Government sues Bank of America for $1 bn over mortgage frauds
Oct 24, 2012
Federal prosecutors sued Bank of America for $1 billion on Wednesday, alleging that the bank's former Countrywide unit concocted a mortgage scheme it called the "Hustle" in order to sell thousands of fraudulent and otherwise defective mortgage loans to Fannie Mae and Freddie Mac....
When the loans "predictably" defaulted, Fannie and Freddie, which in 2008 required a massive taxpayer bailout due in large part to the purchase of toxic mortgages, incurred more than $1 billion in losses, the lawsuit says.
The mortgage scheme continued through 2009, well after Bank of America acquired Countrywide, according to the lawsuit.
Bank of America did not immediately respond to a request for comment.