Bank of America Sued by U.S. Over Mortgage Loan Sales
By David Glovin and Hugh Son - Oct 24, 2012 1:52 PM ET.
Bank of America Corp., the second- biggest U.S. lender by assets, sold defective residential mortgage loans to Fannie Mae and Freddie Mac (FMCC) that later defaulted, the U.S. government said in a $1 billion fraud lawsuit against the bank.
The U.S. Justice Department filed the complaint today in Manhattan federal court, claiming the bank and its Countrywide Financial unit generated thousands of defective mortgage loans and sold them to Fannie Mae and Freddie Mac.
The lawsuit is the first by the Justice Department to allege fraud over mortgage loans sold to the two entities, Manhattan U.S. Attorney Preet Bharara said in a statement announcing the suit, which covers conduct from 2007 to 2009. Bank of America acquired Countrywide in 2008.
“The fraudulent conduct alleged in today’s complaint was spectacularly brazen,” Bharara said. “Through a program aptly named ‘the Hustle,’ Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill.”
Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, didn’t immediately return calls and an e-mail seeking comment on the complaint.
The lawsuit is the sixth brought against a major U.S. bank by the Justice Department in less than 18 months over what Bharara called “reckless mortgage practices in the lead-up to the financial crisis.”
more:
http://www.bloomberg.com/news/2012-10-24/bank-of-america-sued-for-1-billion-by-u-s-over-mortgages-1-.html
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