St Casimirs Mortgage Minute

BofA Asks Judge to Throw Out Mortgage Suit


Bank of America has asked a federal judge to dismiss a civil lawsuit by federal prosecutors over the quality of home loans sold by its Countrywide Financial unit to Fannie Mae and Freddie Mac in the buildup to the U.S. financial crisis. Federal prosecutors in Manhattan have alleged that Countrywide, facing revenue shortfalls as the subprime mortgage market imploded in early 2007, eliminated checks on loan quality in a streamlining effort known as the "Hustle," while assuring Fannie and Freddie that the loans were quality investments. The U.S. is seeking at least $1 billion in damages. Lawyers for Bank of America, which acquired Countrywide in 2008, argued that the U.S. hadn't sufficiently established that a fraud had occurred and was instead trying to turn a contract dispute into a fraud case.

From "BofA Asks Judge to Throw Out Mortgage Suit"
Wall Street Journal (04/29/13) Bray, Chad