31-July-14
Bank of America was ordered to pay $ 1.3 billion by the judge at Wednesday's "blatant fraud", that bank staff to sell toxic mortgages Fannie Mae and Freddie Mac government-backed mortgage companies.
This decision is a blow to the bank, came to his lawyer met with Justice Department officials in Washington, the Department negotiated solution to the separate allegation that the bank improperly sold mortgage-backed securities.
A person familiar with the discussions said the two sides reached a settlement made ??progress in terms of at least 10 times larger - $ 13 billion and $ 17 billion between - to resolve these claims.
In his ruling, Judge Jed Rakoff, ruling his independent-minded companies and government agencies have been hit in recent years, issued a conclusive assessment of the unit operations of Bank of America's Countrywide.
Country set up a program in August 2007 called "high-speed lane", "HSSL" or "busy" on the borrower's ability to repay the loan fast track the transfer of high-risk mortgages without proper checks.
Judge Rakoff said: "[W] often insignificant HSSL process lasted only nine months, which is the defendant from start to finish of the vehicle outright fraud, and profits driven by hunger, thus ignoring the visit, not just the direct victims of harm person, and the financial system as a whole. "
His penalty assessment is lower than the government's $ 2.1 billion request, but much higher than the bank wants to pay.
Bank of America said: "We believe that this figure did not limited Countrywide relations program, which lasted several months, before the end of Bank of America acquired the company we are reviewing the decision and will evaluate our appeal options.."
The case is unusual, Bank of America choose to play it at the trial, but not resolved.
Bank of America shares in a calm judgment, by the close of trading in New York rose 1.6 percent, to $ 15.58.
The acquisition in 2008 of the National Bank of North Carolina, in what proved to be a disastrous acquisition, when mortgage lenders had a huge write downs after the housing market collapse.
Puri Teba Lara, the federal prosecutors in Manhattan, who prosecuted the case, said: "The jury's verdict, and then make it clear that the imposition of penalties, mortgage fraud cannot be considered in the financial world to do business is just another cost. "
Judge Rakoff sentenced to a fine of $ 1,000,000 for Rebecca Mairone, national staff, who led the program, and later was transferred to work at JPMorgan Chase. As of July 1, she no longer employees of JPMorgan Chase, a bank spokesman said.
Judge Rakoff said that she was "the most actively promoted HSSL fraud and most violent condemnation of those who raised the issue," but he also let her pay the fine over time, rather than a lump sum.
"Although she is certainly not the welfare of the candidates, and is likely to remain in the foreseeable future lucrative jobs, she implemented a one-time payment of $ 1.2 million request, the Government will strained her resources to the limit. According to Here, the order of the court, she a total of only $ 1 million, and paid for some time. "
He also pointed out that "the other, higher-level people can be said to be involved in the fraud, but because of various reasons, rather than imposed by the government."
Ms. Mairone's lawyer Mark Mukasey said: "We continue to believe that Rebecca never intended to deceive anyone, never deceived anyone, unfortunately, more powerful people chose her as a scapegoat, because they think she is a. easy target and we will endeavor to clear her name.”
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