In 2008, Bank of America purchased Countrywide and inherited its mortgage program called the “hustle”. This lawsuit claims that Bank of America continued to operate the hustle. It consisted of rubber-stamping risky home loans. And, then selling them to government-controlled Fannie Mae and Freddie Mac, throughout 2009 despite the program’s poor performance.
In fact, Bank of America purchasing Countrywide, inheriting its program, and continuing to operate the hustle reminds us of one other lawsuit.
This new lawsuit is very similar to another recently filed; Bank of America settled for one billion dollars in an attempt to make right their past behavior of making poor loans and concealing the defect rates of loans that they sold to Fannie Mae and Freddie Mac. The two firms are also continuing to push banks to repurchase billions of dollars in bad mortgage loans. These lawsuits filed by the Justice Department and the Federal Housing Finance Agency against Bank of America and 17 other large banks in the past year are intended to send a message that the reckless lending practices of the past will not be tolerated.
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