A Wednesday jury decision found Bank of America liable for defective mortgages originated and sold by Countrywide Financial, which it acquired in 2008, that contributed to the economic crisis.
Rebecca Mairone, formerly a top manager at the bank’s Countrywide Financial division, was also found liable for her role in green-lighting bad mortgages and opting for quantity over quality, resulting in a large volume of loans given to unqualified buyers.
“Almost a year to the day after we brought suit, a unanimous jury has found Countrywide, Bank of America, and senior executive Rebecca Mairone liable for making disastrously bad loans and systematically removing quality checks in favor of its own balance,” said Manhattan U.S. Attorney Preet Bharara in a statement on the verdict.
Mairone—currently employed by JPMorgan Chase, which recently agreed to a tentative $13 billion mortgage settlement with the Justice Department—allegedly led a mortgage program nicknamed “hustle” from the acronym HSSL, which stands for high-speed swim lane, according to federal lawyers.
Prosecutors are requesting for Bank of America to pay a $848 million fine, but the penalty will ultimately be decided by Jed Rakoff, the judge presiding over the case, reports the New York Times.
“Countrywide, the troubled mortgage originator that Bank of America bought in 2008, has been a morass of problems,” says the article. “While the bank bought Countrywide for $4 billion in 2008, analysts say they believe it has so far already paid close to $50 billion in fines and settlements. In light of Wednesday’s decision, that figure is likely to rise.”
Read more at the New York Times.
Written by Alyssa GeracePrint Article