The Bank of America (BAC) has been ordered to pay nearly $1.3 billion for mortgage fraud committed by Countrywide before B of A bought out the mortgage broker during the financial crisis. The loans were initially made through a lending program called the “High Speed Swim Lane,” involving little or no income verification, and Countrywide then sold the mortgages to Freddie Mac and Fannie Mae, according to cnnmoney.com. The government claimed the program was “intentionally designed to process loans at high speed and without quality checkpoints, and generated thousands of fraudulent and otherwise defective residential mortgage loans.” Former Countrywide executive Rebecca Mairone was found liable by a jury last fall and ordered to pay a $1 million fine. The B of A penalties will not compensate victims but is intended to act as a deterrent, MHProNews has learned. The bank has objected to the size of the penalty and may appeal. ##
