US Slaps Bank of America With $1B Mortgage Fraud Suit
US federal prosecutors on Wednesday filed a $1 billion civil lawsuit against Bank of America, accusing America’s second largest bank of a “spectacularly brazen” scheme in which the bank allegedly churned out fraudulent mortgages and sold the loans to the government.
Manhattan federal prosecutor Preet Bharara said in a statement Wednesday that mortgage lender Countrywide Financial, which was later purchased by Bank of America, knowingly “made disastrously bad” mortgage loans to borrowers who could not afford them “and then stuck taxpayers with the bill” by selling them to government-controlled housing giants Fannie Mae and Freddie Mac.
It is the government’s first civil fraud lawsuit over mortgages sold to Fannie Mae and Freddie Mac.
“Countrywide and Bank of America systematically removed every check in favor of its own balance – they cast aside underwriters, eliminated quality controls, incentivized unqualified personnel to cut corners, and concealed the resulting defects,” Bharara said. “These toxic products were then sold to the government-sponsored enterprises as good loans.”
The Countrywide program to generate these mortgages was known as the “High-Speed Swim Lane.” Within the company, the program was “aptly named ‘the Hustle,’” Bharara added.
The onset of the global financial crisis four years ago was precipitated by the creation of financial products based on so-called “subprime mortgages” – home loans to borrowers who could not afford them.
Numerous leading financial institutions reaped enormous profits generating and selling the financial products and were bailed out by the US government with hundreds of billions of taxpayer dollars when the market collapsed.
The US government has extracted civil penalties from several major financial players – including Goldman Sachs, Citigroup, and Wells Fargo – for fraudulent or deceptive behavior in connection with mortgage-related financial products.
But there have been no criminal prosecutions of senior executives at major banks in the United States for their roles in the mortgage crisis.
FARC-EP Highlights “Guarantors” Support in Peace Talks
The Revolutionary Armed Forces of Colombia-People”s Army (FARC-EP) highlighted today the guarantees and full support of representatives from Norway, Cuba, Venezuela and Chile in the process to establish peace negotiations with the government.
In a communiqué to the Colombian people, the guerrillas stressed that the Havana-Oslo-Havana trip made with that objective, went according to plan, from October 16 to 18.
The text explains that according to the agreement with the Colombian government representatives, the program for October 18 was fulfilled.
During the establishment of peace talks in Oslo, the FARC-EP focused especially on the opening ceremony, following the strict order of speeches previously communicated to the FARC-EP peace delegation by their respectable hosts.
The communiqué also said that prior to this event, government spokespersons reiterated in Havana and in Oslo, in formal meetings held in the presence of guarantors and accompanying countries, their promise to allow insurgent spokeswoman Alexandra Narino to come to Havana, Cuba, between October 22 and 26.
“We are still awaiting a full lifting of the warrants against each member of the FARC-EP peace delegation,” they highlighted.
On October 18, the second stage of the peace process between the governmnent of President Juan Manuel Santos and the FARC-EP began, with the establishment of a negotiating table in the Norwegian capital.
UN Security Council Backs Truce in Syria
In a press release, the 15-member body welcomed the proposal made by Brahimi to Syrian authorities and several opposition armed groups on occasion of the Muslim celebration.
Meanwhile, Russian permanent representative to the UN, Vitaly Churkin, confirmed that the Syrian government told Moscow about its acceptance of the truce promoted by Brahimi, consent to be announced tomorrow.
The Security Council declaration was made public by its current president gert Rosenthal (Guatemala) at the end of a private meeting between members of the Security Council and Brahimi through videoconference from Cairo.
The document urges UN members and the Arab League and all international factors with influence on the parties in conflict to support the mediator’s efforts regarding the “ceasefire and all violence in Syria.”
It also urges the Syrian government to allow immediate access by humanitarian staff to provide assistance to the needy.
The truce during Eid Al-Adha must be a first step towards a sustained cessation of all violence and the start of an inclusive political transition by the Syrians aimed at achieving a democratic, plural system, says the text.
Via PL