Regions

Countrywide verdict a major victory for US Justice Department- report

October 26
1:53 AM 2013

According to a Reuters report, the verdict rendered by a New York federal jury which found the Countrywide unit of Bank of America Corp liable for mortgage fraud was a major victory for the US government. The US Justice Department had received criticism for its failure to bring banks and bank officials to trial for their role in the financial crisis.

Government regulators had continued their probe on lenders. The latest decision came in the wake of a USD 13 billion settlement that JPMorgan Chase & Co had offered to resolve claims brought against its mortgage business.

The crux in the case against Countrywide was the "High Speed Swim Lane" or "Hustle" which the unit began in 2007. The Justice Department said "Hustle" discarded loan-quality checks and paid employees based on the volume and speed with which they processed applications. This made "Hustle" fraudulent and defect-ridden.

The entire process was under the management of Rebecca Mairone who was the Chief Operating Officer of the Full Spectrum Lending Division of Countrywide. Mairone was also found by the federal jury to be liable for one charge of fraud.

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