Mortgage-backed Securities, Bank Of America | featured news

California is trying to determine whether BofA and its Countrywide Financial subsidiary sold investments backed by risky mortgages to investors in California under false pretenses, a source says. Investigators with the state attorney general's office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe.

Bank of America Corp is close to a deal to pay $8.5 billion to settle claims from investors that lost money on mortgage-backed securities, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

Bank of America Corp's Countrywide mortgage unit has been sued by investors claiming they were victimized in a "massive fraud" when they bought mortgage-backed securities.