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Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

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Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

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FCPA Blog Daily News

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Thursday
Jul312014

BofA fined $1.27 billion for Countrywide mortgage fraud

Judge Jed Rakoff of the U.S. district court in New York on Wednesday ordered Bank of America to pay a $1.27 billion fine for fraud perpetrated by Countrywide Financial Corp., a mortgage company the bank acquired in 2008.

In October, a jury decided that Bank of America was liable for the bad loans Countrywide sold to Fannie Mae and Freddie Mac as part of its mortgage-lending program during the housing market collapse in 2007-08.

In his ruling, Judge Rakoff said:

"It was from start to finish the vehicle for a brazen fraud by the defendants, driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system as a whole."

Fannie Mae and Freddie Mac paid nearly $3 billion when they bought the bad loans. The  government had sought penalties of $2.1 billion from BofA. The judge noted that not all of the loans were bad so the damages reflected that compromise.

In his ruling, Judge Rakoff also imposed a fine of $1 million on Rebecca Mairone, a former top Countrywide manager. The jury in October had found her guilty of one count of fraud.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.