Jury Returns Decision of Liability in BofA-Countrywide-Mairone Case

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This is a poor reflection on our justice system.  The Countrywide – BofA mess cost Fannie Mae and Freddie Mac, and consequently the US taxpayer, almost 1 Billion Dollars and 1 midrange manager is the only person charged in the scheme. What about Countrywide CEO Angelo Mozilo and the BofA execs? For a more detailed look at this subject please read the article below.

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After hearing arguments for four weeks in a Manhattan federal court, the jury returned a decision finding BofA liable on one charge of fraud in the civil case and finding Rebecca Mairone, who worked for Countrywide from 2006 to 2008 as COO of one of its lending divisions, liable on the civil fraud charge she faced.

It’s among only a handful of cases stemming from the subprime and foreclosure crisis to go to trial and the first time an individual has been singled out as being responsible for personally contributing to the housing market’s implosion—and government officials are relishing the victory. “Bank of America chose to defend Countrywide’s conduct with all its might and money, claiming there was no case here. The jury disagreed,” said Preet Bharara, Manhattan U.S. attorney and the prosecutor in the case.

Bharara says the Hustle program treated quality control and underwriting “as a joke” and he faulted BofA and Mairone for “making disastrously bad loans and systematically removing quality checks in favor of its own balance.” He added, “In a rush to feed at the trough of easy mortgage money on the eve of the financial crisis, Bank of America purchased Countrywide, thinking it had gobbled up a cash cow. That profit, however, was built on fraud.”

The case was decided nearly a year to the day after the U.S. Department of Justice filed its complaint, alleging Countrywide used the Hustle program to unload poorly underwritten mortgages to Fannie Mae and Freddie Mac, to the tune of $848.2 million in gross losses for the GSEs, according to court documents. Mairone was added as a co-defendant in January because in her position, she was responsible for managing the High Speed Swim Lane program, or Hustle.

To read the complete article please use the link below.

BofA-Countrywide-Mairone Case

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