AIG sues BofA for $10 billion, alleging 'massive fraud'

[Copper Catcher]

You probably want hear much about this today because everyone is focusing on the stock market....However the question on the table...is this finally the end of BofA?

http://www.msnbc.msn.com/id/44061250/ns ... kBL_mZAsT4

[Lemon Thrower]

this became public yesterday and caused BAC to trade down 20% in a single day, on top of having trended down for several weeks.

i don't know anything about this case per se but AIG is alleging that they reviewed a huge number of files - not just a random sample - and 42% of the loans that Countrywide (now BAC) sold to them didn't meet standards.

You can read the lawsuit (complaint) here - its fairly plain English.

http://www.scribd.com/doc/61862536/A-I- ... of-America

AIG claims they paid $28 billion for these RMBS securities and that they reviewed 262,000 loan files before filing the lawsuit. if the average loan was just $110,000, that means they reviewed every loan!

Based on that review, they claim that roughly 40% of the loans did not meet standards when the loans were sold to them, and that they have $10 billion in damages!