Tuesday, June 14, 2011

Fed auditor: Bank of America 'significantly hindered' government probe

Posted By on Tue, Jun 14, 2011 at 11:28 AM

The bad news keeps piling up for Bank of America’s foreclosure-linked legal problems. Yesterday, we told you (since the Observer is apparently in no hurry to tell anyone) about a new investigation by New York Attorney General Eric Schneiderman of the bank’s faulty foreclosure procedures. Today, Huffington Post's Shahien Nasiripour reports that a federal auditor has told an Arizona court that Bank of America “significantly hindered” a federal probe into — you guessed it — the bank’s deficient foreclosure practices. The auditor told the court that BofA withheld crucial data and documents, stalled in handing over information, and thwarted investigators who wanted to talk to bank employees. The federal auditor has had to ask the Justice Department to intervene to compel Bank of America to comply with the investigation’s needs, thus the current courtroom drama.

The investigation stems from requests by BofA for $5.7 billion in taxpayer money which it says was lost in lousy loans. Most of those loans were made by Countrywide Financial, which BofA bought in 2008. The federal auditor indicates even more legal trouble ahead for the banking giant: his report, he says,  was "prepared in light of possible future litigation.” Read the complete story here, where you can also see a copy of the relevant court documents.

"Please, sir, can we have some more taxpayer money?" Image by John Goto, at johngato.org.uk
  • "Please, sir, can we have some more taxpayer money?" Image by John Goto, at johngato.org.uk

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