"The battle is intensifying to hold Bank of America accountable for faulty foreclosures that may have scammed taxpayers out of billions is intensifying on a state level. In a lawsuit filed by the state of Arizona against the nation's largest lender, a federal auditor says that Bank of America "significantly hindered" a review of its foreclosure practices on loans insured by the Federal Housing Administration".
"In recent weeks, New York Attorney General Eric Schneiderman quietly launched a new probe into the bank's mortgage practices, especially the packaging and sale of loans to investors. According to the Huffington Post's Shahien Nasiripour, this investigation bears serious consequences for Bank of America as well as other top lenders:
The inquiry could prove explosive: Wall Street's great mortgage securitization machine took millions of home loans and bundled them into securities for sale to investors. If the legal steps that guide securitization -- like taking mortgage documents from one party to another, a critical step under New York law -- were not undertaken, then the investors who bought the bundled loans could force the companies to buy them back, compelling them to eat enormous losses.
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