Bank of America has long rued its decision in 2008 to acquire Countrywide Financial, the subprime mortgage giant. To date, the bank has set aside some $40 billion to settle claims of mortgage misconduct that occurred before it acquired the freewheeling lender.
Enlarge This Image
Charles Krupa/Associated Press
A Bank of America branch in Boston. The bank has set aside billions of dollars for claims of mortgage misconduct.
Add to Portfolio
Bank of America Corporation
Go to your Portfolio »
Enlarge This Image
Win Mcnamee/Getty Images
Brian T. Moynihan, Bank of America’s chief executive.
Share your thoughts.
Post a Comment »
Read All Comments (29) »
It has been a regular refrain at Bank of America. Last month, Brian T. Moynihan, the bank’s chief executive, told Bloomberg television at the World Economic Forum in Davos, Switzerland, that carrying Countrywide was like climbing a mountain with “a 250-pound backpack.”
But according to new documents filed in state Supreme Court in Manhattan late on Friday, questionable practices by the bank’s loan servicing unit have continued well after the Countrywide acquisition; they paint a picture of a bank that continued to put its own interests ahead of investors as it modified troubled mortgages.
The documents were submitted by three Federal Home Loan Banks, in Boston, Chicago and Indianapolis, and Triaxx, an investment vehicle that bought mortgage securities. They contend that a proposed $8.5 billion settlement that Bank of America struck in 2011 to resolve claims over Countrywide’s mortgage abuses is far too low and shortchanges thousands of ordinary investors.
The filing raises new questions about whether a judge will approve the settlement. If it is denied, the bank would face steeper legal obligations.
Lawrence Grayson, a spokesman for Bank of America, denied the bank was putting its own interests...