Bank of America Corp's mortgage practices came under fresh fire as state and federal regulators questioned whether the largest U.S. bank is doing what it must to address perceived harm to homeowners and investors.

Nevada's attorney general on Tuesday accused the bank of repeatedly violating its $8.4 billion agreement with that state and others to address fraudulent lending charges involving its Countrywide unit, which it bought in 2008.

Catherine Cortez Masto, the state attorney general, asked a federal judge in Reno, Nevada, to let her back out of that accord and sue Bank of America on behalf of homeowners in Nevada, which has one of the nation's highest foreclosure rates and percentages of borrowers who owe more than their homes are worth.

Separately on Tuesday, the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, as well as dozens of investors lodged objections to Bank of America's proposed $8.5 billion settlement with investors in Countrywide mortgage-backed securities, an agreement negotiated by the trustee Bank of New York Mellon Corp.

Among the other objectors was Goldman Sachs Group Inc, which said it lacks enough information to know whether the accord treats all "similarly situated" investors equally.

And in a third proceeding, a group of homeowners sued to block that $8.5 billion accord, saying it would speed up foreclosures and prolong mortgage abuses. That group asked for a court order requiring the bank to follow servicing policies that are "higher than current industry standards."

In her proposed complaint, the Nevada attorney general said Bank of America still engages in "a pattern and practice" of misleading consumers about such matters as why it denies mortgage modifications, or begins foreclosures while modification requests are pending.

Bank of America was to help 400,000 borrowers modify their home loans under the 2008 accord.

But Masto called the process "chaotic," even accusing the Charlotte, North Carolina-based bank of reprimanding workers for spending "too much time" on the phone -- an average of seven to 10 minutes -- with individual customers.

"Defendants' deceptive practices have resulted in an explosion of delinquencies and unauthorized and unnecessary foreclosures" in Nevada, Masto said in court papers. "The state no longer can get the benefit of its original settlement."

It is unclear how the allegations might affect long-running negotiations on a potential multibillion-dollar settlement with regulators nationwide to improve foreclosure practices at several big banks, including Bank of America.

"We disagree that there has been any material breach of the consent decree and will continue to vigorously defend this action." Bank of America spokeswoman Jumana Bauwens said in response to the Nevada filings.

Lawrence Grayson, another bank spokesman, declined to comment on the other litigation matters, as did Bank of New York Mellon spokesman Kevin Heine.

INVESTOR, HOMEOWNER CLAIMS

The settlement with mortgage-backed securities covers 530 mortgage pools from the former Countrywide Financial Corp, the largest U.S. mortgage lender before Bank of America bought it.

Bank of New York Mellon had negotiated the accord, covering $174 billion of unpaid principal balances, with 22 big investors including the Federal Reserve Bank of New York, BlackRock Inc and Allianz SE's Pimco.

But some other investors say the payout is too low, or they lack enough information to know whether the accord is fair.

In a court filing, the FHFA called it a "positive" that the settlement calls for improving loan servicing and fixing deficient documentation, and said the support of many large market participants is "encouraging."

Still, the FHFA said it lacks enough information about the accord, and wants to be ready to voice a "substantive" objection "should a now unforeseen issue arise."

Fannie Mae and Freddie Mac in 2010 guaranteed 70 percent of single-family mortgage-backed securities that were issued, and provided $1.03 trillion of market liquidity, an FHFA report to Congress in June shows.

"The FHFA sounds like it wants to preserve its right to contest refinements that could expose Fannie and Freddie to greater losses," said Kathleen Engel, associate dean at Suffolk University Law School in Boston and co-author of "The Subprime Virus."

Marc Kasowitz, a lawyer for the FHFA, did not immediately respond to a request for comment.

Meanwhile, the homeowners, who say they have received default notices, seek class-action status for Countrywide borrowers from 2004 to 2008 whose loans are in the trusts and are serviced by Bank of America."

"The settlement agreement will speed up foreclosures, perpetuate existing servicing abuses in the system, and undermine federal programs designed to stabilize the housing market," the complaint said.

"It is not clear the borrowers have standing," Engel said. "They certainly may be aggrieved by servicing problems, but they have to show the settlement itself causes them harm, either new injury or the loss of legal rights."

A lawyer for the homeowners did not immediately respond to a request for comment.

DOZENS OF OBJECTIONS

Bank of America paid $2.5 billion to buy Countrywide, but writedowns and legal costs have pushed the estimated cost of that purchase to more than $30 billion.

Several dozen objections to the $8.5 billion settlement were filed ahead of a Tuesday deadline to intervene in the case, which is overseen by New York State Supreme Court Justice Barbara Kapnick in Manhattan.

Some of the challenges were filed simultaneously in federal court, where some of the objectors hope to move the case.

American International Group Inc, the insurer suing Bank of America for $10 billion in a separate MBS case, is among the objectors. Others include the Federal Deposit Insurance Corp, attorneys general of New York and Delaware, and various banks, insurers, investment funds and pension funds.

US Bancorp, trustee for a $1.75 billion Countrywide mortgage pool, this week separately sued Bank of America to force it to buy back the underlying loans.

The Nevada case is Nevada v. Bank of America Corp et al, U.S. District Court, District of Nevada, No. 11-00135. The New York state case is In re: The Bank of New York Mellon, New York State Supreme Court, New York County, No. 651786/2011. The New York federal case is The Bank of New York Mellon et al v. Walnut Place LLC et al, U.S. District Court, Southern District of New York, No. 11-05988. The homeowner case is Iesu et al v. The Bank of New York Mellon et al, U.S. District Court, Southern District of New York, No. 11-06078. (Reporting by Jonathan Stempel; Additional reporting by Joe Rauch in Charlotte, N.C.; editing by Carol Bishopric, Gary Hill)

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