Bank of America Corp’s Countrywide unit placed profits over quality in a “massive fraud” selling shoddy mortgages to Fannie Mae and Freddie Mac, a U.S. government lawyer said on Tuesday.

Nate Raymond, Reuters

Countrywide "Hustler" Rebecca Mairone
Countrywide “Hustler” Rebecca Mairone

The claim came at the start of the first case by the government to go to trial against a major bank over defective mortgage practices leading up to the 2008 financial crisis.

Pierre Armand, a lawyer in the civil division of the U.S. Attorney’s Office in Manhattan, said Countrywide made $165 million selling loans that it promised were investment quality to Fannie and Freddie.

“What documents and witnesses will show is that the promise of quality was largely a joke,” Armand said.

But Brendan Sullivan, a lawyer for Bank of America, said Countrywide had sought to ensure the loans it made were good and that no fraud occurred.

“No fraud,” he said. “Two words. That’s the heart and soul and body of the defense. No fraud. And that’s what the evidence will show.”

Read more here

Also see: Why Is Jamie Dimon Doing The Hustle With The Countrywide “Hustler”?

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