The House Ethics Committee has found no violations in the Countrywide VIP loan program probe, saying that charges of preferential treatment fell outside of its jurisdiction, the Los Angeles Times reported. The focus of the case was centered on lawmakers and staffers who were charged with reaching out to lobbyists or government affairs officials from Countrywide to get assistance with their own mortgages. [more]

Preet Bharara

The U.S. Attorney for the Southern District of New York is suing Bank of America for $1 billion — alleging that the bank defrauded Fannie Mae and Freddie Mac.

The suit alleges that Countrywide Financial, which Bank of America later acquired, administered a loan-origination process, which generated thousands of either fraudulent or defective loans that were then sold to Fannie and Freddie. [more]

The latest disastrous turn in Bank of America’s acquisition of Countrywide Financial has the nation’s second largest lender paying a record $335 million penalty for Countrywide charging more to lenders of certain races and origins.

The settlement is more than 10 times the total amount the U.S. Department of Justice has collected for all previous fair-lending settlements, according to Bloomberg News. Individual borrowers could collect more than $1,000 from the settlement, depending on the form of the loan. [more]

Bank of America will record a $2 billion charge for its mortgage business in the fourth quarter of 2010 and set aside $3 billion for mortgage losses after reaching a Dec. 31 settlement with Fannie Mae and Freddie Mac, the company announced this morning. On Friday, BofA paid $2.6 billion to Fannie Mae and Freddie Mac to settle claims. Fannie and Freddie wanted BofA to repurchase thousands of loans sold to them by BofA’s Countrywide Financial, that may have contained false or improper documentation. BofA agreed to pay the $2.6 billion to settle those requests. “These actions resolve substantial legacy issues in the best interest of our shareholders,” said BofA CEO Brian Moynihan. “Our goals remain the same: put these issues behind us, focus on serving customers and clients, and continue to help distressed homeowners facing difficult times.” [SFBJ]

Battered mortgage lender Countrywide Financial will start making cash
payments of at least $3,000 to Florida homeowners who’ve been
foreclosed on or fallen behind in mortgage payments. The payment will
come through Bank of America, which now owns Countrywide, a company
seen as the poster child for the subprime mortgage crisis. Florida and
10 other states sued the company and settled out of court for a total
of $8.4 billion. About 5,700 Florida borrowers will get a total of $17
million in a payment relief program. The state attorney general’s
office will get $4 million. [more]

Mortgage relief payments promised by defunct home lender Countrywide
Financial haven’t helped the struggling homeowners they were meant to
assist. Countrywide inked an agreement in December, under which it
admitted no guilt in Florida and 10 other states, but promised help for
about 52,000 Florida homeowners. It promised loan modifications for
subprime and payment option adjustable rate mortgages, said it would
waive all fees and penalties and agreed to make cash payments to
families needing help with relocation after foreclosure. Countrywide
set aside $21 million to compensate borrowers who quickly defaulted on
their loans and said it would offer modifications to borrowers even if
they had not yet fallen behind. But critics say Countrywide hasn’t
delivered on its promises. [more]

Angelo Mozilo, the poster boy for the subprime mortgage bust, has been charged with civil fraud by federal prosecutors. The former CEO of Countrywide Financial Corp. was also accused of illegal insider trading by the Securities and Exchange Commission. Former Countrywide Chief Operating Officer David Sambol and ex-Chief Financial Officer Eric Sieracki also face fraud charges. [more]