BofA's Lax MBS Standards Led To Investor Losses: Suit

Law360, New York (September 20, 2011, 9:51 PM EDT) -- A Bank of America Corp. shareholder launched a suit in New York state court Monday accusing the bank and its executives of failing to conduct due diligence in securitizing mortgage loans, leading to substantial losses.

Plaintiff David Shaev Profit Sharing Plan says that in order to compete in the mortgage-backed securities market, BofA included loans in securitizations that third-party firms had recommended for exclusion.

One such third-party firm, Clayton Holdings LLC, says that it rejected 30 percent of the mortgage loans BofA submitted for review between...
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