Prosecutors want Bank of America to pay a large fine as punishment “for their culpability and bad faith"
So there seems to be a small difference of opinion between the government and Bank of America. The Justice Department is asking for a penalty of up to $2.1bn for the bank’s fraud conviction last year. The bank, however, is using different math; it says it shouldn’t have to pay anything. Or at most, $1.1 million.
The DOJ has asked Judge Jed Rakoff to levy the fine for fraud related to the “Hustle” program of BOA’s Countrywide unit, according to a MarketWatch report. The $2.1bn price tag is more than double the $864 million prosecutors originally asked for – but the government says the new asking price is based on gains the bank saw from the fraud, whereas the original $864 million request was based only on gross losses that Fannie Mae and Freddie Mac suffered through the purchase of Countrywide loans.
Prosecutors said that the bank should pay the larger fine as punishment “for their culpability and bad faith, and to deter financial institutions and their executives who would engage in similar fraudulent mortgage schemes.”
The lender was found liable last year for defrauding Fannie Mae and Freddie Mac through the sale of subpar mortgages purchased through Countrywide between 2007 and 2008. Also liable was former Countrywide executive Rebecca Mairone, from whom the government requested damages “commensurate with her ability to repay.”
According to prosecutors, Countrywide ran shoddy mortgages through a program known as “High Speed Swim Lane” or “Hustle,” in which underwriting standards were sacrificed for approval speed and volume. Thousands of the deficient mortgages were sold to Fannie and Freddie, which saw a gross loss of more than $848 million and a net loss of more than $131 million, according to Bloomberg. Countrywide, meanwhile, earned at least $165 million selling loans through the “Hustle” program.
The DOJ has asked Judge Jed Rakoff to levy the fine for fraud related to the “Hustle” program of BOA’s Countrywide unit, according to a MarketWatch report. The $2.1bn price tag is more than double the $864 million prosecutors originally asked for – but the government says the new asking price is based on gains the bank saw from the fraud, whereas the original $864 million request was based only on gross losses that Fannie Mae and Freddie Mac suffered through the purchase of Countrywide loans.
Prosecutors said that the bank should pay the larger fine as punishment “for their culpability and bad faith, and to deter financial institutions and their executives who would engage in similar fraudulent mortgage schemes.”
The lender was found liable last year for defrauding Fannie Mae and Freddie Mac through the sale of subpar mortgages purchased through Countrywide between 2007 and 2008. Also liable was former Countrywide executive Rebecca Mairone, from whom the government requested damages “commensurate with her ability to repay.”
According to prosecutors, Countrywide ran shoddy mortgages through a program known as “High Speed Swim Lane” or “Hustle,” in which underwriting standards were sacrificed for approval speed and volume. Thousands of the deficient mortgages were sold to Fannie and Freddie, which saw a gross loss of more than $848 million and a net loss of more than $131 million, according to Bloomberg. Countrywide, meanwhile, earned at least $165 million selling loans through the “Hustle” program.
