US sues Bank of America $1bn losses

The US has filed a fraud lawsuit against Bank of America, accusing it of causing taxpayers more than $1bn (€770m) of losses by selling thousands of toxic mortgages to Fannie Mae and Freddie Mac.

Yesterday’s case, originally brought by a whistleblower, is the US department of justice’s first civil fraud lawsuit over mortgage loans sold to the big mortgage financiers, which were bailed out in 2008.

It also compounds the legal problems that Bank of America CEO Brian Moynihan faces over the second-largest US bank’s disastrous 2008 purchase of Countrywide Financial Corp, once the nation’s largest mortgage lender.