Civil Charges against Bank of America from US

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Civil Charges against Bank of America from US

#1 Postby Biyatris » Fri Aug 02, 2013 12:28 pm

Bank of America is facing new legal troubles from US authorities.It disclosed on Thursday, including potential civil charges from the Department of Justice over securitisations of mortgages lent to wealthy borrowers.The bank has settled law suits over mortgages in the past year, helping to improve investor confidence.Banks used to regularly package mortgages into bundles known as CDOs, or collateralized debt obligations, and then sell them off in pieces to investors. The bank said in a regulatory filing that the Department of Justice told the company that it intends to file civil charges related to one or two jumbo-prime securitizations. Jumbo refers to loans above a threshold, currently $417,000 for most of the countries and $625,500 for the more expensive areas. The fact that “jumbo prime” mortgages are at the centre of the latest case is also unusual. Most litigation over the mortgage crisis has been around “subprime” mortgages to poorer borrowers. :(

Company spokesman Lawrence Grayson said that it is fully cooperating with the investigations and has been in active discussions with each government entity in to explain why the threatened civil charges are not appropriate.They have also made progress resolving many issues and will continue to work to address any outstanding matters. :mrgreen:

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