August 2, 2013

Bank of America faces civil action

The Associated Press

Bank of America may face civil charges over mortgage-backed securities and other mortgage-related matters.

The bank said in a filing Thursday that the Department of Justice told the company that it intends to file civil charges related to one or two jumbo-prime securitizations. The SEC is considering filing civil charges against Merrill Lynch tied to a collateralized debt obligation investigation. And the New York Attorney General's office intends to file action against Merrill Lynch, the filing said.

Banks used to regularly package mortgages into bundles known as CDOs, or collateralized debt obligations, and then sell them off in pieces to investors. Many went sour when the housing market collapsed.

 

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