California Real Estate Fraud Report

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01
Aug

BofA Fined $1.27 Billion for Countrywide Mortgage Fraud

Bank of America is still paying heavily for fraud by its acquisition Countrywide Financial Corporation that occurred before and during the time U.S. taxpayers were forced to invest $45 billion in TARP (Troubled Asset Relief Program).

U.S. District Judge Jed S. Rakoff ordered BofA to pay a civil penalty of $1.27 billion for the fraud, which was related to low-quality mortgages sold by Countrywide. Bank of America acquired Countrywide in July 2008. In addition, the court ordered former Bank of America executive Rebecca Mairone to pay a civil penalty of $1 million.

The mortgage fraud was with respect to Bank of America’s lending program called “Hustle,” which stood for “High Speed Swim Lane” or “HSSL.” In a nutshell, it was a product line by which the bank created and re-sold a high volume of mortgages at high speed to the GSEs (government-sponsored entities) Fannie Mae and Freddie Mac.

The investigating agency was the Office of the Special Inspector General for TARP (SIGTARP) and was headed by Christy Romero, Special Inspector General for SIGTARP.

Here’s what Romero had to say about HSSL: “Bank of America’s mortgage fraud, uncovered and investigated by SIGTARP and its law enforcement partners, was brazen, but simple.”

“To do so, Bank of America removed critical quality control checks and fraud prevention measures that could have slowed down the origination process, despite repeated warnings that doing so would yield disastrous results, including defaults on the loans”.

“Although Bank of America received $45 billion in TARP funds, American taxpayers’ hard-earned tax dollars and TARP investments were not intended to support mortgage fraud.  All TARP-related crime is unacceptable”.

Read the original article in DSNews.

 

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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