03-24-2018  10:39 pm      •     
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MJF Grants Help Fund Music in Montavilla Schools

A total of [scripts/minicatblogs/front-page.php],500 will fund projects at four neighborhood public schools ...

Prof. Timothy Snyder to Speak at PSU April 25

Snyder will speak on “Resisting Tyranny: Lessons from the European 20th Century” for 11th Annual Cogan Lecture ...

County Creates New Fund to Diversify Construction Trades

The Construction Diversity and Equity Fund will draw 1% from county remodeling projects with budgets above 0,000 ...



Remember (The Truth) About The Alamo

In 1829, the Afro-Mexican president of Mexico outlawed slavery at a time when the southern U.S. was deeply in thrall to slave labor ...

Black Women You Should Know

Julianne Malveaux on the next generation of Black women leaders ...

Access to Safe, Decent and Affordable Housing Threatened

Trump era rollbacks in lending regulations could make life harder for Blacks in the housing market ...

Civility on Social Media Is Dead

Bill Fletcher discusses the lack of penalties for obnoxious behavior on social media ...



By James O\'Toole

Bank of America is back in the government's crosshairs.

The Department of Justice announced a civil lawsuit on Tuesday alleging that Bank of America defrauded buyers of mortgage-backed securities by lying about the quality of the home loans involved. The Securities and Exchange Commission also announced a parallel case.

Mortgage-backed securities are bonds created by packaging together and selling groups of residential mortgage loans. These securities played a key role in the 2008 financial crisis, failing in huge numbers as the housing market collapsed.

"Bank of America's reckless and fraudulent origination and securitization practices in the lead-up to the financial crisis caused significant losses to investors," Anne Tompkins, the U.S. Attorney in the Western District of North Carolina, said in a statement. "Now, Bank of America will have to face the consequences of its actions"

The allegations center on a specific offering from 2008 in which investors including Wachovia Bank and the Federal Home Loan Bank of San Francisco purchased over $850 million worth of supposedly high-quality mortgage-backed securities from Bank of America.

The DOJ estimates that investors will ultimately lose more than $100 million on the offering. As of June, the Justice Department said, 23 percent of the mortgages involved had failed or were delinquent.

Bank spokesman Lawrence Grayson said Tuesday that the mortgages in question were "sold to sophisticated investors who had ample access to the underlying data," and that Bank of America would fight the charges.

"The loans in this pool performed better than loans with similar characteristics originated and securitized at the same time by other financial institutions," Grayson said.

"We are not responsible for the housing market collapse that caused mortgage loans to default at unprecedented rates, and these securities to lose value as a result."

Bank of America revealed the possibility of charges in its quarterly report last week. The firm has been forced to pay billions of dollars in legal costs related to the housing bust and the financial crisis over the past few years.

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