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SEC Charges Bank of America with Defrauding Investors in RMBS Offering

nationalmortgageprofessional.com | August 9, 2013

By Bank Credit News Reports

The SEC charged Bank of America and two of its subsidiaries on Tuesday with defrauding investors through a residential mortgage-backed securities offering that failed to disclose key risks and misrepresented facts about the mortgages.

The SEC alleges that the bank failed to notify investors that more than 70 percent of BOAMS 2008-A—mortgages backing the offering—originated through a channel of mortgage brokers unaffiliated with the bank and its entities. BOAMS 2008-A was sold as a “prime” securitization appropriate for most investors.

BofA was allegedly aware that the loans, described by the former bank CEO as “toxic waste,” presented risks of severe delinquency, early default, underwriting defects and prepayment, which directly impact the returns to investors. The bank selectively disclosed the percentage of loans to a limited group of investors and never filed it publicly as required by federal law.

“In its own words, Bank of America ‘shifted the risk’ of loss from its own books to unsuspecting investors, and then ignored its responsibility to make a full and accurate disclosure to all investors equally,” George S. Canellos, the co-director of the SEC’s Division of Enforcement, said.  “This is one in a long line of RMBS-related enforcement actions brought by the SEC to hold entities accountable for wrongdoing connected to the financial crisis.”


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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