The mortgage finance sector had a lot to do with the financial; meltdown of the past few years. As a result, there have been and will continue to be suits seeking to undo some of the damage. A recently-filed B of A mortgage fraud suit was filed by the government, seeking $1 billion in problems from fraudulently sold mortgages.
Punishing Bank of America for purchase
When Countrywide was still its own business, it made a lot of monetary mistakes that caused lots of people to want to sue. The company went under in 2008 when the recession hit and had to be bought by Bank of America. Now, B of A is dealing with all the suits that Countrywide faced.
Another such lawsuit has just been filed by the U.S. Lawyer of Manhattan, according to the New York Times, claiming mortgage fraud in a number of loans that Countrywide sold to federally owned but privately-run mortgage insurance houses Fannie Mae and Freddie Mac. The Bank of America mortgage fraud suit seeks $1 billion in damages.
Fast track to federal backing
The suit suggests that Countrywide had a program called "High Speed Swim Lane" that would get federal backing for the loans in spite of the fact that they were not vetted properly. This all occurred before Bank of America acquired the company supposedly.
USA Today explained that the program lasted from 2007 to 2009, according to USA Today, which suggests that it stayed in place after Bank of America took on the company. The idea is that the program would skip verification of the borrower's income and would falsify information to be able to give workers bonuses for getting mortgage loans.
Fannie and Freddie's job does not entail vetting the loans, which is why the bank is responsible for it. There was one loan made to someone who only made $2,666 per month, though the application said the individual was making $15,500 a month. Within seven months, the individual defaulted. Another person defaulted within a year after failing to disclose $81,000 in debt.
'Simply false'
Since Freddie Mac and Fannie Mae have essentially been placed under government conservatorship, the Justice Department is, by virtue of the Bank of America mortgage fraud suit, planning to reclaim $1 billion in losses incurred by the "hustle" program. The Justice Department also contends that the mortgage loans sold under the "hustle" program should have been repurchased, but Bank of America failed to do so.
A number of people who bought homes with the loans have been foreclosed on, though B of A denies any wrongdoing. A 2008 study found that 57 percent of homeowners were in the program and defaulted, according to USA Today.
Punishing Bank of America for purchase
When Countrywide was still its own business, it made a lot of monetary mistakes that caused lots of people to want to sue. The company went under in 2008 when the recession hit and had to be bought by Bank of America. Now, B of A is dealing with all the suits that Countrywide faced.
Another such lawsuit has just been filed by the U.S. Lawyer of Manhattan, according to the New York Times, claiming mortgage fraud in a number of loans that Countrywide sold to federally owned but privately-run mortgage insurance houses Fannie Mae and Freddie Mac. The Bank of America mortgage fraud suit seeks $1 billion in damages.
Fast track to federal backing
The suit suggests that Countrywide had a program called "High Speed Swim Lane" that would get federal backing for the loans in spite of the fact that they were not vetted properly. This all occurred before Bank of America acquired the company supposedly.
USA Today explained that the program lasted from 2007 to 2009, according to USA Today, which suggests that it stayed in place after Bank of America took on the company. The idea is that the program would skip verification of the borrower's income and would falsify information to be able to give workers bonuses for getting mortgage loans.
Fannie and Freddie's job does not entail vetting the loans, which is why the bank is responsible for it. There was one loan made to someone who only made $2,666 per month, though the application said the individual was making $15,500 a month. Within seven months, the individual defaulted. Another person defaulted within a year after failing to disclose $81,000 in debt.
'Simply false'
Since Freddie Mac and Fannie Mae have essentially been placed under government conservatorship, the Justice Department is, by virtue of the Bank of America mortgage fraud suit, planning to reclaim $1 billion in losses incurred by the "hustle" program. The Justice Department also contends that the mortgage loans sold under the "hustle" program should have been repurchased, but Bank of America failed to do so.
A number of people who bought homes with the loans have been foreclosed on, though B of A denies any wrongdoing. A 2008 study found that 57 percent of homeowners were in the program and defaulted, according to USA Today.
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