NEW YORK (TheStreet) -- Shares of Bank of America Corp. (BAC) are down 0.80% to $17.99 after Ambac Assurance Corp. sued the bank to recoup hundreds of millions of dollars of losses from insuring roughly $1.68 billion of securities backed at least in part by risky mortgages from the bank's Countrywide Home Loans unit, Reuters reports.
In a complaint filed on Tuesday in a New York state court in Manhattan, Ambac accused Countrywide of lying about how well it underwrote so-called "pay option adjustable-rate mortgage negative amortization" loans that backed the securities, Reuters said.
The securities were issued in eight transactions between 2005 and 2007, Ambac noted.
Exclusive Report: Jim Cramer's Best Stocks for 2015
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Ambac said it faced potential claims exceeding $600 million as of October 31 and that pools of loans supporting its insured certificates had suffered $3.07 billion of losses by Nov. 30. It also said it would have never guaranteed payments had it known of Countrywide's deception, according to Reuters.
Separately, TheStreet Ratings team rates BANK OF AMERICA CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BANK OF AMERICA CORP (BAC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."