BofA Sued By US Over Mortgage Fraud

This one is hot off the presses, and we’ll be learning more as the days come. On Wednesday it was announced that, in a civil mortgage fraud lawsuit, the US is accusing Bank of America of “selling thousands of toxic home loans to Freddie Mac and Fannie Mae that went into default and caused more than $1 billion in losses.” On top of civil penalties, the US is seeking triple damages under the Federal False Claims Act. This marks the US’s first civil fraud lawsuit over Freddie and Fannie mortgage loans, and was originally brought forward by a whistleblower. This is yet another problem for BofA, already reeling from it’s disastrous purchase of Countrywide Financial in 2008. Countrywide was involved in a “hustle” scheme to speed up residential home loan processing, resulting in defect rates at 9x the industry norm.

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