Bank of America was found liable for fraud this week over defective mortgages sold by its Countrywide unit, a major win for the U.S. government in one of the few trials stemming from the financial crisis.
After a four-week trial, a federal jury in New York found the bank liable on one civil fraud charge. Countrywide originated shoddy home loans in a process called “Hustle” and sold them to government mortgage giants Fannie Mae and Freddie Mac, the government said.
The jury also found a former Countrywide executive liable on the one fraud charge
The U.S. Justice Department has said it would seek $848.2 million in penalties, the gross loss it said Fannie and Freddie suffered on the loans. U.S. District Judge Jed Rakoff will hear arguments on Dec. 5 how the judge will assess penalties.
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