Bank of America charged

Bank of America, which wrangled with the Nevada attorney general’s office over foreclosures, has new federal troubles.

In a new $1 billion mortgage fraud lawsuit, the U.S. Justice Department says execs at Countrywide Financial urged its employees to accept dubious loan applications and tried to conceal corporate deficits—and that “spectacularly brazen” behavior has continued since BOA acquired Countrywide in 2008. BOA’s acquisition of Countrywide earned it praise at the time, but since has drawn fire for its handling of the unit. Last week, U.S. Attorney Preet Bharara’s lawsuit charged that BOA refused to repurchase defective loans. BOA did not exactly deny the charge: “At some point, Bank of America can’t be expected to compensate every entity that claims losses that actually were caused by the economic downturn,” said spokesperson Lawrence Grayson.

Nevada Attorney General Catherine Cortez Masto refused to join in a multi-state settlement with BOA last year, charging that “Bank of America’s misconduct cuts across virtually every aspect of its operations.” She held out for a better deal for local mortgagees that was announced on Feb. 9. The Nevada settlements were highlighted in an American Civil Liberties Union report that said, “At its worst point, one in 11 Nevada homes was in some stage of foreclosure. In Las Vegas and surrounding Clark County—where a quarter of household heads are immigrants—the number is closer to one in nine. Twenty percent of Nevada’s foreclosures are among Latino borrowers, as are almost 20 percent of loans that are seriously delinquent, white borrowers account for only about 14 percent of foreclosures and 13 percent of seriously delinquent loans.”