New York AG Probes B of A Over Mortgages: Filing

Bank of America's (BAC) precrisis sales of mortgage-backed securities are under investigation by the New York attorney general.

The inquiry concerns "the purchase, securitization and underwriting of mortgage loans and MBS" before the financial meltdown, B of A said in its latest annual filing with the Securities and Exchange Commission.

Bank of America also said it is cooperating fully with the investigation, and that it has increased its estimate of maximum liability from mortgage-related lawsuits. B of A's worst-case scenario for exposure is now $3.1 billion beyond the funds it has already set aside, up from its $2.8 billion estimate at Sept. 30.

B of A spokesman Lawrence Grayson declined to comment on the filing, which was first reported by Reuters.

James Freedland, a spokesman for New York Attorney General Eric Schneiderman, declined to comment.

Bank of America is at least the third bank to be probed by Schneiderman in connection with mortgage-related business conducted before the financial crisis. Schneiderman has charged Credit Suisse and JPMorgan Chase with wrongdoing in the sale of mortgage-backed securities.

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