Court Throws Out $1.3 Billion Fine Against BofA Over Mortgages
A federal appeals court on Monday overturned a $1.27 billion fine against Bank of America over loans by mortgage giant Countrywide Financial, which B of A acquired in 2008.
The appeals court said in a 30 page opinion that prosecutors failed to prove that Countrywide committed fraud when it made loans through its "Hustle" mortgage program.
The U.S. Justice Department had sued the company and an executive, Rebecca Mairone, in 2013. The government argued that Countrywide lied about the quality of mortgages it sold to government-sponsored mortgage companies Fannie Mae and Freddie Mac. Three years ago, a jury found the bank guilty.
But the 2nd Circuit Court of Appeals in New York overturned the verdict and threw out the fine, ruling there was insufficient evidence to prove that Countrywide committed mail and wire fraud.
Countrywide's "Hustle" program began after a reorganization in 2007 aimed at speeding up loan processing. Internally, it was called the "High Speed Swim Lane," or "HSSL" - which employees pronounced "Hustle."
A Bank of America spokesman said Monday: "We are pleased with the appellate court's decision."
Aug. 14, 2014, WFAE.org, "Judge Orders Bank of America To Pay $1.3 Billion Fine"