|February 5, 2013
Source: All Gov.
Bank of America has been accused of violating the terms of a multi-billion dollar mortgage settlement before it has even been approved.
Two years ago, BofA reached an $8.5 billion settlement to resolve claims over mortgage abuses by Countrywide Financial, which it acquired during the 2008 financial crisis.
That settlement has yet to be approved by a federal judge, and now three Federal Home Loan Banks and Triaxx, an investment vehicle that bought mortgage securities, have filed court documents claiming the deal, among other things, has shortchanged thousands of investors.
In addition, the documents say BofA has continued questionable loan-related practices and put its own interests ahead of investors while modifying troubled mortgages.
The bank also failed to purchase bad mortgages in full once it had lowered the payments and principal on the loan—which is reportedly a violation of its agreements with investors who bought the securities that held the mortgages.
“The filing raises new questions about whether a judge will approve the settlement,” The New York Times wrote. “If it is denied, the bank would face steeper legal obligations.”
To Learn More:
Fresh Questions Over a Bank of America Settlement (by Gretchen Morgenson, New York Times)
Bank of America Gets Away with Paying $10.3 Billion to Settle Foreclosure Fraud Case with Fannie Mae (by Noel Brinkerhoff, AllGov)
U.S. Finally Sues Bank of America for Mortgage Fraud (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Bank of America Smacked with Foreclosure Fraud Lawsuits (by Matt Bewig, AllGov)