Wednesday, October 24, 2012
Another suit against Bank of America
This one from the US attorney's office in Manhattan along with the inspector general of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, and the government watchdog for the bank bailout program.
Federal prosecutors in New York sued Bank of America on Wednesday, accusing the giant bank of carrying out a mortgage scheme that defrauded the government during the depths of the financial crisis.Not to worry though. This is a civil suit so nobody will go to jail. And US Attorney Preet Bharara should be known as "Old 10 Cents On The Dollar Preet" for his amazing ability to craft exceedingly light settlements. That's why the complaints always seek huge sums. Sure looks like they are doing something, doesn't it?
In a civil complaint that seeks to collect $1 billion in damages from the bank, the Justice Department took aim at a home loan program known as the “hustle,” a venture that Bank of America inherited with its purchase of Countrywide Financial during the crisis. Prosecutors say the effort, created in 2007 but kept alive through 2009 by Bank of America, was designed to churn out mortgages at a rapid pace without proper checks on wrongdoing. The bank then sold the “defective” loans to Fannie Mae and Freddie Mac, the government-controlled housing giants, which were stuck with heavy losses and a glut of foreclosed properties.
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