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.Read the rest here.
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.
“The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope,” Preet Bharara, the United States attorney in Manhattan, said in a statement. Mr. Bharara brought the case 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.
Anyone want to take odds on how many people land in prison over this? Banks are the enemy.