Bank of America

Class Action Suit against Bank of America's Loan Modification Program

The battle over loan modifications of troubled mortgages has begun. On Dec. 1, 2008, William Frey, a private investor in mortgage-backed securities, filed a lawsuit in New York State Supreme Court, alleging that the proposed loan modification of some 400,000 home loans originally underwritten by the defunct lender Countrywide Financial is illegal.

Loan modification problems at Bank of America

The Problem:

More than $2 trillion in mortgage loans were packaged into mortgage-backed securities, and were sold to investors by Wall Street.