On August 6, 2013, the Securities and Exchange Commission filed a civil injunctive action against Bank of America, N.A. (BANA), Banc of America Mortgage Securities, Inc. (BOAMS), and Merrill Lynch, Pierce, Fenner & Smith, Inc. f/k/a Banc of America Securities LLC (BAS). The SEC alleges that the Bank of America Entities made material misrepresentations and omissions in connection with the sale of residential mortgage-backed securities known as BOAMS 2008-A.
Specifically, the SEC complaint alleges that the Bank of America Entities failed to disclose the disproportionate concentration of wholesale loans (72% by unpaid principal balance) underlying BOAMS 2008-A as compared to prior BOAMS offerings. The SEC complaint also alleges that the Bank of America Entities failed to disclose known risks associated with the high concentration of wholesale loans in BOAMS 2008-A including higher likelihood that the loans would be subject to material underwriting errors, become severely delinquent, fail early in the life of the loan, or prepay. Finally, the SEC complaint alleges that the Bank of America Entities made material misrepresentations and omissions in its public filings and in the loan tapes it provided to investors and rating agencies that the loans in BOAMS 2008-A complied with BANA’s underwriting standards when a material amount did not.
The foregoing information, which is publicly available on the SEC’s website, has been provided by The White Law Group.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group visit http://www.whitesecuritieslaw.com.
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