October 24, 2012 / 4:25 PM / in 5 years

US sued Bank of America over alleged mortgage fraud

Oct 24 (Reuters) - The United States on Wednesday filed a civil mortgage fraud lawsuit against Bank of America Corp , accusing it of deliberately generating and then selling thousands of toxic home loans that later defaulted to Fannie Mae and Freddie Mac.

U.S. Attorney Preet Bharara in Manhattan said in a statement that the sales had resulted in more than $1 billion of losses and “countless” foreclosures. He said the case is the U.S. Department of Justice’s first civil fraud lawsuit over mortgage loans sold to Fannie Mae or Freddie Mac.

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