UBS sued Bank of America for $200 million, claiming Bank of America refused to cover legal costs related to risky mortgages from before the 2008 financial crisis.
UBS had bundled mortgages from Countrywide Financial into securities. Bank of America acquired Countrywide in 2008, and UBS says Countrywide had agreed to indemnify it against claims of poor or fraudulent underwriting.
UBS settled for $885 million with the U.S. Federal Housing Finance Agency in 2013 and reached a confidential settlement with the Federal Home Loan Bank of San Francisco in 2016 over these loans.
UBS claims that despite extended negotiations, including $53 million in legal costs, Bank of America did not comply with its indemnification obligations.
Bank of America has not yet responded to the lawsuit. UBS also did not provide details on how the $200 million claim was calculated. The lawsuit was filed in a New York state court.
Bank of America acquired Countrywide for $2.5 billion in July 2008 and later faced significant costs from acquiring both Countrywide and Merrill Lynch.
Stay informed with our financial updates, stocks, bonds, commodities. Get global & political insights. Follow us & enable notifications for the latest updates.