Wednesday, August 31, 2011

U.S. Bancorp sues Bank of America over bad Countrywide mortgages.

The Associated Press
NEW YORK - The lawsuits against Bank of America are piling up.
The latest comes from U.S. Bancorp, which wants Bank of America Corp. to repurchase poorly written mortgages sold by Countrywide Financial in 2005.
Bank of America bought Countrywide Financial Corp. in 2008.
The lawsuit, which was filed in New York on Monday, claims Countrywide sold U.S. Bancorp a pool of more than 4,000 loans originally valued at $1.75 billion. U.S. Bancorp claims Countrywide ignored its own mortgage underwriting guidelines when issuing those loans.
According to the complaint, Countrywide agreed to repurchase loans within 90 days if any of the statements made in the loan contract wound up being untrue. Those statements included an assertion that the loans complied with the bank's underwriting guidelines.
U.S. Bancorp says Countrywide's loans began to "become delinquent and default at a startling rate," soon after it sold the loans. U.S. Bancorp has asked the court to ask Countrywide to repurchase either just the defective loans or all of the loans in the pool.
The nation's largest bank is facing several other lawsuits. On Aug. 8, American International Group Inc. sued the bank for more than $10 billion, claiming Charlotte-based Bank of America deceived the insurer by selling it faulty mortgage investments.

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