U.S. Bank has sued Bank of America Corp alleging that a company it acquired sold defective mortgages to a $2 billion residential mortgage-backed securities trust and failed to disclose problem mortgages to the trust’s investors.
Filed in Manhattan federal court on Friday, the complaint alleges that Bank of America predecessor company First Franklin Financial Corp breached its contractual duties by selling the defective mortgages and failing to repurchase them after problems surfaced. U.S. Bank sued in its capacity as trustee for the RMBS trust.
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