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December 6, 2013

Court Weighs Penalty in Bank of America 'Hustle' Case

A federal judge said Thursday that he would consider the “public purpose” of imposing a penalty on Bank of America Corp. for the fraudulent actions of its Countrywide unit in a mortgage program called the “Hustle.”

“Manhattan District Court Judge Jed Rakoff made the point while hearing arguments from the U.S. government and Bank of America over what size penalty should be imposed on the bank for the actions of Countrywide Financial Corp., which the bank purchased in 2008. In October, a jury found the bank and a midlevel executive liable for fraud for a program that the U.S. government alleged misrepresented the quality of loans sold to mortgage-finance firms Fannie Mae and Freddie Mac

The government has argued for a penalty of $864 million, while Bank of America has argued it should pay no more than $1.1 million. Counsel for Rebecca Mairone, a former Countrywide executive found liable for her role in the Hustle, argued she shouldn’t pay any penalty.”


Read full Wall Street Journal article here

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