Bank of America’s put-back apocalypse nightmare just got a lot closer to being a reality.
A consortium of investors in mortgage bonds securitized by Bank of America Tuesday demanded the bank buy back loansincluded in $47 billion of residential mortgage-backed securities serviced by Countrywide Financial. The notice of the demand was issued to both Bank of America, which bought Countrywide in 2008, and Bank of New York Mellon, which is the trustee for the mortgage bonds.
The initial news reports are somewhat confusing. At first glance, this seems to be about Countrywide failing to properly service mortgages. But it’s much more than that.
The consortium claims that part of Countrywide’s failure to service the loans includes its failure to buy back loans that should have been ineligible to be include in the mortgage securities pools because they didn’t live up to the promised underwriting standards.
In short, the consortium is claiming the mortgage-backed securities serviced by Countrywide contain a bunch of toxic and predatory crap that never should have been included in the pools.
This is the Bank of America put-back lawsuit everyone has been talking about for the last week.Page 1 of 2 | Next Page