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DOJ seeks $1B in Bank of America mortgage fraud lawsuit

personalmoneynetwork.com | November 5, 2014

The government alleges in a $1 billion case that B of A and the previous Countrywide, absorbed into Bank of America, sold mortgage fraudulently to Fannie Mae and Freddie Mac. The Bank of America mortgage fraud lawsuit is not the first the financial institution has had to handle, nor likely will it be the very last.

Paying more after buy

Countrywide is a mortgage lender that B of A purchased when it went under during the recession. It is one of the mortgage corporations that were known for making a ton of monetary blunders. Bank of America has been dealing with a lot of lawsuits because of the things the business did.

Countrywide sold a ton of loans to Freddie Mac and Fannie Mae, which is why another suit from the United States Lawyer of Manhattan is requesting $1 billion in problems from the bank. Evidently, there was a lot of mortgage fraud that occurred during that time, according to the New York Times.

Hustle and flow

The B of A mortgage fraud lawsuit states that before and after Countrywide had been acquired and absorbed into the business, a program known as “High Speed Swim Lane,” according to the Washington Post, or “HSSL” or “hustle” was in place that essentially put mortgage loans on the fast track to federal backing without properly vetting the mortgage loans.

In essence, the program is claimed to have encouraged Countrywide and later B of A employees to overlook the standard of the mortgages, skipping a verification of the borrower's income or falsifying data and giving bonuses to workers who could get the most mortgages lent. The program, according to USA Today, is said to have lasted from 2007 to 2009, after Countrywide had been fully absorbed.

One applicant, in Miami, was said to be earning $15,500 per month but was later found to really be making $2,666 per month, and wound up defaulting in seven months. Another applicant's $81,000 in debt was not disclosed in documents and received a mortgage they defaulted on within a year. Fannie and Freddie didn't vet the mortgage loans before purchasing, relying on Countrywide and later Bank of America's word.

The government has the right to sue considering Fannie and Freddie are essentially 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 claims all allegations are false while people are no longer in the homes they bought.

 

Back to November 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).

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