Bank of America loses fraud trial over U.S. mortgages

NEW YORK Wed Oct 23, 2013 3:41pm EDT

NEW YORK Oct 23 (Reuters) - Bank of America Corp was found liable for fraud on Wednesday on claims related to defective mortgages sold by its Countrywide unit, a major win for the U.S. government in one of the few big trials stemming from the financial crisis.

Following a four-week trial, a federal jury in Manhattan found the Charlotte, North Carolina bank liable on one civil fraud charge in connection with shoddy home loans that the former Countrywide Financial Corp sold to Fannie Mae and Freddie Mac and originated in a process called "Hustle."

The four men and six women on the jury also found a one-time Countrywide executive, Rebecca Mairone, liable on the one fraud charge facing her.

A decision on how much to penalize the bank would be left to U.S. District Judge Jed Rakoff. The U.S. Department of Justice has said it would ask Rakoff to award up to $848.2 million, the gross loss it said Fannie and Freddie suffered on the loans.

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Comments (4)
obsessed wrote:
Don’t worry – congress will appropriate BofA some bailout cash to pay the fine

Oct 23, 2013 3:55pm EDT  --  Report as abuse
FranInCalif wrote:
I wish I thought the BofA execs who created this mess will suffer the consequences of their actions, but knowing BofA, it will be the small depositors, cc customers, and newest hires.

Oct 23, 2013 6:17pm EDT  --  Report as abuse
Alan8 wrote:
Bank executives (that contribute to political campaigns) are above the law, and will never be criminally charged for their crimes.

Just like Bush-Administration torturers and brutal cops.

Yet another reason I vote Green Party.

Oct 24, 2013 9:38am EDT  --  Report as abuse
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