Even After Verdict Defiant BofA Execs & Mairone Still Plead Innocence
Nate Raymond, Reuters
Bank of America Corp 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 four men and six women on the jury also found former Countrywide executive Rebecca Mairone liable on the one fraud charge she faced.
The U.S. Justice Department has said it would seek up to $848.2 million, the gross loss it said Fannie and Freddie suffered on the loans. But it will be up to U.S. District Judge Jed Rakoff to decide on the penalty. Arguments on how the judge will assess penalties are set for December 5.
Any penalty would add to the more than $40 billion Bank of America has spent on disputes stemming from the 2008 financial crisis.
“The jury’s decision concerned a single Countrywide program that lasted several months and ended before Bank of America’s acquisition of the company,” Bank of America spokesman Lawrence Grayson said. “We will evaluate our options for appeal.”