?Bank of America Accused of Dumping $855 MM in Toxic Assets

[Corey Dutton]

Once again, Bank of America continues to earn its trademark as the worst bank in America. The SEC is now conducting an investigation of Bank of America and two of its subsidiaries for defrauding investors in 2008 through the sale of $855 MM in toxic, residential mortgage-back securities. In 2008, B of A conducted the said offering called “BOAMS 2008-A” without properly disclosing to investors that many of the mortgages that were backing the offering were wholesale channel loans. These were high risk loans described by B of A’s former CEO as “toxic waste.”

As per the SEC complaint, “Bank of America never disclosed this material information to all investors and never filed it publicly as required under the federal securities laws.” The Department of Justice filed a parallel action this week against B of A as well and alleges that these loans were “…riddled with ineligible appraisals, unsupported statements of income, misrepresentations regarding owner occupancy, and evidence of mortgage fraud.”

U.S. Attorney Tompkins was quoted Tuesday as saying, “Bank of America’s reckless and fraudulent origination and securitization practices in the lead-up to the financial crisis caused significant losses to investors…now, Bank of America will have to face the consequences of its actions.” (Read this article on the SEC investigation here: http://www.mpamag.com/mortgage-originator/sec-points-finger-at-brokers-in-bofa-suit-15586.aspx

In June, whistleblowers came forward and accused B of A of unscrupulous and downright illegal foreclosure practices where B of A bank officials were offering rewards to front line employees for meeting foreclosure quotas. (Read the whistleblower article here: http://www.huffingtonpost.com/ray-brescia/bank-of-america-whistleblowers_b_3464583.html

Despite how well you may be treated as a Bank of America banking customer, this is a pure example of bad business for investors and for America. Fraud, lies, deceit, are just some of B of A’s well earned trademarks.