DOJ slams BofA with $850M RMBS suit

DOJ slams BofA with $850M RMBS suit

The Department of Justice slapped Bank of America and numerous subsidiaries with an $850 million lawsuit Tuesday, alleging the firms lied to investors about the quality of mortgages backing residential mortgage-backed securities sold off to investors.

The DOJ suit, which was worked in tandem with the U.S. Attorney for the Western District of North Carolina, accuses BofA (BAC) and several of its affiliates of intentionally making false statements, failing to perform due diligence on loans and packing securitization deals with a “disproportionate amount of risky mortgages originated through third party mortgage brokers.”

Attorney General Holder says the suit stems from the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force RMBS Working Group. TheSecurities and Exchange Commission filed similar civil charges in a Charlotte, N.C., federal court.

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