Bank of America has been ordered to pay $1.27 billion in penalties in a mortgage fraud case.
Federal District Court Judge Jed Rakoff determined the Charlotte, N.C.-based bank’s penalties for selling defective loans to Freddie Mac and Fannie Mae prior to the financial crisis. A jury found the bank liable back in October. In addition, a top manager of the Countrywide Financial division was found responsible for selling the loans, which were in a program called the “hustle.”
Bank of America reported $4 billion in legal expenses tied to disputes over faulty mortgages in its second-quarter earnings report earlier this month, as previously reported. [NYT] — Mark Maurer