U.S. Attorney alleges Bank of America defrauded Fannie and Freddie

New York /
Oct.October 24, 2012 01:00 PM

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.

This suit comes on the heels of another one filed by the U.S. Attorney for the Southern District, Preet Bharara, against Wells Fargo. The allegations over that suit center on the bank’s failure to properly underwrite at least 100,000 loans it had stamped for approval for Federal Housing Administration insurance over 10 years.

New York State Attorney General Eric Schneiderman has also been active on the bank lawsuit front. Earlier this month, he launched a probe against Credit Suisse, investigating its repackaging and sale of mortgage-backed securities. The federal task force created to address mortgage-backed security fraud, of which Schneiderman is co-chair, sued Bear Stearns, now a unit of J.P. Morgan Chase, in early October over alleged misconduct in the packaging and selling of mortgage securities in the boom years. [Bloomberg] — Zachary Kussin


Related Articles

arrow_forward_ios
Freddie Mac’s economists said the slowdown will be caused by a hike in mortgage rates and limits on housing supply. (iStock)
Fannie, Freddie say housing market could see slight hiccup
Fannie, Freddie say housing market could see slight hiccup
New Fannie Mae and Freddie Mac restrictions mean higher mortgage rates for some. (Unsplash)
Mortgage rates on second homes rise as Fannie, Freddie pull back
Mortgage rates on second homes rise as Fannie, Freddie pull back
Blackstone's Jonathan Gray (Photos via Twitter;iStock/Photo Illustration by Kevin Rebong for The Real Deal)
Blackstone, LBA Logistics get $944M financing for logistics portfolios
Blackstone, LBA Logistics get $944M financing for logistics portfolios
Meridian Capital Group CEO Ralph Herzka, Former Freddie Mac CEO David Brickman and  Barings CEO Mike Freno (Herza by Studio Scrivo; Brickman by Freddie Mac; Freno via Barings)
Ex-Freddie Mac boss looks to become top agency-backed CRE lender
Ex-Freddie Mac boss looks to become top agency-backed CRE lender
Former Freddie Mac CEO David Brickman and Meridian Capital Group CEO Ralph Herzka (Freddie Mac; Herza by Studio Scrivo)
Ex-Freddie Mac CEO launching lending platform with Meridian, Barings
Ex-Freddie Mac CEO launching lending platform with Meridian, Barings
Treasury Secretary Steven Mnuchin with Donald Trump. (Getty)
Treasury quits bid to privatize Fannie Mae, Freddie Mac
Treasury quits bid to privatize Fannie Mae, Freddie Mac
FHFA director Mark Calabria (Getty; iStock)
Federal housing agency extends forbearance options for multifamily landlords
Federal housing agency extends forbearance options for multifamily landlords
Future of Fannie, Freddie privatization is uncertain
Future of Fannie, Freddie privatization is uncertain
Future of Fannie, Freddie privatization is uncertain
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...