The mortgage finance industry had a lot to do with the monetary; meltdown of the past few years. Consequently, there have been and will continue to be suits seeking to undo some of the damage. A recently-filed B of A mortgage fraud suit was filed by the government, seeking $1 billion in problems from fraudulently sold mortgages.
Getting Countrywide a punishment
One of the most egregious actors in the misdoings of the mortgage finance industry is generally held to be Countrywide, which imploded and ultimately had to be bought by Bank of America. Since then, B of a has been slapped with numerous lawsuits linked to the misdeeds of the 2008 addition to the bank's mortgage division.
According to the New York Times, another suit was just filed by the U.S. Lawyer of Manhattan claiming $1 billion in damages. Apparently, countrywide sold numerous loans to Freddie Mac and Fannie Mae fraudulently.
Hustle and flow
The lawsuit suggests that Countrywide had a program called "High Speed Swim Lane" that would get federal backing for the loans despite the truth that they were not vetted properly. This all happened before B of A acquired the business supposedly.
The program is alleged to have paid employees bonuses if they were willing to overlook quality of the mortgage and skip verification of income. They were even encouraged to falsify info if it meant giving out mortgage loans. According to USA Today, the program is suspected of happening from 2007 to 2009, well after Bank of America took over the business.
Fannie and Freddie's job does not entail vetting the loans, which is why the bank is responsible for it. There was one loan made to someone who only made $2,666 per month, though the application said the person was making $15,500 a month. Within seven months, the individual defaulted. Someone else defaulted within a year after failing to disclose $81,000 in debt.
Claiming it was a lie
The government has the right to sue considering Fannie and Freddie are basically under government control right now. The Justice Department is upset because B of A should have repurchased any loans sold under the program, but the bank failed to do so. That is why the Justice Department wants to get $1 billion in losses.
According to USA Today, a 2008 study showed that 57 percent of homeowners in the program defaulted, and there were a lot in the program. The bank says all allegations are false while people are no longer in the homes they bought.
Getting Countrywide a punishment
One of the most egregious actors in the misdoings of the mortgage finance industry is generally held to be Countrywide, which imploded and ultimately had to be bought by Bank of America. Since then, B of a has been slapped with numerous lawsuits linked to the misdeeds of the 2008 addition to the bank's mortgage division.
According to the New York Times, another suit was just filed by the U.S. Lawyer of Manhattan claiming $1 billion in damages. Apparently, countrywide sold numerous loans to Freddie Mac and Fannie Mae fraudulently.
Hustle and flow
The lawsuit suggests that Countrywide had a program called "High Speed Swim Lane" that would get federal backing for the loans despite the truth that they were not vetted properly. This all happened before B of A acquired the business supposedly.
The program is alleged to have paid employees bonuses if they were willing to overlook quality of the mortgage and skip verification of income. They were even encouraged to falsify info if it meant giving out mortgage loans. According to USA Today, the program is suspected of happening from 2007 to 2009, well after Bank of America took over the business.
Fannie and Freddie's job does not entail vetting the loans, which is why the bank is responsible for it. There was one loan made to someone who only made $2,666 per month, though the application said the person was making $15,500 a month. Within seven months, the individual defaulted. Someone else defaulted within a year after failing to disclose $81,000 in debt.
Claiming it was a lie
The government has the right to sue considering Fannie and Freddie are basically under government control right now. The Justice Department is upset because B of A should have repurchased any loans sold under the program, but the bank failed to do so. That is why the Justice Department wants to get $1 billion in losses.
According to USA Today, a 2008 study showed that 57 percent of homeowners in the program defaulted, and there were a lot in the program. The bank says all allegations are false while people are no longer in the homes they bought.
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