BBC News, 10
November 2013
Related
Stories
- JP Morgan 'faces record $13bn fine'
- Wells Fargo to pay Freddie Mac $869m
- Citigroup to pay Freddie Mac $395m
 |
| Bank of America bought Countrywide Financial in 2008 |
US attorney
Preet Bharara made the request in documents filed late Friday in New York.
The bank
was found liable for defrauding two US state-backed mortgage companies by a
federal jury last month.
Countrywide
was acquired by Bank of America in 2008.
The ruling
was a major win for the US government, which launched the case in the wake of
the financial crisis.
Reports
last month suggested that US banking giant JP Morgan is set for a record $13bn
fine to settle investigations into its mortgage-backed securities.
And Wells
Fargo agreed to pay $335m to settle claims it misled investors over
mortgage-backed bonds.
The US
Department of Justice is investigating at least nine banks over their sales of
mortgage-backed securities.
'Hustle'
Countrywide
was found liable for selling thousands of defective loans to Fannie Mae and
Freddie Mac.
The
month-long trial focused on a Countrywide programme that was internally called
"Hustle" or "high-speed swim lane" which allowed loans to
be processed quickly without checking their quality.
The
wrongdoing, which mostly took place before Countrywide was acquired, was
discovered after a whistleblower filed a lawsuit against the firm.
The US
economy witnessed a big boom in its housing market in the lead-up to the
2007-08 global financial crisis.
As house
prices continued to rise, many banks looked to cash in on the boom by creating
complex financial products that grouped together home loans.
However, a
collapse in the housing market saw the value of those investments plummet as
the underlying mortgage holders became unable to repay their debts.
This
snowballed into the subprime crisis, which hurt investors globally and caused
billions of dollars in losses.
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