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Saving For a Space Ship

Jury Finds Bank Of America Unit & Executive Liable For Mge Fraud

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a jury found Bank of America’s (BAC) Countrywide unit liable for defrauding Fannie Mae and Freddie Mac with loans it should have known were substandard.

The penalty is yet to be determined. The government has requested a maximum of almost $850 million, Bloomberg News reported. Rebecca Mairone, a former executive at Countrywide, was also found liable, as the jury heard details of a program she oversaw called the High Speed Swim Lane—aka “the hustle”—that earned the lender at least $165 million.

The Justice Department is also on the verge of reaching a record $13 billion settlement with JPMorgan Chase (JPM) over faulty mortgage securities that the bank and two institutions it bought during the crisis, Bear Stearns and Washington Mutual, sold. Bank of America bought Countrywide in July 2008.

STORY: Hank Paulson: This Is What It Was Like to Face the Financial Crisis

During the four-week trial, prosecutors argued that HSSL processed nearly 30,000 loans with more regard for speed than quality. “Quality was no more than a distraction,” Assistant U.S. Attorney Jaimie Nawaday said ....

Edited by Saving For a Space Ship

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