Bank of America Sued by U.S. Over Mortgage Loan Sales
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Bank of America Corp., the second-biggest U.S. lender by assets, was accused by the federal government in a $1 billion fraud lawsuit of selling defective residential mortgage loans to Fannie Mae and Freddie Mac that later defaulted.
The U.S. Justice Department filed the complaint yesterday in Manhattan federal court, claiming the bank and its Countrywide Financial unit generated thousands of defective loans and sold them to the two home-mortgage finance companies now under government control.