BofA’s Countrywide Found Liable for Defrauding U.S.
By Patricia Hurtado - Oct 23, 2013 3:38 PM ET .
Bank of America Corp.’s Countrywide unit was found liable for defrauding Fannie Mae (FNMA) and Freddie Mac by selling them thousands of defective loans.
A federal jury in New York today also found former Countrywide executive Rebecca Mairone liable for defrauding the U.S. Mairone was the only individual named as a defendant in the government’s lawsuit. Countrywide was acquired by the Charlotte, North Carolina-based bank in 2008.
U.S. District Judge Jed Rakoff, who presided over the trial, previously told lawyers he will determine the amount of any civil penalty. The U.S. has requested more than $848 million, the gross loss to Fannie Mae and Freddie Mac as calculated by its expert, or an alternative penalty of more than $131 million, an amount equal to the estimated net loss.
During the four-week trial, prosecutors in the office of Manhattan U.S. Attorney Preet Bharara alleged that a division of Countrywide in August 2007 initiated a loan program called “High Speed Swim Lane,” or HSSL, that ran until 2008.
Countrywide earned at least $165 million using HSSL, allowing the company to maintain revenue in a “cratering” market for subprime mortgages, the U.S. argued. Government-sponsored entities, or GSEs, such as Fannie Mae and Freddie Mac (FMCC) bought single-family mortgages from lenders.
more:
http://www.bloomberg.com/news/2013-10-23/bofa-s-countrywide-found-liable-for-defrauding-u-s-.html
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