BofA faces federal lawsuit seeking $1B in damages
Countrywide Financial and its parent, Bank of America, are targets of the latest federal lawsuit against mortgage lenders that federal investigators say pushed its agents to approve loans for customers who could not afford them.
The suit was filed Wednesday by U.S. District Attorney Preet Bharara, according to The Associated Press, and alleges that Countrywide set up incentives for its loan agents to alter loan applications, falsifying an applicant's income or employment details, to get them approved.
The suit further alleges that Bank of America, which acquired Countrywide in 2008, resisted buying back bad mortgage deals from Fannie Mae and Freddie Mac, which had purchased mortgages from Countrywide to package as securities and sell to investors.
Bank of America spokesman Lawrence Grayson told the AP that those allegations are "simply false" and that "At some point, Bank of America can't be expected to compensate every entity that claims losses that actually were caused by the economic downturn."
Bharara told the AP he is seeking over $1 billion in the suit but that more could be recovered in damages.
His office has settled lawsuits over mortgages with CitiMortgage, Flagstar Bank and Deutsche bank in the last year and a half and lawsuits against Wells Fargo and Allied Home Mortgage are pending, the AP reported.
As of June, Bank of America had 32 banking centers and 61 ATM locations in Maine.
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