The government has been cracking down lately against mortgage fraud in the housing finance industry, slapping enormous firms with massive suits. A recently-filed Bank of America mortgage fraud suit seeks $1 billion in problems for toxic loans sold to Fannie Mae and Freddie Mac.
Bank of America mortgage fraud suit a consequence of getting Countrywide
When Countrywide was still its own business, it made a lot of monetary mistakes that brought on many people to want to sue. The company went under in 2008 when the recession hit and had to be purchased by Bank of America. Now, B of A is dealing with all the suits that Countrywide faced.
According to the New York Times, another suit was just filed by the U.S. Lawyer of Manhattan claiming $1 billion in problems. Apparently, countrywide sold numerous loans to Freddie Mac and Fannie Mae fraudulently.
Fast track to federal backing
The suit suggests that Countrywide had a program called "High Speed Swim Lane" that would get federal backing for the loans despite the belief that they were not vetted properly. This all occurred before Bank of America acquired the business supposedly.
USA Today explained that the program lasted from 2007 to 2009, according to USA Today, which suggests that it stayed in place after B of A took on the company. The idea is that the program would skip verification of the borrower's income and would falsify information in order to give employees bonuses for getting mortgages.
Fannie and Freddie's job does not entail vetting the loans, which is why the bank is responsible for it. There was one loan made to somebody who only made $2,666 per month, though the application said the person was making $15,500 a month. Within seven months, the individual defaulted. Another person defaulted within a year after failing to disclose $81,000 in debt.
Claiming it was a lie
The government has the right to sue considering Fannie and Freddie are essentially under government control right now. The Justice Department is upset because Bank of America should have repurchased any loans sold under the program, but the bank unsuccessful to do so. That is why the Justice Department wants to get $1 billion in losses.
The bank contends that the allegations are "simply false." Meanwhile, many of the people who bought homes with these loans are no longer in them. According to USA Today, a 2008 study found that 57 percent of homeowners whose loans were in the "hustle" program defaulted.
Bank of America mortgage fraud suit a consequence of getting Countrywide
When Countrywide was still its own business, it made a lot of monetary mistakes that brought on many people to want to sue. The company went under in 2008 when the recession hit and had to be purchased by Bank of America. Now, B of A is dealing with all the suits that Countrywide faced.
According to the New York Times, another suit was just filed by the U.S. Lawyer of Manhattan claiming $1 billion in problems. Apparently, countrywide sold numerous loans to Freddie Mac and Fannie Mae fraudulently.
Fast track to federal backing
The suit suggests that Countrywide had a program called "High Speed Swim Lane" that would get federal backing for the loans despite the belief that they were not vetted properly. This all occurred before Bank of America acquired the business supposedly.
USA Today explained that the program lasted from 2007 to 2009, according to USA Today, which suggests that it stayed in place after B of A took on the company. The idea is that the program would skip verification of the borrower's income and would falsify information in order to give employees bonuses for getting mortgages.
Fannie and Freddie's job does not entail vetting the loans, which is why the bank is responsible for it. There was one loan made to somebody who only made $2,666 per month, though the application said the person was making $15,500 a month. Within seven months, the individual defaulted. Another person defaulted within a year after failing to disclose $81,000 in debt.
Claiming it was a lie
The government has the right to sue considering Fannie and Freddie are essentially under government control right now. The Justice Department is upset because Bank of America should have repurchased any loans sold under the program, but the bank unsuccessful to do so. That is why the Justice Department wants to get $1 billion in losses.
The bank contends that the allegations are "simply false." Meanwhile, many of the people who bought homes with these loans are no longer in them. According to USA Today, a 2008 study found that 57 percent of homeowners whose loans were in the "hustle" program defaulted.
About the Author:
How many times have you expected more details on the best waypayday loans, and turned to a web search on "instant loans for bad credit?" Your search is over, all the info you will need is at http://www.MatchFinancial.com!
No comments:
Post a Comment