BANK of America was found liable for fraud at trial yesterday, as part of a case over its Countrywide arm’s sale of defective mortgages dating back to the financial crisis.
A New York jury found that Countrywide, which was bought by Bank of America in 2008, was liable for one charge of civil fraud. The US government had accused Countrywide of defrauding Fannie Mae and Freddie Mac by selling them bad loans, for which the approval process had been deliberately hurried in a process called the “hustle”.
The US department of justice claims that Fannie and Freddie lost $848.2m (£524.6m) over the loans, and is asking for a financial penalty of that size to be levied against Bank of America.
Earlier in the week, Brendan Sullivan a lawyer for Bank of America denied that the government had produced evidence confirming that Countrywide committed any fraud, saying: “We’ve been dragged down the rabbit hole into Alice and Wonderland.”
A former Countrywide executive, Rebecca Mairone, was also found liable of one charge of fraud by the jury.