Certified Forensic Loan Auditors, LLC

  Upcoming Classes

Search CFLA's Article Archive:

Government opposes Bank of America appeal in 'Hustle' case

charlotteobserver.com | July 26, 2015

By Deon Roberts

A federal appeals court should not overturn a judge’s ruling that Bank of America pay $1.27 billion in penalties for defective mortgages sold in Countrywide Financial Corp.’s now-defunct “Hustle” program, the U.S. government says.

On Wednesday, the government filed its opposition to Bank of America’s appeal of the penalties the federal judge imposed on it last year in the three-year-old case. The Charlotte bank was ordered to pay the penalties after a jury in 2013 found Countrywide Financial liable for knowingly selling bad home loans to mortgage giants Fannie Mae and Freddie Mac.

In February, the judge who ruled the bank should pay the penalties, Jed Rakoff in Manhattan, denied the lender’s request to overturn the jury’s verdict. Bank of America, which has said the Hustle program ended before it bought Countrywide in 2008, appealed that decision in April.

Former Countrywide executive Rebecca Mairone, who was also found liable by the jury and ordered to pay a penalty of $1 million, is also appealing. Mairone was chief operating officer for the Countrywide division over the Hustle program.

In its filing Wednesday, the government says evidence shows Countrywide committed fraud by selling thousands of “defective and risky” loans it misrepresented as “quality” investments.

Arguments by the bank and Mairone that they shouldn’t be held liable have no merit, the government says. In its argument supporting the fines, the government says they are allowed under a federal law authorizing it to seek civil penalties from whoever violates criminal fraud statutes in a way that “affects” financial institutions.

“As the evidence showed, Countrywide and Mairone committed just such frauds,” the government says.

Bank of America, in its April appeal, says the case was handled unfairly from “beginning to end” and the trial was “riddled with errors at both the liability and penalty phases.”

The bank says the case was allowed to go to trial despite a mismatch between the government’s allegations and the federal law it used in the case. Also, allegations in the case consist exclusively of breaches of contract and, therefore, could not give rise to fraud claims, the bank says.

Bank of America has also said that the federal law the government used in the case allows a civil penalty of no more than $1.1 million “as a general rule.”

The Hustle case marked the first civil fraud case brought by the Department of Justice over mortgage loans sold to Fannie Mae or Freddie Mac. The lawsuit originated from Countrywide whistleblower Edward O’Donnell.


Back to July 2015 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.

International Bloomberg Securitization Audits


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