Google – AFP, 24 october 2012
 |
The
government charged that Countrywide -- now owned by Bank of America
-- labelled
defective mortgages as high-quality (AFP/File, Stan Honda)
|
WASHINGTON
— The United States sued Bank of America Wednesday for more than $1 billion for
allegedly having sold dodgy mortgages to state-controlled mortgage financers
Fannie Mae and Freddie Mac.
The
government charged that Countrywide -- the mortgage giant now owned by Bank of
America -- labeled defective mortgages as good-quality and sold them to the two
companies.
The suit
says that between 2007 and 2009 Countrywide ran a mortgage origination program
called "Hustle" which aimed to quickly process thousands of new
mortgages without quality controls and then sell them to Fannie and Freddie.
Hustle
caused "over $1 billion dollars in losses and countless
foreclosures," Preet Bahara, the US attorney in New York City, said in a
statement.
"The
fraudulent conduct alleged in today's complaint was spectacularly brazen in
scope," Bahara said.
"Countrywide
and Bank of America made disastrously bad loans and stuck taxpayers with the
bill."
"This
lawsuit should send another clear message that reckless lending practices will
not be tolerated."
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