U.S. sues Bank of America for mortgage fraud

The filing is the latest in recent series of government civil suits against Wall Street giants

By Natasha Lennard

Published October 24, 2012 4:55PM (EDT)


The Department of Justice sued Bank of America for mortgage fraud Wednesday, in the latest in a series of civil fraud suits filed by the U.S. government against major banks. According to a breaking Reuters report, the complaint filed in Manhattan accuses the banking giant of "deliberately generating and then selling thousands of toxic home loans that later defaulted to Fannie Mae and Freddie Mac."

According to U.S. Attorney Preet Bharara, these loan sales resulted in "countless" foreclosures and over $1 billion in losses. As Salon noted in early October, the U.S. filed a fraud complaint against Wells Fargo and, in September, a joint federal and state task force sued JPMorgan Chase for deceptive practices related to the sale of mortgage-backed securities. All of these suits, including today's BofA filing, are civil and may result in monetary penalties for banks, but no jail time for bankers.

As I wrote following the Wells Fargo complaint filing, "although many welcome the government going after Wall Street, critical pundits have raised questions about the timing, noting that the Obama administration might be projecting a tough-on-banks stance with the election countdown in mind."

Natasha Lennard

Natasha Lennard is an assistant news editor at Salon, covering non-electoral politics, general news and rabble-rousing. Follow her on Twitter @natashalennard, email nlennard@salon.com.

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Related Topics ------------------------------------------

Bank Of America Civil Suit Financial Crisis Foreclosures Fraud Mortgage Crisis Mortgage Fraud Wall Street