The government states in a $1 billion lawsuit that B of A and the former Countrywide, absorbed into B of a, sold mortgage fraudulently to Freddie Mac and Fannie Mae. The B of A mortgage fraud suit isn't the first the financial institution has had to face, nor likely will it be the very last.
Bank of America mortgage fraud lawsuit a result of acquiring Countrywide
Countrywide is a mortgage lender that Bank of America acquired when it went under during the recession. It is one of the mortgage businesses that were known for making a lot of monetary blunders. Bank of America has been dealing with a ton of lawsuits because of the things the business did.
Another such lawsuit has just been filed by the U.S. Lawyer of Manhattan, according to the New York Times, claiming mortgage fraud in a number of loans that Countrywide sold to federally owned but privately-run mortgage insurance houses Freddie Mac and Fannie Mae. The Bank of America mortgage fraud suit seeks $1 billion in damages.
Hustle and flow
The B of A mortgage fraud lawsuit states that before and after Countrywide had been acquired and absorbed into the company, a program known as "High Speed Swim Lane," according to the Washington Post, or "HSSL" or "hustle" was in place that essentially put mortgage loans on the fast track to federal backing without properly vetting the mortgage loans.
In essence, the program is alleged to have encouraged Countrywide and later Bank of America employees to overlook the standard of the mortgages, skipping a verification of the borrower's income or falsifying data and giving bonuses to workers who could get the most mortgage loans lent. The program, according to USA Today, is said to have lasted from 2007 to 2009, after Countrywide had been fully absorbed.
There was a borrower that defaulted within a year when $81,000 in debt was not disclosed on the loan documents. Another borrower was only making $2,666 per month but had written on the loan application $15,500 per month. That person defaulted in seven months. It is the bank's job to make sure all the info is right because that is not Fannie and Freddie's job.
Lies about this
The government has the right to sue considering Freddie and Fannie are basically under government control right now. The Justice Department is upset because Bank of America should have repurchased any loans sold under the program, but the bank unsuccessful to do so. That is why the Justice Department wants to get $1 billion in losses.
Many people who bought homes with the loans have been foreclosed on, though B of A denies any wrongdoing. A 2008 study found that 57 percent of homeowners were in the program and defaulted, according to USA Today.
Bank of America mortgage fraud lawsuit a result of acquiring Countrywide
Countrywide is a mortgage lender that Bank of America acquired when it went under during the recession. It is one of the mortgage businesses that were known for making a lot of monetary blunders. Bank of America has been dealing with a ton of lawsuits because of the things the business did.
Another such lawsuit has just been filed by the U.S. Lawyer of Manhattan, according to the New York Times, claiming mortgage fraud in a number of loans that Countrywide sold to federally owned but privately-run mortgage insurance houses Freddie Mac and Fannie Mae. The Bank of America mortgage fraud suit seeks $1 billion in damages.
Hustle and flow
The B of A mortgage fraud lawsuit states that before and after Countrywide had been acquired and absorbed into the company, a program known as "High Speed Swim Lane," according to the Washington Post, or "HSSL" or "hustle" was in place that essentially put mortgage loans on the fast track to federal backing without properly vetting the mortgage loans.
In essence, the program is alleged to have encouraged Countrywide and later Bank of America employees to overlook the standard of the mortgages, skipping a verification of the borrower's income or falsifying data and giving bonuses to workers who could get the most mortgage loans lent. The program, according to USA Today, is said to have lasted from 2007 to 2009, after Countrywide had been fully absorbed.
There was a borrower that defaulted within a year when $81,000 in debt was not disclosed on the loan documents. Another borrower was only making $2,666 per month but had written on the loan application $15,500 per month. That person defaulted in seven months. It is the bank's job to make sure all the info is right because that is not Fannie and Freddie's job.
Lies about this
The government has the right to sue considering Freddie and Fannie are basically under government control right now. The Justice Department is upset because Bank of America should have repurchased any loans sold under the program, but the bank unsuccessful to do so. That is why the Justice Department wants to get $1 billion in losses.
Many people who bought homes with the loans have been foreclosed on, though B of A denies any wrongdoing. A 2008 study found that 57 percent of homeowners were in the program and defaulted, according to USA Today.
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