Home Banking & Finance DOJ sues Bank of America for $1 billion

DOJ sues Bank of America for $1 billion

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A Manhattan U.S. attorney is suing Bank of America Corp. for over $1 billion for allegedly selling defective mortgages from at least 2007 through 2009.

In a loan origination program Bank of America acquired through Countrywide Financial Corp. in 2008 called “the hustle,” loans were allegedly processed without quality checks, resulting in thousands of fraudulent mortgage loans sold later to government-backed Fannie Mae and Freddie Mac.

The U.S. Department of Justice contends the program led to thousands of defaults, foreclosures and over $1 billion of losses, leading up to the financial collapse.

The lawsuit is the first suit the Justice Department has pursued related to mortgages sold to Fannie Mae or Freddie Mac.

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