GO
Loading...

US seeks $2.1 billion from Bank of America in mortgage fraud case

The reflection of pedestrians walking is seen in a window next to a sign advertising home mortgage services at a Bank of America Corp. branch in Manhattan Beach, California.
Patrick T. Fallon | Bloomberg | Getty Images
The reflection of pedestrians walking is seen in a window next to a sign advertising home mortgage services at a Bank of America Corp. branch in Manhattan Beach, California.

The U.S. government has asked a judge to order Bank of America to pay $2.1 billion, increasing its request for penalties stemming from a jury's finding that the bank was liable for fraud over defective mortgages sold by its Countrywide unit.

The request in a court filing late Wednesday followed a December hearing where a judge asked the bank and the U.S. Justice Department to brief him on how he might base the penalties on Countrywide's gains rather than losses resulting from the mortgage sales.

The Justice Department had previously asked for only $863.6 million based on gross losses it said government-sponsored mortgage finance companies Fannie Mae and Freddie Mac incurred on loans purchased from Countrywide in 2007 and 2008.

The new request for $2.1 billion is based instead on gross revenue generated by the fraud, the government said.

A federal jury in New York in October had found Bank of America and Rebecca Mairone, a former midlevel executive at Countrywide, each liable for fraud in the civil lawsuit.

By Reuters

Contact Banks

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More