The purchase of Countrywide by Bank of America was it seems one of the worst decisions it made. It is not certain if the bank bought the lender under duress or to fulfill it’s own greed. Recently, Bank of America announced that it will pay $8.5bn in the biggest settlement of claims over toxic mortgage bonds that it inherited from Countrywide.
Bank of America Settles Claims
As one of largest perpetrators of malpractice, Countrywide issued home mortgages to people who could not afford to pay back. BoA was sued by the investors who bought the securities backed by Countrywide.
It seems that it is only a matter of time before other big banks will have to settle with investors who bought their securities. Since Bank of America was responsible for almost a fifth of all the bad loans issued, it is the first one to come out and settle claims so that it can move forward keeping in mind the lessons it learned from it’s acquisitions and actions.
