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COUNTRYWIDE Feds Sue BofA John W. Adkisson

Feds Sue BofA

Where were Fannie and Freddie on this one? Federal prosecutors hit Bank of America with a $1 billion lawsuit Wedesday, accusing the bank of mortgage fraud that contributed to the housing crisis. Bank of America became entangled in the scheme—known as “High-Speed Swim Lane” or “Hustle”—when it purchased Countrywide Financial in July 2008, just as the economy was slipping into recession. Countrywide, a mortgage lending giant, was already known for approving risky loans when it introduced its “Hustle” program to churn out more loans, effectively eliminating a system that ensured the mortgages were being made to buyers who could afford them. A top U.S. attorney said the bank’s fraud was “spectacularly brazen in scope.”

October 24, 2012 5:10 PM