Bank of America may face civil charges from DOJAugust 1, 2013 @ 3:43 pm
(AP) - Bank of America may be facing civil charges over mortgage backed securities and other mortgage-related matters.
The bank said in a regulatory filing Thursday that the Department of Justice told the company that it intends to file civil charges related to one or two jumbo-prime securitizations. The SEC is also considering filing civil charges against Merrill Lynch tied to a collateralized debt obligation investigation.
Banks used to regularly package mortgages into bundles known as CDOs, or collateralized debt obligations, and then sell them off in pieces to investors. Many went sour when the housing market collapsed.
Additionally, the filing said that the New York Attorney General's office intends to file action against Merrill Lynch, following an investigation of some of its residential mortgage backed securities.
Bank of America said that it is fully cooperating with the investigations. It also said that it has been in active discussions with each government entity in to explain why the threatened civil charges are not appropriate.
Company spokesman Lawrence Grayson said that the Bank of America has "made progress resolving many issues and will continue to work to address any outstanding matters."
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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