Thursday, October 24, 2013

Bank of America loses fraud trial over shoddy mortgages

People can go to jail for stealing a loaf of bread, but these bankers stole huge amounts of money, and get bonuses. The companies may have to pay fines and restitution, but the money comes out or workers salaries, and shareholder dividends, if they give dividends.

Nate Raymond
Oct. 23, 2013

Bank of America was found liable for fraud on Wednesday over defective mortgages sold by its Countrywide unit, a major win for the U.S. government in one of the few trials stemming from the financial crisis.

After a four-week trial, a federal jury in New York found the bank liable on one civil fraud charge. Countrywide originated shoddy home loans in a process called "Hustle" and sold them to government mortgage giants Fannie Mae and Freddie Mac, the government said.


The government continues to investigate banks for conduct related to the financial crisis. The verdict comes as the government is negotiating a $13 billion settlement with JPMorgan Chase to resolve a number of probes and claims arising from its mortgage business, including the sale of mortgage bonds.

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