The Oddest Revelation From the Bank of America Fraud Suit

The Oddest Revelation From the Bank of America Fraud Suit

There is something very weird about the civil complaint the Justice Department filed this week against Bank of America Corp. (BAC) for allegedly defrauding Fannie Mae and Freddie Mac.

Prosecutors are suing under a statute called the False Claims Act, which imposes liability on those who defraud the federal government. Curiously, the suit is seeking damages for acts that Countrywide Financial Corp. committed before Fannie and Freddie were seized by the government — back when U.S. officials were adamant that Fannie and Freddie didn’t have any implicit government guarantee. (Bank of America bought Countrywide in July 2008.)

Perhaps the Justice Department has a sound case on the merits anyway; the lawsuit alleges violations of a different federal law as well. Still, I can’t help but wonder if this is how the False Claims Act was intended to be used.

The Justice Department’s complaint alleges that from 2007 through 2009 –- pay close attention to those years — Countrywide implemented a new mortgage-origination process it called the “Hustle.” The complaint says the program generated thousands of fraudulent loans that were sold to Fannie and Freddie and later defaulted, causing the companies more than $1 billion in losses.

Fannie and Freddie were placed into government conservatorship in September 2008. Until then, the government’s position was that Fannie and Freddie were for-profit, private-sector, shareholder-owned corporations -– and most definitely not part of the government.

Rest here…


3 Responses to “The Oddest Revelation From the Bank of America Fraud Suit”
  1. Bill says:

    I just want my $30,000 down payment back. (Like that will ever happen) Knew something weird was going on when I had to go to another county to sign something for the Title Company; (Capital Title ?) BofA’s shell game with all of their subsidiaries, and sub-companies to further convolute the whole mess. It’s like a giant pawn shop. The feudal system never “went away”; It was just dressed up to look different.

  2. Same says:

    Fascinating. By the same logic a bank trying to foreclose on a Note ‘held’ by Fannie or Freddie (meaning securitized and sold on the market to investors), but claiming they are the holder of the Note could justifiably get a counterclaim that they are trying to defraud the Federal Gov and now you have a False Claims Act suit? ….move to Fed court? Comments?

    • Fightback says:

      That IS interesting. Reading now the Quiet Title book by Norman Sirak with a template for in pro per or attnys which details all of the ins and outs of the Ponzi Scheme!

Leave a Reply