The federal government wants Bank of America to fork over $863.6 million in damages following a jury finding the lender liable for fraud over shoddy mortgages sold by its Countrywide unit
The federal government wants Bank of America to fork over $863.6 million in damages following a jury finding the lender liable for fraud over shoddy mortgages sold by its Countrywide unit.
The lender was found liable last month for defrauding Fannie Mae and Freddie Mac through the sale of subpar mortgages purchased through Countrywide between 2007 and 2008, according to a Reuters report. 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.
Bank of America has said that it’s considering its options for appealing the verdict, according to Reuters. Mairone, meanwhile, intends to argue against the imposition of any penalty, her attorney said.
