Feds Sue Bank Of America Over Mortgage Program

Feds Sue Bank Of America Over Mortgage Program

dealbook.nytimes.com

Federal prosecutors in New York sued Bank of America on Wednesday, accusing it of carrying out a mortgage scheme that defrauded the government during the depths of the financial crisis.

In a civil complaint that seeks to collect $1 billion from the bank, the Justice Department took aim at a home loan program known as the “hustle,” a venture that has become emblematic of the risk-fueled mortgage bubble. The complaint adds to a flurry of federal and private lawsuits facing Bank of America’s beleaguered mortgage business.

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To the 99%, anonymous, the occupy wall street etc....
Here it comes...
What many have been waiting for for a long long time.
While It may not be a huge lawsuit for a bank, at least it's a step in the right direction.

"In order to increase the speed at which it originated and sold loans ... Countrywide eliminated every single checkpoint on loan quality and compensated its employees solely based on the volume of loans originated," the lawsuit, filed in Manhattan federal district court, alleges.

This led to "rampant instances of fraud and other serious loan defects," all while Countrywide was telling Fannie Mae and Freddie Mac, which buy up mortgages for resale, that it had strengthened its lending requirements, the lawsuit claims.

When the loans "predictably" defaulted, Fannie and Freddie, which in 2008 required a massive taxpayer bailout due in large part to the purchase of toxic mortgages, incurred more than $1 billion in losses, the lawsuit alleges.

The mortgage scheme, called the "High Speed Swim Lane" or the "Hustle," for short, continued through 2009, well after Bank of America acquired Countrywide, according to the lawsuit.



dealbook.nytimes.com
(visit the link for the full news article)

reply to post by hotbread


Isn't the Fed and Bank of America own by the same cabal? Or am I delusional?

Originally posted by hotbread

Feds Sue Bank Of America Over Mortgage Program

Pot, meet kettle.

That is all fine and well, but what happens for the people who were lied to and told they could and should buy a house?

I am mortgaged through BoA today after they bought my Countrywide loan. My husband and I knew better, we did really, but they told us we would be fine to get the loan we did. They made it so easy. It was all over the phone business and my real estate agent did all of the talking for us. All we had to do was pick out the house and sit at the table and sign the papers. ( First time buyers with $6000.00 down.)

Now after paying for 5 years we are still owing more than the house is worth. I refuse to foreclose so we do all we can to keep the payments paid. (By the way, we don't qualify for the lower interest government help program! What a joke that is.)

Anyhow, US is suing the bank, yay, but what do the people get from it?

Originally posted by Doodle19815


Anyhow, US is suing the bank, yay, but what do the people get from it?

ITs not the US, its the FED, the fed is a privately owned central bank, it is not owned by the US government.

So its one crook who is actively defrauding the US, suing another crook, for defrauding them...

The people as always get screwed.

reply to post by benrl


Thank you for clarifying for me. I couldn't agree more, the money just changes hands. I am sure they will settle and we will hear nothing else from it.

Well now. One billion. That says it all.

How much money does this bank of america receive annually in subsidies, one billion, several billions, more than ten billion? What is the point of a costly court show when the subsidies can simply be withheld?

By the way, was in not this bank of america that transferred tens trillions of risky derivatives to one of its fdic protected deposit-taking entities last year, insuring that the burden of losses is covered by the us taxpayers.

Is there no justice.

Originally posted by benrl

Originally posted by Doodle19815


Anyhow, US is suing the bank, yay, but what do the people get from it?

ITs not the US, its the FED, the fed is a privately owned central bank, it is not owned by the US government.

So its one crook who is actively defrauding the US, suing another crook, for defrauding them...

The people as always get screwed.

edit on 24-10-2012 by benrl because: (no reason given)

its interseting to note,
BOA is a federally chartered corporation,

guess who pays the bill?

xploder

I know someone who actually works this job. The gub takes rreesaalllllllllllyyyyy good care of the employees. Unimaginably good.

To think BofA actually got $45 billion in taxpayer TARP funds...... Hmmm...The allegations assert misrepresentations made by B of A before and DURING the TARP funds disbursement. Wow!! Funny to see the FEDS now suing them.

Welcome to the High Speed Swim Lane.. (Hustle program) Rapid loan processing without quality checkpoints....

Imagine building a car like that...oops GM already does..

The Fed is a quasi-government organisation - het government appoints the people who run it, and mandate that other banks have to "buy" shares which give them no say and a set 6% return - the rest of the Fed profit goes to eth Govt - andh te Govt gets, IIRC, about 85% of hte profit.

A Federal chaerter for the BOA is nto teh same as the Govt owning it! It says the BOA is authorised to operate as a bank nationwide, as opposed to a State charter which would only allow it to operate as a bank within the issuing state. Charters aeer much the same way your drivers licence says you are authorised to drive a car (or truck or moterbike or whatever) - only there is no federal drivers licence (AFAIK)

Wow now thats interesting~

Nice to see the actions being taken by those sworn to protect.

Whatever the reason - this is the right direction!

very timely and relevant thread here too: Spire Law Group sues bankers for trillions

∞LOVE
mayallsoulsbefree∞

Guess what, if they get Romney in the white house this lawsuit will disappear.

Obama's admin has been quietly going after the bankers who defrauded our nation. For no other reason, this is why he should be re-elected.

Perseverance is the wedge forcing 'their' hedge to the edge of the ledge of truth & justice~

'They' will get whats 'theirs'...as we get whats ours!
**because what is 'theirs', we no longer want - and what is our 'they' no longer have**

BELIEVE

∞see the chain of events dredging the concealed so as to reveal∞

Feds Sue Bank Of America Over Mortgage Program

Major Banks, Governmental Officials and Their Comrade Capitalists Targets of Spire Law Group, LLP's

CNBC Exec’s Children Murdered; 1 Day After CNBC Reports $43 Trillion Bankster Lawsuit

A Message to to the U.S. Military - and You!

∞LOVE
mayallsoulsbefree∞

See this is continuing ~

This is happening around the world...surprising the Romanians do justice for 28.5 mil, while the westerners are still scheming in the billions, maybe trillions!

Their trail has came to an end and caught them!

'Romanians capture banksters'

∞LOVE
mayallsoulsbefree∞

So everyone who has a credit card through BOA can expect an increase in their interest rate shortly. That was probably a loophole that was addressed.

Hold on, folks. Let's be crystal clear here.

Countrywide Mortgage was the perpetrator of the mortgage fraud. When Bank of America took over Countrywide, yes, some of these practices by Countrywide employees would have continued for a short time, but Bank of America -- once they took over -- promptly stopped these practices.

Countrywide is to blame. Bank of America had the unfortunate task of being blackmailed into purchasing Countrywide as a national financial emergency unfolded during the 2008-2009 financial crisis. They have had the unfortunate task of cleaning up the toxic mortgage mess left behind by Countrywide, losing upwards of $30 billion for settling lawsuits stemming directly from Countrywide's past actions.

So, please, give credit where credit is due. Bank of America is not the problem. Countrywide was the perpetrator of these bogus toxic mortgages, and Bank of America is simply the maintenance and janitorial crew that gets to pick through all the dirty trash, garbage, and bottles after the party is over. Worse yet, Bank of America gets blamed by the press --- and sued by the government -- in the process.

It's a huge fiasco. No other bank was large enough to try to take on the Countrywide mess. Chase might have been the only other bank that had the breadth and number of employees to manage the unwinding of Countrywide. Bank of America has taken these losses from Countrywide on the chin, and been labelled in the press as the bad guy.

Meanwhile, Mozillo, Countrywide's prior CEO, was not prosecuted. No jail time.

Personally, given the timing of the lawsuit, I believe this is a political stunt just before the election. The feds could have brought this lawsuit years ago. They want to show they are "tough" on the banks before the election, and the scapegoat and whipping boy right now is Bank of America.