Bank of America engaged in blatant fraud involving home loan scheme, charge federal prosecutors

Bank of America engaged in blatant fraud involving home loan scheme, charge federal prosecutors


(NaturalNews) Just in time for the upcoming closing of the litigatory window for such cases, the U.S. Department of Justice (DOJ) has filed a new lawsuit against Bank of America
(BofA) alleging that the banking giant fraudulently dumped billions of
dollars' worth of bad mortgages into the taxpayer-backed mortgage groups
Fannie Mae and Freddie Mac during the early stages of the economic
crisis.

According to CNN Money, the DOJ is seeking $1
billion in damages from BofA for making Fannie and Freddie the targets
of "the Hustle," a corrupt program allegedly launched by the bank to
"process loans at high speed ... without quality checkpoints," which in
turn "generated thousands of fraudulent and otherwise defective
residential mortgage loans."

The government has for years been
trying to get major banks like BofA to buy back these shoddy mortgage
securities, which ultimately led to a government takeover of both Fannie
Mae and Freddie Mac back in 2008, but such efforts have been slow and
somewhat unsuccessful. Meanwhile, taxpayers have repeatedly footed the
bill not only for BofA's reckless loan-dumping spree, but also for the
government-initiated bailout of BofA, which awarded the company with at
least $45 billion in taxpayer funds.

"For the sixth time in less
than 18 months, this office has been compelled to sue a major U.S. bank
for reckless mortgage practices in the lead-up to the financial crisis,"
said Preet Bharara, one of the primary attorneys pressing the new case,
in a recent statement. "The fraudulent conduct alleged in today's
complaint was spectacularly brazen in scope."

Among the many
details in the suit are accusations that both BofA and Countrywide
Financial, the latter of which was purchased by BofA in 2008 for $4.1
billion, engaged in a comprehensive fraud
scheme to deliberately process bad home loans. The scheme involved
discarding legal underwriters, eliminating basic quality controls for
ensuring valid loans, and rewarding company employees for illicitly
covering up the mess.

"Countrywide and Bank of America
... case aside underwriters, eliminated quality controls, incentivized
unqualified personnel to cut corners, and concealed the resulting
defects," added Bharara about the suit. "These toxic products were then
sold to the government-sponsored enterprises as good loans."

Corrupt
loan processors working for BofA also allegedly committed blatant
illegal behavior by manipulating loan forms to illegitimately qualify
unqualified borrowers for home loans. By early 2008, this and other
shady practices by BofA led to a more than 500 percent increase in
defective loans created by the bank.

Source:-
http://www.naturalnews.com/037752_Bank_of_America_mortgage_fraud_criminal_charges.html