Bank of America affiliates including Merrill Lynch and Banc of Amerca Mortgages Securities are accused of lying to investors about the relative riskiness of the mortgage loans in an$850 million mortgage securitization assembled during the housing boom. The pool of mortgages included “a disproportionate amount of risky mortgages originated through third-party mortgage brokers,” the Department of Justice said in announcing a civil suit against the lender.
Bank of America says it will demonstrate that the loans “were prime mortgages sold to sophisticated investors who had ample access to the underlying data,” and that the loans in the pool “performed better than loans with similar characteristics originated and securitized at the same time by other financial institutions.” Source: justice.gov.
