. Most legal problems result from the acquisition of subprime lender Countrywide Financial Bank of the year 2008 in the United States.
A new claim is associated with Bank of America own home mortgage operations, rather than those extended for Countrywide Financial. Laons were presented as the prime jumbo mortgages in the year 2007 as they included loans of more than $417000 for a single home or mortgage loans.
The Justice Department in the lawsuit said that bank mortgage operations were inappropriate business practices adopted by Wall Street firms before the financial crisis of 2008. He said the Bank pushed employees to shoot down through the mortgage appraisals to obtain additional profit. Instructions to fly through standards came from the Bank's management, according to the lawsuit.
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