US sues Bank of America for $1bn
Lender accused of saddling taxpayers with losses by misrepresenting quality of home loans
The US government is suing Bank of America for $1bn, accusing the lender of saddling taxpayers with losses by misrepresenting the quality of home loans it sold to mortgage-finance firms Fannie Mae and Freddie Mac, The Wall Street Journal reports. The charges relate to Countrywide, which was bought by BoA in 2008. The mortgage company is accused of eliminating all checks on loan quality from 2007 to 2009 in a programme known as ‘The Hustle’ and falsely claiming that the loans qualified for insurance from Fannie Mae and Freddie Mac. US attorney for the Southern District of New York Preet Bharara says the alleged behaviour was "spectacularly brazen in scope”.