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Court asked to reconsider reversal of fraud verdict

news-gazette.com | August 7, 2016

NEW YORK (AP) — A federal appeals panel should reconsider its reversal of a fraud verdict against Bank of America Corp. and $1.2 billion penalty resulting from the bank's actions during the 2008 financial crisis, prosecutors say.

Prosecutors filed papers with the 2nd U.S. Circuit Court of Appeals in Manhattan late Thursday saying that a three-judge appeals panel overlooked "a wealth of evidence" that the Charlotte, N.C.-based bank sold thousands of toxic mortgage loans while misrepresenting them as investment quality.

They also cited a recent Supreme Court ruling clarifying the law affecting the fraud case as a reason to reconsider.

In May, the appeals panel reversed a jury's finding that Bank of America and its Countrywide Financial unit committed fraud by misleading government housing agencies Fannie Mae and Freddie Mac in late 2007 and 2008. The ruling vacated a $1.27 billion penalty.

A Bank of America spokesman declined to comment Friday.

In their papers, prosecutors urged the court to at least return the case to the trial judge for a new trial so the government can present evidence and arguments that address the issues that caused the appeals court to reverse the verdict.

The government noted that the four-week trial came after years of investigation as it sought to vindicate public interests in the integrity of the financial system.

The jury found that Countrywide executives deliberately misrepresented the quality of the mortgages that were sold as safe investments. The 2nd Circuit, however, found a "basic deficiency" in proof.

The trial resulted from claims by a former Countrywide employee that a division of Countrywide Home Loans that had specialized in subprime loans acted fraudulently after it transformed itself into a prime origination division after the subprime market collapsed in 2007. The United States later joined the lawsuit.

Prior to the housing collapse, Countrywide was one of many companies selling risky mortgages to Fannie Mae and Freddie Mac.

Bank of America, JPMorgan Chase and other big banks paid out billions in settlements for their roles in the financial crisis.

 

 

 

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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).

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