Fuld. Cayne. Mozilo. Mairone?
More than five years after the housing bust, the roll call of banking executives who have been blamed by the public for the crisis has grown ever longer. But when it comes to top managers who have been hit with a jury verdict for pushing dubious mortgages, the list is small indeed.
The new name added this week was Rebecca S. Mairone, a midlevel executive at Bank of America's Countrywide mortgage unit, who was held liable by a federal jury in Manhattan for having saddled the housing giants Fannie Mae and Freddie Mac with bad mortgages that resulted in over $1 billion in losses.
And while the jury verdict in the civil fraud case on Wednesday was hailed by Preet Bharara, the hard-charging United States attorney who has become the scourge of white-collar criminals on Wall Street, Ms. Mairone seems — on the face of it — the most unlikely of culprits to emerge from the housing debacle.
The government's lawsuit essentially contends that the ramped-up mortgage initiative that she oversaw put pressure on mortgage underwriters to originate riskier yet more profitable housing loans. Via a program nicknamed the Hustle, derived from the initials for "high speed swim lane," Countrywide's mortgage processors were "incentivized to, and repeatedly did, manipulate borrower information" like borrower income and other information so that the loans would qualify for federal mortgage guarantees, prosecutors said in their original lawsuit.