Remember when Bank of America bought Countrywide in 2008 and CFC Chief Executive Officer Angelo Mozilo said it wouldn't be long before BofA would "reap what Countrywide hath sowed"? And by that he meant write more than $40 billion worth of checks to clean up Countrywide's manifold f*ck-ups? That honor will likely go on from now until eternity* but BofA did get a drop-in-the-bucket worth of a reprieve this afternoon.
A U.S. appeals court on Monday threw out Bank of America's $1.27 billion penalty in a fraud case over defective mortgages, dealing the U.S. Justice Department a major setback in a lawsuit related to the 2008 financial crisis. The 2nd U.S. Circuit Court of Appeals in New York said the proof at trial was insufficient under federal fraud statutes to establish liability in connection with the "Hustle" mortgage program, which was run at the former Countrywide Financial. The ruling overturns a 2013 jury verdict in a lawsuit by the Justice Department against Bank of America, which bought Countrywide in July 2008, and Rebecca Mairone, a former midlevel Countrywide executive. The jury found the bank liable for Countrywide's sale of shoddy loans originated by its "High Speed Swim Lane" program, also called HSSL or Hustle. The loans were sold to mortgage finance giants Fannie Mae and Freddie Mac.
Bank of America wins reversal of $1.27 billion penalty in U.S. mortgage case [AP]
*Statute of limitations, Ang Mozilo's ass.
