AIG to Sue Bank of America Over Mortgages

American International Group Inc. plans to sue Bank of America Corp. Monday in an effort to recover more than $10 billion it lost on mortgage investments, and intends to object to the lender's proposed settlement with other mortgage-bond investors.

AIG's lawsuit and its separate attempt to intervene in the much-publicized $8.5 billion settlement throw another obstacle in the way of Bank of America's efforts to put its mortgage woes behind it.

The suit over the $10 billion in losses alleges "massive fraud" by Bank of America and two units it acquired, Merrill Lynch and Countrywide, saying they packaged securities that were backed by "hundreds of thousands of defective mortgages," according to a copy of the legal action AIG representatives plan to file in New York Supreme Court Monday morning.

Read Full Article from Wall Street Journal

- Posted: 2011-08-08 10:16:54

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