CrimeDivas

Female White-Collar Crime Divas-Mordern Day Thieves

Bank of America Hustled Fannie Mae & Feddie Mac!??!!

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More corporate fraud in the mortgage industry. Bank of America found guilty of Mortgage Fraud  over defective mortgages sold by its Countrywide unit.

It is a very rare occurrence for a corporate giant like Bank of America to be found guilty of a civil fraud charge.  But the U.S. Justice Department dug deep into its arsenal of legal statutes and took the giant to trial under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which covers fraud affecting federally insured financial institutions.

According to the records, Countrywide shoddy home loans were “Hustle” and then sold off to mortgage giants Fannie Mae and Freddie Mac.  About 43 percent of the loans sold to the mortgage giants were materially defective, the government said.

This made the crimediva’s posting because, Countrywide executive Rebecca Mairone is facing fraud charges. What’s more interesting is that Ms. Mairone is a managing director at JP Morgan. If you recall the government is negotiating a $13 billion settlement with JP Morgan Chase & Co to resolve a number of probes and claims arising from its mortgage business, including the sale of mortgage bonds. [Could this really be a coincident!]

The U.S. Justice Department will seek up to $848.2 million, the gross loss it said Fannie and Freddie suffered on the loans. But it will be up to U.S. District Judge Jed Rakoff to decide on the penalty. Any penalty would add to the more than $40 billion Bank of America has spent on disputes stemming from the 2008 financial crisis. [I understand doing something based on principle, but it would have been better just to have settled, just my opinion.] Bank of America spokesman Lawrence Grayson said, “The single Countrywide program lasted several months and ended before Bank of America’s acquisition of the company.” The company states it will evaluate the option to appeal.

The verdict is as major victory for the Justice Department, which has been criticized for failing to hold banks and executives accountable for their roles in the events leading up to the financial crisis.

According to Ms. Mairone attorney, Marc Mukasey,  his client is a “woman of integrity, ethics and honesty,” adding they would fight on. “She never engaged in fraud, because there was no fraud,” he said. But, the Justice Department states that the process was overseen by Ms. Mairone, a former chief operating officer of Countrywide’s Full Spectrum Lending division. Countrywide eliminated loan-quality checkpoints and paid employees based on loan volume and speed. JP Morgan spokesperson states they are reviewing the hiring decision of Ms. Mairone.

To add a little gravy to this, the lawsuit came about from a whistleblower who was a Countrywide executive and who stands to earn up to $1.6 million for his role. [Wonder how that works? Tell, get paid, testify – don’t go to prison, interesting!]

This was an interesting case.  We will follow the proceedings against Ms. Mairone and see if she makes it on the CrimeDiva’s list.

Let’s put a dent in crime by informing women  – purchase a CrimeDiva’s T-Shirt (Only $12, click on shirt), wear it, and start a conversation!  Learn more about Crime Divas@ www.CrimeDivas.comDivas shirts

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Check-pointDecember 31st, 2016
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