Bank of America Corp. and US Bancorp were sued by the agency that oversees federal credit unions, which claimed the banks failed as trustees over securities backed by home mortgages that defaulted after the 2008 credit crisis, Bloomberg News reported yesterday. The lawsuit, filed in Manhattan federal court, claims that Bank of America and US Bancorp served as trustees for residential mortgage-backed securities in 99 trusts with an original face value of $5.8 billion. They failed to review mortgage loan files for irregularities, missing “numerous problems,” including that the trusts “suffered enormous losses due to the high number of mortgage defaults, delinquencies, and foreclosures caused by defective loan origination and underwriting,” according to the complaint by the National Credit Union Administration Board.
