Bank of America (BAC), Trust Banks Tied Up in New Mortgage Securitization Probe
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Shares of Bank of America Corporation (NYSE: BAC) are lower again Monday following reports the company is being investigated by New York Attorney General Eric Schneiderman regarding mortgage securitization practices.
Schneiderman is working in conjunction with Delaware's Attorney General Joseph Biden III and has requested information from trust banks Bank of New York Mellon (NYSE: BK) and Deutsche Bank (NYSE: DB), the New York Time reported.
While the New York Times article did not mention Bank of America, the Huffington Post is reporting BofA is one of the ultimate targets.
The investigation will focus on whether mortgage company's and Wall Street firms took the necessary steps when creating mortgage-backed securities, which bundled a number of residential mortgages together and then sold them to investors.
Trustees could be found liable of breaching their duties to investors if it is proved these trustees did not follow rules set up in the securities' prospectus.
Shares of Bank of America are down 0.6 percent to $10.73 in early trading Monday.
Schneiderman is working in conjunction with Delaware's Attorney General Joseph Biden III and has requested information from trust banks Bank of New York Mellon (NYSE: BK) and Deutsche Bank (NYSE: DB), the New York Time reported.
While the New York Times article did not mention Bank of America, the Huffington Post is reporting BofA is one of the ultimate targets.
The investigation will focus on whether mortgage company's and Wall Street firms took the necessary steps when creating mortgage-backed securities, which bundled a number of residential mortgages together and then sold them to investors.
Trustees could be found liable of breaching their duties to investors if it is proved these trustees did not follow rules set up in the securities' prospectus.
Shares of Bank of America are down 0.6 percent to $10.73 in early trading Monday.
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