US BofA Continue Fight in Hustle Case

first_img September 22, 2014 663 Views in Daily Dose, Government, Headlines, News, Secondary Market The ongoing legal battle between the U.S. government and Bank of America over the sale of soured loans to Fannie Mae and Freddie Mac before the financial meltdown continued last week as lawyers for the government argued against a motion to throw out a fraud verdict rendered against the bank.In a court filing made Thursday, attorneys for the Justice Department said BofA’s attempt to overturn last October’s fraud verdict—which resulted in a $1.3 billion civil penalty—”[defies] the evidence, the law, and common sense.”The department’s argument came as a response to a late August filing by lawyers representing the megabank, who then said the government failed to conclusively prove that BofA’s Countrywide unit misrepresented the quality of loans packaged and sold to the GSEs in the lead-up to the housing crash. In their own filing, BofA’s team said argued “the evidence unambiguously showed that the … loans sold to Fannie and Freddie were well within industry standards for loan quality, and thus Fannie and Freddie received exactly what they paid for.”The bulk of the case revolved around a program at Countrywide called the High Speed Swim Lane (HSSL, or Hustle), which critics say emphasized production speed and volume at the expense of loan quality. The program ended before BofA’s acquisition of Countrywide in 2008.Also charged in the case was former Countywide official Rebecca Mairone, who the government accused of pushing the Hustle program against evidence that the loans being made were low-quality. Mairone was also found guilty and was ordered to pay $1 million.That judgment has also been disputed, with Mairone’s attorney arguing “… there was insufficient evidence for the jury to conclude that Mairone knew of any HSSL loans that were sold to the GSEs as ‘investment quality’ despite being ineligible for sale.”An after-hours call to a BofA spokesperson was not answered, and a request for comment from Mairone’s attorney was not immediately returned. U.S., BofA Continue Fight in ‘Hustle’ Casecenter_img Bank of America Countrywide Fannie Mae Freddie Mac Justice Department 2014-09-22 Tory Barringer Sharelast_img

Leave a Reply

Your email address will not be published. Required fields are marked *