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February 28, 2014

BofA fights attempt to raise ‘hustle’ fine

Bank of America hit out at the US government’s request to more than double the penalty it is seeking from the bank in a case known as “the hustle”, where it was found liable for civil fraud over mortgages sold to Fannie Mae and Freddie Mac.”

“The bank said the government’s ‘headline-seeking’ request for a higher penalty of $2.1bn “contradicts every pertinent legal principle”, in a filing made late on Wednesday. BofA disputed the fine on the grounds that the calculation included the principal amounts its Countrywide unit lent to borrowers to originate the loans.”

” ‘Countrywide did not ‘gain’ $2.1bn by any stretch of the term; it simply recovered amounts that it had previously paid out,’ the bank said in the filing. BofA argued that it should not pay any penalty if it is to be calculated based on profit.”

“The case dubbed the “hustle” – after the bank’s internal “high-speed swim lane” for rushing through loans – is one of several high profile mortgage-related cases that BofA is still facing as it tries to put its legal woes behind it.”

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Read full Financial Times article here.

 
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