(Reuters) - Freddie Mac's failure to properly review some defaulted loans could cost taxpayers billions of dollars, according to a report on Tuesday that may give the government extra firepower to wring far more money from Bank of America in legal settlements.
A senior examiner at the Inspector General's office of the Federal Housing Finance Agency, the regulator's independent watchdog, had raised concerns about Freddie Mac's loan review process months before the FHFA reached a $1.3 billion settlement with Bank of America (BAC.N) over poorly underwritten mortgages.
But the regulatory board did not act on the examiner's findings in a timely way, the report said. Neither did it test Freddie Mac's analysis underlying the huge settlement it reached with BofA on defaulted loans, the inspector general said in the report.
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