Regional HUD IG Audit: BofA Should Face Fraud Claims for Soured Loans

[chill_wind]

BofA May Face Fraud Claims for Soured Loans
Hugh Son, Dawn Kopecki and Donal Griffin - Oct5

Bank of America Corp. (BAC) should face fraud proceedings after its Countrywide unit submitted faulty data to back up claims for reimbursement on federally insured mortgages, according to an audit by a U.S. watchdog.

Half of 14 loans reviewed had “material underwriting deficiencies” concerning borrowers that resulted in more than $720,000 in losses, according to a Sept. 30 report from the Department of Housing and Urban Development’s inspector general. Kelly Anderson, a HUD regional inspector general, recommended the agency pursue legal remedies against Charlotte, North Carolina-based Bank of America, the biggest U.S. lender.

“Countrywide did not properly verify, analyze, or support borrowers’ employment and income, source of funds to close, liabilities and credit information,” Kelly wrote in the audit. “This noncompliance occurred because Countrywide’s underwriters did not exercise due diligence in underwriting the loans.”

(snip)

CitiMortgage, a unit of Citigroup Inc. (C), was faulted in a separate inspector general’s report. A review of 68 loans showed the firm, led by Chief Executive Officer Vikram Pandit, 54, improperly submitted claims of almost $5 million, which should be returned to HUD, according to the audit, which covered 2010.

more:

(Lots of spokespeople for the various parties declining to comment)

http://www.bloomberg.com/news/2011-10-04/bank-of-america-s-countrywide-may-face-fraud-suit-after-u-s-housing-audit.html

[dixiegrrrrl]

1. Wake me when ANY of TBTF banks get charged criminally.

[hobbit709]

2. (Lots of spokespeople for the various parties declining to comment)

I bet they are.
At least not without a long talk with their attorneys first.

[dkf]

3. B of A made a mistake buying Countrywide.

The sad thing is they are paying for others fraud.

[hobbit709]

4. they knew what they were getting into.

They were in on plenty of shenanigans of their own before they bought countrywide.
The only reason they bought it was because they thought the government would cover the worthless paper they were buying.

[dkf]

5. So why are the headlines coming out of the countrywide side?

Arent we lucky they got stuck with it instead of the Govt?

[chill_wind]

6. Elsewhere, HUD says BofA significantly ‘hindered’ probe

reported in June-

HUD says BofA ‘hindered’ probe
By Jay MacDonald
Monday, June 20, 2011


Bank of America came under fire last week when it was revealed that the nation's largest lender "significantly hindered" a federal probe into its foreclosure practices on FHA loans.

The report, filed by a Department of Housing and Urban Development inspector general on June 1, was obtained by Bloomberg News when it was admitted into evidence as part of a lawsuit filed by the state of Arizona, which claims the bank misled homeowners who were seeking loan modifications. The HUD report has not been made public.

Read more: http://www.bankrate.com/financing/mortgages/hud-says-bofa-hindered-probe/#ixzz1ZvdhCvA0

[chill_wind]

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