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Bank of America back in court over $2.1 billion fraud penalties
Source: Reuters
Bank of America back in court over $2.1 billion fraud penalties
BY NATE RAYMOND
NEW YORK Thu Mar 13, 2014 6:08pm EDT
(Reuters) - A U.S. judge wrestled on Thursday with a U.S. Justice Department request that Bank of America Corp pay $2.1 billion in penalties after being found liable for fraud over defective mortgages sold by its Countrywide unit.
In a second hearing on the penalties to be imposed on the bank, U.S. District Judge Jed Rakoff in New York said he had not yet decided how to rule in what was one of the few cases to go to trial stemming from the financial crisis.
But he tested the government's arguments that it should be awarded penalties based on revenue Countrywide Financial Corp earned selling loans to government-sponsored mortgage finance companies Fannie Mae and Freddie Mac.
Rakoff even asked why the government had not sought even more in penalties, based on the $4.8 billion paid by Fannie and Freddie, rather than seeking just $2.1 billion based on revenue earned only on the defective portion of the loans sold by Countrywide.
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BY NATE RAYMOND
NEW YORK Thu Mar 13, 2014 6:08pm EDT
(Reuters) - A U.S. judge wrestled on Thursday with a U.S. Justice Department request that Bank of America Corp pay $2.1 billion in penalties after being found liable for fraud over defective mortgages sold by its Countrywide unit.
In a second hearing on the penalties to be imposed on the bank, U.S. District Judge Jed Rakoff in New York said he had not yet decided how to rule in what was one of the few cases to go to trial stemming from the financial crisis.
But he tested the government's arguments that it should be awarded penalties based on revenue Countrywide Financial Corp earned selling loans to government-sponsored mortgage finance companies Fannie Mae and Freddie Mac.
Rakoff even asked why the government had not sought even more in penalties, based on the $4.8 billion paid by Fannie and Freddie, rather than seeking just $2.1 billion based on revenue earned only on the defective portion of the loans sold by Countrywide.
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Read more: http://www.reuters.com/article/2014/03/13/us-bankofamerica-fraud-idUSBREA2C2A620140313
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