Sociable

Tuesday, January 25, 2011

Bank of America's Countrywide Accused in Suit of `Massive Fraud'

More fallout from foreclosure-gate.  I have reduced reporting on it, because there was just so much news.  Basically, the banks are in trouble for originating bad loans and then selling these to investors as good paper.  Investors are now fighting back with BofA paying out the first major settlement.  However, this is far from over for BofA
The investors claim they bought hundreds of millions of dollars of Countrywide mortgage-backed securities from 2005 to 2007 because they wanted conservative, low-risk investments. They said they relied on term sheets, prospectuses and other materials provided by the firm that were recklessly or knowingly false.
“Countrywide was an enterprise driven by only one purpose -- to originate and securitize as many mortgage loans as possible into MBS to generate profits for the Countrywide defendants without regard to the investors that relied on the critical, false information provided to them with respect to the related certificates,” according to the complaint.
Read it all

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