The Bank of America Corp., the second-largest in the U.S., said in a securities filing with the Securities and Exchange Commission that it was being investigated by the state of New York over its buyout, securitization and underwriting of home loans.
BofA has been aiming to put its struggles related to mortgages behind it after it incurred over $40 billion in losses from its home loan business since the economic downturn. Most of such losses came for its acquisition of subprime mortgage lender Countrywide Finance in 2008.
In its annual 10-k filing with SEC, BofA said that it is cooperating with the investigation but revealed that it is expecting $3.1 billion in legal losses beyond the amount for which it has to reserve.
The housing loan market saw collapse because of defective loans purposely created and packaged for sale to investors.
BofA and its former chief executive Ken Lewis also faced a lawsuit filed by then-New York attorney general Andrew Cuomo in 2010 when it acquired Merrill Lynch at the height of financial crisis.
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