Bank Of America Fined $1.3B For Bad Mortgages

Source: Kevin McCoy / USA Today

NEW YORK — A Bank of America subsidiary was ordered to pay nearly $1.3 billion Wednesday for a program that caused heavy losses to federally-backed mortgage finance giants Fannie Mae and Freddie Mac amid fallout from the financial crisis.

U.S. District Judge Jed Rakoff imposed the fine on the Countrywide Financial unit for risky mortgages sold through a program informally dubbed “The Hustle” or “The High Speed Swim Lane.”

The judge also ordered Rebecca Mairone, a bank employee involved in running the loan program, to pay $1 million for her role.

The financial penalties stem from an October 2013 civil verdict by a Manhattan federal court jury that found Countrywide financially liable for the program which processed thousands of mortgage applications at high speed with little checking for fraud, misrepresentations or other problems. The jury also found Mairone liable.

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