California Real Estate Fraud Report

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US DOJ Sues Bank of America for $1 Billion in Losses Due to Mortgage Fraud

Ramping up an aggressive stance against mega-banks whose lending practices caused billions of dollars of losses to the taxpayer through Fannie Mae and Freddie Mac, the US Department of Justice has filed suit against Bank of America for $1 billion due to mortgage fraud. Fannie Mae and Freddie Mac are large financial institutions, backed by the federal government, that purchase loans from banks in the secondary market.

The U.S. Attorney for the Southern District of New York filed the suit. Its target is the “Hustle” loan program that originated with Countrywide Financial but was taken over when Bank of America purchased Countrywide in 2008. “Hustle” loans were named for Countrywide’s “High-Speed Swim Lane” (HSSL) program that was created ostensibly to streamline loans. U.S. Attorney Preet Bharara’s office charges that HSSL was “intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans.”

Read more about this landmark lawsuit on CNN and the press release for the U.S. Attorney for the Southern District of New York website.

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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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