The California Attorney General’s office issued subpoenas to Bank of America and Countrywide Financial, a subsidiary Bank of America acquired in 2008.  The subpoenas relate to an investigation of Bank of America’s sale of mortgage-backed securities.  California recently backed out of settlement negotiations between the nation’s biggest banks and the federal and multiple state governments.

Most of the allegations against Bank of America stem from actions of Countrywide Financial who, before going bankrupt and being purchased by Bank of America, allegedly issued and bundled many of the riskiest loans.  Countrywide purportedly issued subprime loans to borrowers with insufficient credit, loans made to buyers without first verifying their reported assets, and balloon-payment mortgages that left borrowers owing progressively more rather than less.  Bank of America has already settled other allegations relating to Countrywide’s predatory lending practices with the state of California for $8.6 billion.  Several other lawsuits have resulted from these alleged activities.

Read the entire article, “California reportedly subpoenas BofA over toxic securities”