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Countrywide found liable for selling defective loans

The Bank of America division could be fined as much as $848 million

Score one for the government in the fight to rectify the 2008 mortgage crisis. On Oct. 23, a Manhattan federal jury found Bank of America Corp.’s Countrywide unit liable for selling thousands of defective loans to mortgage-finance firms Fannie Mae and Freddie Mac, thus setting off the financial crisis.

The case, which was the first brought by the government to actually go to trial concerning the mortgage crisis, will see civil penalties set at a later date. Assistant U.S. Attorney Pierre Armand asked the court to fine Countrywide $848 million, the gross losses between Fannie Mae and Freddie Mac as a result of the fraud. Bank of America has already been hit hard from settlements concerning the mortgage crisis, with Federal Housing Finance Agency rumored to be seeking $6 billion from the bank to cover damages.

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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