{"id":434,"date":"2013-03-19T15:44:41","date_gmt":"2013-03-19T15:44:41","guid":{"rendered":"http:\/\/nigeriastandardnewspaper.com\/ng\/?p=434"},"modified":"2013-03-19T15:44:41","modified_gmt":"2013-03-19T15:44:41","slug":"mortgage-fraud-us-drags-bank-of-america-to-courtsell-thousands-toxic-home-loans-americas-dept-of-justice-exposed-scam-involving-fannie-mae-freddie-mac-how-second-largest-us-bank","status":"publish","type":"post","link":"https:\/\/nigeriastandardnewspaper.com\/a\/mortgage-fraud-us-drags-bank-of-america-to-courtsell-thousands-toxic-home-loans-americas-dept-of-justice-exposed-scam-involving-fannie-mae-freddie-mac-how-second-largest-us-bank\/","title":{"rendered":"Mortgage Fraud!  US Drags Bank of America to Court\u2026Sell Thousands Toxic Home Loans  America\u2019s Dept. of Justice exposed Scam involving Fannie Mae, Freddie Mac How Second Largest US bank crashes as highest Mortgage Lender Loses $40 billion on mortgage litigation, related to Merrill Lynch &#038; Co. &#8220;The fraudulent conduct alleged in today&#8217;s complaint was spectacularly brazen in scope. This lawsuit should send another clear message that reckless lending practices will not be tolerated&#8221;- U.S. Attorney Preet Bharara in Manhattan!"},"content":{"rendered":"<p><b>Mortgage Fraud! \u00a0<\/b><b>US Drags Bank of America to Court<\/b><b>\u2026Sell Thousands Toxic Home Loans<\/b><\/p>\n<ul>\n<li><b>America\u2019s Dept. of Justice exposed Scam involving Fannie Mae, Freddie Mac<\/b><\/li>\n<li><b>How Second Largest US bank crashes as highest Mortgage Lender<\/b><\/li>\n<li><b>Loses $40 billion on mortgage\u00a0litigation, related to Merrill Lynch &amp; Co.<\/b> <b><\/b>\n<ul>\n<li><b>&#8220;The fraudulent conduct alleged in today&#8217;s complaint was spectacularly brazen in scope. This lawsuit should send another clear message that reckless lending practices will not be tolerated&#8221;<\/b>&#8211; <b>U.S. Attorney Preet Bharara in Manhattan <\/b><b><\/b><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>\u00a0<a href=\"https:\/\/nigeriastandardnewspaper.com\/a\/wp-content\/uploads\/2013\/03\/Bank-of-America.jpg\"><img loading=\"lazy\" loading=\"lazy\" decoding=\"async\" class=\"alignleft size-thumbnail wp-image-435\" alt=\"Bank of America\" src=\"http:\/\/nigeriastandardnewspaper.com\/ng\/wp-content\/uploads\/2013\/03\/Bank-of-America-150x150.jpg\" width=\"150\" height=\"150\" \/><\/a><\/b><\/p>\n<p><b>BY TOUN MICHAEL\/ <i>DEP. BUSINESS EDITOR<\/i>, MARYLAND, USA<\/b><\/p>\n<p><b>\u00a0<\/b><\/p>\n<p><b>UNITED STATES<\/b> Government under the present administration of President Barack Obama is not taking lightly all elements and compromises of \u2018fraud\u2019 in his government, as the banking industry, particularly Bank of America (BOA) is presently facing a civil lawsuit over glaring activities of thousands toxic home loans allegedly given out, albeit illegally to Fannie Mae and Freddie Mac, which led to the crashing of this largest mortgage lender once referred \u2018America\u2019s second largest bank.\u2019<\/p>\n<p>&nbsp;<\/p>\n<p><b>America\u2019s Dept. of Justice exposed Scam <\/b><\/p>\n<p>According to information at the disposal of<b> <i>Naija Standard<\/i>, <\/b>the United States filed a civil mortgage fraud lawsuit against BOA, accusing it of selling thousands of toxic home loans to Fannie Mae and Freddie Mac that went into default and caused more than $1 billion of losses.<\/p>\n<p>This case originally brought by a whistle-blower, is the U.S. Department of Justice&#8217;s first civil fraud lawsuit over mortgage loans\u00a0sold to Fannie Mae or Freddie Mac.<\/p>\n<p>It also compounds the problems that the BOA, second-largest U.S. bank, has faced since its disastrous 2008 purchase of Countrywide Financial Corp, once the nation&#8217;s largest mortgage lender.<\/p>\n<p><b>Hustle Scheme in the bank<\/b><\/p>\n<p><b><i>Naija Standard<\/i><\/b> gathered that a complaint filed in Manhattan federal court, Countrywide in 2007 invented a scheme known as the &#8220;Hustle&#8221; designed to speed up processing of residential home loans.<\/p>\n<p>Operating under the motto &#8220;Loans Move Forward, Never Backward,&#8221; mortgage executives tried to eliminate &#8220;toll gates&#8221; designed to ensure that loans were sound and not tainted by fraud, the government said.<\/p>\n<p>This resulted in &#8220;defect rates&#8221; that were roughly nine times the industry norm, but Countrywide concealed this from Fannie Mae and Freddie Mac, and even awarded bonuses to staff to &#8220;rebut&#8221; the problems being discovered, it added. The scheme ran through 2009 and caused &#8220;countless&#8221;\u00a0<a title=\"Click to Continue &gt; by Discount Buddy\" href=\"http:\/\/www.nbcnews.com\/business\/u-s-sues-bofa-over-alleged-mortgage-fraud-1C6659874\"><b>foreclosures<\/b><\/a>.<\/p>\n<p><b>US Attorney Restates Position<\/b><\/p>\n<p>Going by U.S. Attorney Preet Bharara in Manhattan said in a statement, he said\u00a0\u00a0\u00a0\u00a0 &#8220;The fraudulent conduct alleged in today&#8217;s complaint was spectacularly brazen in scope. This lawsuit should send another clear message that reckless lending practices will not be tolerated.&#8221;<\/p>\n<p><b>BOA Keeps Mum<\/b><\/p>\n<p>Meanwhile, BOA issued no official statement on this incidence. It is on record that since paying $2.5 billion for Countrywide on July 1, 2008, the Charlotte, North Carolina-based bank has lost nearly $40 billion on mortgage\u00a0litigation and requests by investors to buy back soured loans, Credit Suisse estimated on October 5.<\/p>\n<p>Some of these costs related to Merrill Lynch &amp; Co, which Bank of America bought at the beginning of 2009.<\/p>\n<p><b>Court Records &amp; How US joined Lawsuit<\/b><\/p>\n<p><b><i>Naija Standard<\/i><\/b> learnt through court records that the case had been filed under seal by Edward O&#8217;Donnell, a Pennsylvania resident and former executive vice president at Countrywide Home Loans who had worked there between 2003 and 2009.<b><\/b><\/p>\n<p>The United States later joined the case. It seeks triple damages under the federal False Claims Act, as well as civil penalties. It is unclear whether O&#8217;Donnell has hired a lawyer.<\/p>\n<p>Federal regulators seized Fannie Mae and Freddie Mac on September 7, 2008 and put them into a conservatorship. Bharara&#8217;s office has in the last 1-1\/2 years brought five civil fraud lawsuits against other lenders under the False Claims Act over alleged reckless residential mortgage lending\u00a0mortgage involving loans insured by the<b> <\/b>Federal Housing Administration.<\/p>\n<p>The case is U.S. ex rel. O&#8217;Donnell v. Bank of America Corp et al, U.S, District Court, Southern District of New York, No. 12-01422.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mortgage Fraud! \u00a0US Drags Bank of America to Court\u2026Sell Thousands Toxic Home Loans America\u2019s Dept. of Justice exposed Scam involving Fannie Mae, Freddie Mac How Second Largest US bank crashes as highest Mortgage Lender Loses $40 billion on mortgage\u00a0litigation, related to Merrill Lynch &amp; Co. &#8220;The fraudulent conduct alleged in today&#8217;s complaint was spectacularly brazen [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":435,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[105],"tags":[],"class_list":["post-434","post","type-post","status-publish","format-standard","has-post-thumbnail","category-crime"],"_links":{"self":[{"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/posts\/434","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/comments?post=434"}],"version-history":[{"count":0,"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/posts\/434\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/media\/435"}],"wp:attachment":[{"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/media?parent=434"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/categories?post=434"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nigeriastandardnewspaper.com\/a\/wp-json\/wp\/v2\/tags?post=434"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}