Via LearnVest By Julia La Roche for Business Insider ~
This post originally appeared on Business Insider.
The complaint alleges that Countrywide allegedly started a fraudulent mortgage origination program called the “Hustle,” which was “designed to sell defective loans” to Fannie and Freddie, the release said.
When BofA acquired Countrywide in 2008 during the financial crisis that “Hustle” program allegedly continued, according to the release.
From the release (emphasis ours):
Specifically, the Complaint alleges that from at least 2007 through 2009, COUNTRYWIDE, and later BANK OF AMERICA after acquiring COUNTRYWIDE in 2008, implemented a new loan origination process called the “Hustle,” which was intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans sold to Fannie Mae and Freddie Mac that later defaulted, causing over $1 billion dollars in losses and countless foreclosures.
“As alleged, through a program aptly named ‘the Hustle,’ Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill. As described, Countrywide and Bank of America systematically removed every check in favor of its own balance – they cast aside underwriters, eliminated quality controls, incentivized unqualified personnel to cut corners, and concealed the resulting defects. These toxic products were then sold to the government sponsored enterprises as good loans. This lawsuit should send another clear message that reckless lending practices will not be tolerated,” Bharara said in a statement.
Shares of BofA were last up around 0.85% in mid-day trading.
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