Bank of America sued for $1bn over toxic loans

clock

US investment banking giant Bank of America has been hit with a $1bn (£624m) lawsuit from the government over allegations it fraudulently issued "toxic" loans.

A statement from the US Attorney's office alleged mortgage provider Countrywide - which is owned by BoA - labelled faulty mortgages as high quality and sold them to state-controlled mortgage lenders Fannie Mae and Freddie Mac, leading to multi-billion dollar losses, the Telegraph reports. This activity by Countrywide has been described as a "hustle" and "spectacularly brazen in scope" by Manhattan US Attorney Preet Bharara. "Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill," Bharara said. "As described, Countrywide and Bank of America s...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Equities

Partner Insight: Playing Defence with Dividends

Partner Insight: Playing Defence with Dividends

Today’s equity markets are characterised by bouts of volatility, spurred by geopolitical tensions and macroeconomic uncertainties, mainly due to the start-stop nature of the US-initiated global trade war. This has investors seeking strategies that offer...

Reineke Davidsz and Najib Nakad @ VLK Investment Management
clock 10 July 2025 • 3 min read
Stock pickers urge caution over rapid return to US equities

Stock pickers urge caution over rapid return to US equities

Quilter and Fidelity

Linus Uhlig
clock 01 July 2025 • 1 min read
Deep Dive: US equities may not have peaked but do require greater selectivity

Deep Dive: US equities may not have peaked but do require greater selectivity

Amid equity rebalancing

Linus Uhlig
clock 13 June 2025 • 4 min read
Trustpilot