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More Fraud Damages From Bank of America

The last week of January 2014, the U.S. seeks more fraud damages from Bank of America over fraud committed by Countrywide in 2008. Bank of America was asked to pay more than it had bargained for after a federal New York jury found Bank of America and a former Countrywide executive guilty of fraud in October 2013.  

Judge’s Decision May Result in More Fraud Damages From Bank of America

In December, a judge was trying to decide what the penalty would be. Originally it was based on gross losses it said that Fannie Mae and Freddie Mac incurred on loans purchased from Countrywide in 2007 and 2008. 

Then, upon further review, the judge wanted to determine damages based on gross revenue generated by the fraud. The judge asked the Justice Department and the bank to guide him so that he could base penalties on Countrywide’s gains vs. losses resulting from mortgage sales.

Gross gains vs. net gains are what the U.S. lawyers are pushing for on behalf of the government which has urged the judge to set maximum penalties to deter any employee or institution to engage is like fraud activities against individuals and or businesses.

Rewarded Employees for Quantity of Loans

The jury found that Countrywide’s program emphasized and rewarded employees for quantity vs. quality loans. Countrywide perpetrated the fraud, however, Bank of America acquired Countrywide in 2008. Bank of America is now responsible for settling disputes from lawsuits and damages over issues that occurred from the 2008 financial crisis.

The Countrywide executive and Bank of America formally deny doing anything wrong and Bank of America has been considering an appeal.

If approved by the judge, Bank of America would pay $2.1 billion in penalties after being found liable for fraud in bad mortgages sold by Countrywide which adds to the $45 billion total that Bank of America agreed to pay to settle other disputes. 

What Happens Next?

February 26, Bank of America responds to the penalties and March 13 the court hears final oral argument. 

The bank’s fines are showing that there is less than trustworthy behavior being shared with homeowners. If you’re in the midst of renegotiating your home loan, or are facing foreclosure, even bankruptcy, it’s a good idea to work with an experienced real estate attorney with litigation and case knowledge in those areas. 

Consult with Eric Lanigan and Roddy Lanigan by calling for an appointment. As you decide what to do, keep your paperwork in a file. Keep a log of your phone calls to and from the bank. Take notes on what they say and who you speak with. Keep and maintain a file with all your letters, every single piece of mail that you receive from your bank. 

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