US sued Bank of America over alleged mortgage fraud

Wed Oct 24, 2012 12:23pm EDT

Oct 24 (Reuters) - The United States on Wednesday filed a civil mortgage fraud lawsuit against Bank of America Corp , accusing it of deliberately generating and then selling thousands of toxic home loans that later defaulted to Fannie Mae and Freddie Mac.

U.S. Attorney Preet Bharara in Manhattan said in a statement that the sales had resulted in more than $1 billion of losses and "countless" foreclosures. He said the case is the U.S. Department of Justice's first civil fraud lawsuit over mortgage loans sold to Fannie Mae or Freddie Mac.

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Comments (1)
Arpedalot wrote:
Government to banks: “Make buying a home easier so more “minorities” can be home owners”.
Banks response: “Are you crazy, we can’t give out loans to people who can’t afford to pay back the loans.”
Government to banks: “Don’t worry about it, we will guarantee the loans with Freddie and Fannie.”
Banks response: Make “questionable loans and sell those loans to Freddie and Fannie as per the direction of the federal government.
Governments response: Sue the banks for selling them what they asked for.

Oct 24, 2012 12:35pm EDT  --  Report as abuse
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