A report from the national law firm of Charles Jerome Ware, P.A., Attorneys and Counsellors: "Still working. Still committed. Still here to make a difference."
The U.S. Justice Department has just filed a $1 billion civil lawsuit against Bank of America (BOA), alleging that one of its subsidiaries (so to speak), COUNTRYWIDE Mortgage, ran a "brazen" loan-origination mortgage fraud program called "The Hustle". The program allegedly tried to speed up the process of approving loans and selling them off to Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Association).
BOA's (Countrywide's) "Hustle" program, short for "High Speed Swim Lane", eliminated many underwriting reviews even on high-risk loans, cut compliance checks and balances, and brazenly compensated employees solely on volume of mortgage loans and not quality of the loans. Further, the Justice Department's civil complaint alleges, when early signs began showing that many of the loans were rapidly going into default status, BOA (Countrywide) callously ignored the warning signs and did not let Fannie Mae and Freddie Mac know what the bank saw coming with the mushrooming red flags of financial disaster.
It should be noted that this first civil fraud lawsuit brought by the U.S. Department of Justice over mortgage loans sold to Fannie and Freddie and other big mortgage financiers bailed out in 2008 was originally filed by a WHISTLEBLOWER.
We expect other civil fraud suits to be filed against the mortgage industry for selling millions of toxic loans to Fannie and Freddie.
[www.businessweek.com/article/ 2012/10/25/ "The Surprises in the $1 Billion Bank Suit"; uk.reuters.com/article/ 2012-10-25/ "U.S. Sues Bank of America over "Hustle" Mortgage Fraud"; money.cnn.com/ 2012-10-24/ "Bank of America Sue For Alleged Mortgage Fraud"]
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