U.S. can pursue lawsuit against Bank of America over mortgages

Published May 08, 2013

| Reuters

A federal judge on Wednesday said the government can pursue parts of a civil lawsuit against Bank of America Corp over its sale of toxic mortgages to Fannie Mae and Freddie Mac , boosting a largely untested legal theory that U.S. officials used in the case.

Bank of America had sought to dismiss the lawsuit, which seeks penalties under the 1989 FIRREA law and other laws.

U.S. District Judge Jed Rakoff issued a two-page ruling on Wednesday with his findings, but said he will explain the reasons for his decision at a later date.

(Reporting by Aruna Viswanatha and Jonathan Stempel; Editing by Gerald E. McCormick)