California Real Estate Fraud Report

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26
May

BofA $1.3 Billion ‘Hustle’ Judgment Tossed by Appeals Court

Manhattan U.S. Attorney Preet Bharara suffered a stunning loss as the Second Circuit Court of Appeals reversed a jury’s finding that a unit of Bank of America committed fraud by selling lower-quality mortgages on government-sponsored Fannie Mae and Freddie Mac to investors.

The upshot of Bush appointee Circuit Court Judge Richard Wesley‘s ruling is that the 2013 jury verdict holding BofA liable and the imposition of a $1.27 billion penalty has been tossed. So has the $1 million penalty against BofA  executive Rebecca Mairone, who oversaw the creation of the “Hustle” program, which sped up loan processing. Bharara had alleged that the “Hustle,” an acronym for the “High Speed Swim Lane” program, had been generated by Countrywide out of defective loans that were re-sold to unwitting investors.

The reasoning of both the judge and the defense attorneys was that the government had at most proved breach of contract and not fraud.

The case is U.S. v. Countrywide Home Loans Inc., 15-496, U.S. Court of Appeals for the 2nd Circuit (New York).

Read the original articles in Bloomberg and the New York Post.

© Copyright 2007-2017 Monique Bryher

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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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