Certified Forensic Loan Auditors, LLC

  Upcoming Classes

Search CFLA's Article Archive:

Bank of America Disputes Massive Mortgage Fraud Penalties

finance.yahoo.com | February 27, 2014

By Jessica Dye

NEW YORK (Reuters) - Bank of America Corp (BAC) said it does not owe the U.S. government the $2.1 billion it is seeking in penalties after a jury found the bank liable for fraud over defective mortgages sold by its Countrywide unit, according to a court filing made on Wednesday.

Lawyers for the bank said the government's request "contradicts every pertinent legal principle" and called it a "dramatic departure from reality," the filing stated. Bank of America said in the filing that it should only have to pay the amount it made in profit from selling the loans, which it contended was zero.

A spokesman for the U.S. attorney's office in Manhattan declined to comment. A spokesperson for Bank of America could not be reached for comment Wednesday evening.

A federal jury in New York in October found Bank of America and Rebecca Mairone, a former mid-level executive at Countrywide, each liable for fraud in the civil lawsuit.

The case focused on a mortgage lending process at Countrywide, which Bank of America acquired in July 2008, called the "High Speed Swim Lane," or alternatively "HSSL" or "Hustle."

The government contended that Countrywide's program emphasized and rewarded employees for the quantity rather than the quality of loans produced and eliminated checklists designed to ensure that loans were sound.

Bank of America and Mairone denied wrongdoing. Bank of America has said it was evaluating options for an appeal.

Any penalty would be assessed by U.S. District Judge Jed Rakoff.

Prosecutors initially asked for $863.6 million, but later raised the amount to $2.1 billion.

In its response on Wednesday, Bank of America said that the U.S. government erred by basing the proposed penalty on its gross "gain" from the loans. Instead, the law requires the penalty amount to be calculated by measuring the bank's "pecuniary gain," or amount of profit that it made from selling the materially defective HSSL loans, the bank said. It estimated that amount to be zero, according to the filing.

Oral arguments have been set for March 13.


Back to February 2014 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
BBB Logo


Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:


DVD Sets Only $99


FREE Mortgage Fraud Analysis


Order Cutting-Edge Services Now


Quiet Title Packages from Licensed Attorneys


Affiliate Services


CFLA Sponsored Attorney Links


Take-Home Education Package