Noted U.S. businessman Warren Buffett is investing $5 billion in the nation's largest financial institution, Bank of America, which is facing potentially huge losses over its home mortgage business.

Shares of Bank of America have plummeted over fears the bank is vulnerable over its 2008 purchase of mortgage lender Countrywide Financial, the company whose reckless lending practices symbolized the collapse of the housing market and the subsequent global recession.

The bank has paid out or offered billions of dollars to settle claims over failed investments in mortgage-backed stocks, and is facing a $10 billion lawsuit from American International Group. It has sold billions of dollars worth of assets in recent weeks to shore up its balance sheet.

News of Buffett's investment sent Bank of America's shares soaring on Wall Street Thursday.

Buffett, who owns the Nebraska-based Berkshire Hathaway investment group, issued a statement saying he was investing in Bank of America because he considered it to be a “strong, well-led company.”

He has invested in other troubled U.S. financial firms since the global recession began in 2008, including a similar amount of money with investment bank Goldman Sachs.

Buffett, the second-wealthiest person in the United States, has called on lawmakers to raise taxes on the country's “super-rich” as one way to cut the national debt and budget deficit.