Another day, another lawsuit against a bank allegeding mortgage fraud.
Federal prosecutors are suing Bank of America for allegedly sticking Fannie Mae and Freddie Mac with $1 billion in lousying mortgage loans.
Click here to read more from Reuters.
The lawsuit is similar to the case I wrote about on Sunday in The Sunday Wall Street Journal. Click here to read that.
It offers up more proof that Bank of America should have never acquired Countrywide Financial, where some of the greatest alleged frauds in the mortgage industry appear to have occured.
It alleges that Countrywide Financial, now Bank of America, ran a progam called “operation hustle” to shove bad loans through the pipe, ultimately to government sponsport mortgage companies. The defect rate, the suit claims, rose as high as 40%.
”The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope,” U.S. Attorney Preet Bharara in Manhattan said. “Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill.”