The government states in a $1 billion lawsuit that B of A and the previous Countrywide, absorbed into B of a, sold mortgage fraudulently to Fannie Mae and Freddie Mac. The B of A mortgage fraud lawsuit is not the first the financial institution has had to handle, nor likely will it be the very last.
Punishing B of A for purchase
One of the most egregious actors in the misdoings of the mortgage finance sector is generally held to be Countrywide, which imploded and ultimately had to be purchased by B of A. Since then, Bank of America has been slapped with numerous lawsuits related to the misdeeds of the 2008 addition to the bank's mortgage division.
Countrywide sold a ton of loans to Freddie Mac and Fannie Mae, which is why another suit from the United States Attorney of Manhattan is requesting $1 billion in damages from the bank. Evidently, there was a lot of mortgage fraud that occurred during that time, according to the New York Times.
Program the greatest issue
The lawsuit suggests that Countrywide had a program called "High Speed Swim Lane" that would get federal backing for the loans despite the belief that they were not vetted properly. This all occurred before B of A acquired the company supposedly.
The program is alleged to have paid workers bonuses if they were willing to overlook quality of the mortgage and skip verification of income. They were even encouraged to falsify info if it meant giving out mortgages. According to USA Today, the program is suspected of happening from 2007 to 2009, well after Bank of America took over the business.
There was a borrower that defaulted within a year when $81,000 in debt was not disclosed on the loan documents. Another borrower was only making $2,666 per month but had written on the loan application $15,500 per month. That person defaulted in seven months. It is the bank's job to make sure all the information is right because that is not Fannie and Freddie's job.
Lies over it
Since Fannie Mae and Freddie Mac have essentially been placed under government conservatorship, the Justice Department is, by virtue of the B of A mortgage fraud suit, seeking to reclaim $1 billion in losses incurred by the "hustle" program. The Justice Department also contends that the mortgage loans sold under the "hustle" program should have been repurchased, but Bank of America unsuccessful to do so.
According to USA Today, a 2008 study showed that 57 percent of homeowners in the program defaulted, and there were a lot in the program. The bank claims all allegations are false while people are no longer in the homes they bought.
Punishing B of A for purchase
One of the most egregious actors in the misdoings of the mortgage finance sector is generally held to be Countrywide, which imploded and ultimately had to be purchased by B of A. Since then, Bank of America has been slapped with numerous lawsuits related to the misdeeds of the 2008 addition to the bank's mortgage division.
Countrywide sold a ton of loans to Freddie Mac and Fannie Mae, which is why another suit from the United States Attorney of Manhattan is requesting $1 billion in damages from the bank. Evidently, there was a lot of mortgage fraud that occurred during that time, according to the New York Times.
Program the greatest issue
The lawsuit suggests that Countrywide had a program called "High Speed Swim Lane" that would get federal backing for the loans despite the belief that they were not vetted properly. This all occurred before B of A acquired the company supposedly.
The program is alleged to have paid workers bonuses if they were willing to overlook quality of the mortgage and skip verification of income. They were even encouraged to falsify info if it meant giving out mortgages. According to USA Today, the program is suspected of happening from 2007 to 2009, well after Bank of America took over the business.
There was a borrower that defaulted within a year when $81,000 in debt was not disclosed on the loan documents. Another borrower was only making $2,666 per month but had written on the loan application $15,500 per month. That person defaulted in seven months. It is the bank's job to make sure all the information is right because that is not Fannie and Freddie's job.
Lies over it
Since Fannie Mae and Freddie Mac have essentially been placed under government conservatorship, the Justice Department is, by virtue of the B of A mortgage fraud suit, seeking to reclaim $1 billion in losses incurred by the "hustle" program. The Justice Department also contends that the mortgage loans sold under the "hustle" program should have been repurchased, but Bank of America unsuccessful to do so.
According to USA Today, a 2008 study showed that 57 percent of homeowners in the program defaulted, and there were a lot in the program. The bank claims all allegations are false while people are no longer in the homes they bought.
About the Author:
How many times have you needed more info on where can i get a payday loan and turned to an internet search on payday loans?" Look no further, all of the info you'll need is at MatchFinacial.com.
No comments:
Post a Comment