Fresh off an August lawsuit over an $850 million mortgage bond, Bank of America is set to face three more Justice Department civil probes over risky mortgage-backed securities packaged by subprime lender Countrywide Financial, which they purchased in 2008.
U.S. attorneys’ offices in Georgia and California are looking at potential violations by Countrywide, sources with direct knowledge of the investigation told Bloomberg News. U.S. attorneys in New Jersey are examining deals done by Merrill Lynch, which Bank of America acquired in 2009, the sources told Bloomberg News.
Bill Halldin, a spokesperson for Bank of America, declined to comment to Bloomberg News. Spokespeople for the three U.S. attorneys offices and the Justice Department declined to comment or were not immediately available.
If the claims are brought, Bank of America would join JPMorgan Chase in facing the DOJ’s demands that it resolve liabilities stemming from its acquisitions of former rivals during the financial crisis. [Bloomberg News] – Hiten Samtani