Bank of America (NYSE:BAC) Sued Again Over Countrywide Unit, This Time for "Massive Fraud

Bank of America (NYSE:BAC) had to know when they took over Countrywide Financial that there would be headaches with it, but as time goes on, it's hard not to wonder if they knew the depths the headaches would go, as they've been sued again over the unit, this time with a complaint of "massive fraud."

About a dozen institutional investors have joined in a lawsuit against Bank of America, including Dexia Holdings, TIAA-CREF Life Insurance Co.and New York Life Insurance Co., alleging Bank of America's unit misled them concerning mortgage-back securities they invested in.

The complaint stated, “Countrywide was an enterprise driven by only one purpose - to originate and securitize as many mortgage loans as possible into MBS to generate profits for the Countrywide defendants without regard to the investors that relied on the critical, false information provided to them with respect to the related certificates."

According to the investors, they made their decision to acquire the mortgages based on materials that "were recklessly or knowingly false."

Bank of America spokeswoman Shirley Norton responded to the lawsuit saying, “We will review the suit, but on first glance this sounds like a large, sophisticated investor who now wants to blame someone for the fact that the declining economy caused its investment to lose value.”

Bank of America closed Tuesday at $13.63, down $0.29, or 2.08 percent.