Countrywide to pay $1.3bn to settle mortgage probe

by Ryan Smith30 Jul 2014
Bank of America’s Countrywide unit has been ordered to pay a $1.3 billion settlement for shoddy loans sold to Fannie Mae and Freddie Mac.

The judgment is a little more than half what the government had sought, according to a Bloomberg report. Countrywide and former executive Rebecca Mairone were found liable for fraud in October. Mairone was ordered to pay the government $1 million.

Bank of America is also in separate talks with the Justice Department to resolve other mortgage probes. The bank had offered to pay $13 billion to settle the investigations, while the government has asked for $17 billion. The talks continued today, and a settlement could be reached this week, Bloomberg reported.
 

COMMENTS

  • by | 7/30/2014 3:34:06 PM

    All that criminal fraud and no jail time. Very good!

  • by William Matz | 7/30/2014 4:35:14 PM

    Important to remember that this settlement is just for the covered, conforming mortgages. It does not include anything for the Pay Option ARMs, nor does it eliminate potential liability to borrowers and m.i. companies.

  • by dawolph, (fee based due diligence) | 7/30/2014 11:02:54 PM

    Not only that, this is just on the residential side. The commercial underwriting made the residential side look like a bunch of honor students at a monastery.

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