Legal News

Bank of America Found Liable for Defective Mortgages
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)

The federal prosecutors seeking out those responsible for the housing crisis of 2008 have just gained an encouraging victory in their case against Bank of America, as the bank was found liable last Wednesday of having sold defective loans that lead ultimately to the crisis. The prosecutors had a risky road in taking them on, and any other verdict would have balked future litigation; but in this case they not only secured the verdict they sought, but they were able to identify and prosecute a specific individual, Rebecca Mairone, the top manager of Bank of America’s Countrywide Financial unit.

This is good news, as most of those to suffer for the financial crisis of 2007 and 2008 have not been those responsible for it, and many have voiced frustration that few executives were charged for the fiasco. Mairone’s role in this was her incentive program she proposed for her bank, called “high-speed swim lane,” whose initials are HSSL, and which has subsequently been nicknamed the “hustle” program. This program allowed bankers to bestow loans that were sure to fail, propping such disasters on Fannie Mae and Freddie Mac, and ultimately causing $1 billion in losses.


“In this case, Bank of America chose to defend Countrywide’s conduct with all its might and money, claiming there was no case here,” said Preet Bharara, the United States attorney in Manhattan, as reported by “The jury disagreed. This office will  never hesitate to go to trial to expose fraudulent corporate conduct and to hold companies accountable, particularly when it has caused such harm to the public.”

Bank of America naturally felt otherwise, and said so, claiming, “the jury’s decision concerned a single Countrywide program that lasted several months and ended before Bank of America’s acquisition of the company,” as bank spokesman Lawrence Grayson said. “We will evaluate our options for appeal.”

Their lawyer further insisted on Mairone’s innocence. “She’s a model of honesty, integrity and ethics,” said Marc Mukasey, of Bracewell & Guiliania – and aren’t all defendant’s clients so? “She never engaged in any fraud because there was no fraud. We’ll fight on.”

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!

They will meanwhile have to pay fines to be determined by the tough judge Jed. S. Rakoff, who thinks regulators don’t seek enough in these cases. This time, prosecutors are asking for $848 million. And though JPMorgan, for its part on these issues, has already paid $13 billion, Bank of America will likely see this case open the door for further litigation against them.

Image source: Reuters



Associate Attorney


I am looking for an Associate Attorney to work in my general practice law firm. The practice...

Apply now

Litigation Attorney

USA-FL-Fort Lauderdale

Seeking a qualified Transactional Attorney with experience in litigation, covenant enforcement and c...

Apply now

Consumer Defense Litigation Attorney


SESSIONS, FISHMAN, NATHAN & ISRAEL seeks an experienced attorney to join its commercial litigation /...

Apply now

Bankruptcy and Restructuring Partner / Associate


Buckley King is seeking both a partner and a mid-level associate to represent both creditors and deb...

Apply now




Search Now

Litigation Associate Attorney


Pittsburgh office of a BCG Attorney Search Top Ranked Law Firm seeks associate attorney with 3+ year...

Apply Now

Junior Antitrust Associate Attorney


Washington, D.C. office of a BCG Attorney Search Top Ranked Law Firm seeks junior antitrust associat...

Apply Now

Civil Litigation (Insurance Defense) Associate Attorney

USA-CA-San Diego

San Diego office of our client seeks civil litigation (insurance defense) associate attorney with ex...

Apply Now

Most Popular


To Top