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BofA is Sued for Over $1 Billion for Mortgage Fraud Scheme

WASHINGTON, DC (Source: SIGTARP) - Christy L. Romero, the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”); Preet Bharara, the United States Attorney for the Southern District of New York; and Steve A. Linick, the Inspector General of the Federal Housing Finance Agency (“FHFA”) yesterday announced that the United States has filed a civil mortgage fraud lawsuit against Bank of America Corporation (“Bank of America”) and its predecessors Countrywide Financial Corporation and Countrywide Home Loans, Inc. (collectively, “Countrywide”). The Government’s Complaint seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) for engaging in a scheme to defraud the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Specifically, the Complaint alleges that from at least 2007 through 2009, Countrywide, and later Bank of America after acquiring Countrywide in 2008, implemented a new loan origination process called the “Hustle,” which was intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans sold to Fannie Mae and Freddie Mac that later defaulted, causing over $1 billion in losses and countless foreclosures.

This is the first civil fraud suit brought by the Department of Justice concerning mortgage loans sold to Fannie Mae or Freddie Mac.

SIGTARP Special Inspector General Christy Romero said: “The complaint alleges serious and significant misrepresentations that Bank of America made before and during the time taxpayers invested $45 billion in TARP funds in the bank. SIGTARP and its law enforcement partners will investigate allegations of wrongdoing by TARP recipients, particularly conduct that results in substantial losses to the government and taxpayers.”

Source: SIGTARP

To read entire press release, click on this link


About Alex Ferreras

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