BOA wants to void $1.27bn Countrywide verdict

by Ryan Smith29 Aug 2014
After agreeing to pay nearly $17 billion to settle federal probes over its sale of mortgage bonds, Bank of America is trying to get out of a $1.27 billion penalty for defective loans sold by its Countrywide unit.

The bank asked U.S. District Court Judge Jed Rakoff to void a jury verdict finding it liable for fraud over the Countrywide loans, according to a Reuters report. The bank’s lawyers said the prosecutors failed to prove that the defective loans, originated through a streamlined process known as “Hustle” and then sold to Fannie Mae and Freddie Mac, were not as good as Countrywide represented.

“The trial evidence, even viewed in the light most favorable to the government, did not prove fraud under this standard,” bank attorneys claimed.

A jury found the bank and former Countrywide exec Rebecca Mairone liable for fraud last year. Government prosecutors said Countrywide’s “Hustle” program streamlined the loan process to the point that quality checks were all but eliminated. Employees were rewarded for producing more loans, not for the quality of those loans.

After the verdict, Rakoff ordered Mairone to pay a $1 million penalty and the bank to pay $1.27 billion. That amount wasn’t included in the bank’s recent $16.65 billion settlement.
 

COMMENTS

  • by JoeforJustice | 8/29/2014 10:31:45 AM

    Bank of America is corrupt to the core. Meanwhile, they sold off a ton of mortgages that they promised to modify. Fannie Mae has it's lawyers continue to FORGE mortgage notes to steal the homes. This is the TRUTH. When will someone, anyone who has the position to do so, stop this from occurring and go back and help the homeowners who are currently losing their homes or have already done so. Why would you need to forge something in the first place? Something stinks here and it's truly rotten.

  • by MattforAccountablity | 8/29/2014 3:07:36 PM

    Homeowners are losing their homes because the bank is "stealing" them??? Comical at best. Last time I checked, the bank takes homes back when you DONT pay your mortgage note on time. Next you are going to tell me that the homeowner isn't responsible for the leveraged note they signed up for in an effort to grab the huge equity gains during the bubble.

    Come on Joe, quit pointing fingers and look in the mirror.

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