The investors, which include several public pension funds, filed a suit in 2012 alleging that the banks “regularly disregarded” their duties as trustees for securities backed by Washington Mutual mortgages, according to a Bloomberg report.
According to the lawsuit, Bank of America and US Bancorp knew the mortgages backing the bonds were riskier than advertised and failed to force WaMu to repurchase defective loans. that failure cost investors millions of dollars, Bloomberg reported.
Washington Mutual filed for bankruptcy in 2008 after its banking unit was taken over by regulators and sold to JPMorgan Chase, Bloomberg reported. WaMu’s failure was the largest bank failure in the U.S., with $19 billion in losses from bad mortgages.
Editor's note: The headline to this story originally stated that Bank of America and US Bancorp were paying $69 billion to settle the lawsuit. The correct amount was $69 million. We regret the error.
Bank of America and US Bancorp have agreed to pay $69 million to settle investor claims that they failed to do their jobs as trustees for mortgage-backed securities.