Aug 1 The U.S. Justice Department intends to
file civil charges against Bank of America Corp linked
to a sale of one or two mortgage bonds, the bank said on
Thursday in a regulatory filing.
The Securities and Exchange Commission may also file civil
charges for one of those bonds, the bank said. Both cases relate
to mortgages that were too big to be guaranteed by Fannie Mae or
Freddie Mac, but were packaged into "jumbo" mortgage bonds.
The filing did not specify what the cases were about. A Bank
of America spokesman did not immediately return a call seeking
The new charges, disclosed in a quarterly filing, underscore
the extent of the second-largest U.S. bank's hangover from the
financial crisis. Bank of America has announced a series of
settlements with investors and the U.S. government, including an
$8.5 billion settlement with investors in mortgage-backed
securities and a $1.6 billion deal with bond insurer MBIA Inc
Staff at the New York Attorney General's office said they
intend to recommend filing an action against the bank's Merrill
Lynch unit from their mortgage bond investigation, the bank said
in the filing.
The SEC is also considering civil charges against Merrill
Lynch linked to repackaged debt securities known as
collateralized debt obligations, the filing said.
Many of Bank of America's headaches, including the $8.5
billion settlement, arise from its disastrous 2008 acquisition
of Countrywide Financial Corp, a mortgage lender it bought at
the height of the housing crisis for $2.5 billion. Analysts
estimate the bank has lost more than $40 billion from bad loans,
litigation and settlements linked to the purchase.