ML-Implode News - Everybody Will Always Be Suing BofA Over Mortgages

``The complaints put their fraudy eggs in two main baskets. The first is that Bank of America omitted to tell investors some material facts, of which the most important is that 70% of the loans in this securitization were wholesale loans (originated through brokers), and that wholesale loans were worse -- for both credit and prepayment risk -- than loans originated by BofA directly. The idea here is that the channel composition was so material to investors that BofA should have disclosed it, and was fraudulent not to. Now one response here might be: if it was so material to investors, why didn't they ask for it? And the answer is: some of them did! And BofA: gave them the information! And those investors: invested anyway! At the same price as everyone else.1 So: was the origination channel composition material to investors? If investors had known that these loans were 70% wholesale, would they have stayed away? That is an empirically answerable question, and the answer is no.''

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Everybody Will Always Be Suing BofA Over Mortgages