A former employee for Bank of America's Countrywide Financial Corp. testified in federal court Thursday that a Countrywide unit created a way to approve home loans in just 13 minutes, according to news reports.
The executive, Edward O’Donnell, filed a lawsuit against Bank of America, claiming Countrywide misled Fannie Mae and Freddie Mac about the poor quality of the loans they were sold. Last year, in a case stemming from O’Donnell's, the U.S. Department of Justice sued the bank.
O'Donnell claimed Countrywide removed quality control checks in order to speed up loan approvals under a program known as the High Speed Swim Lane, or "Hustle." But on Thursday, he testified about a separate Countrywide program, called New Customer Acquisition, that also resulted in fast loan approvals.
In his testimony, O’Donnell, who now works for Fannie Mae, said some Countrywide officials grew concerned in mid-2007 when an NCA employee finished the “cleared-to-close” approval process of reviewing and approving paperwork for a home loan in 13 minutes, Bloomberg reported.
Here's an excerpt from the story:
Assistant U.S. Attorney Jaimie Nawaday showed jurors an e-mail that indicating that the review process began at 3:53 p.m. and the loan was “cleared-to-close” at 4:06 p.m.
“It would not be enough time,” O’Donnell said, listing the raft of paperwork an employee would have to review including title searches, deeds, taxes, a review of the credit and employment history of the borrower, a determination of whether the home was located in a flood zone, property appraisals and a comparison with similar properties.The trial is ongoing. O’Donnell was scheduled to testify again Friday.
The government had said Hustle continued after Bank of America bought Countrywide. But it has since modified that claim, saying Hustle ended in May 2008. Bank of America bought Countrywide in July of that year.
The bank also points out that Hustle ended before it bought Countrywide and says it believes no fraud was committed.
In October, the U.S. Attorney for the Southern District of New York filed a civil mortgage fraud lawsuit against the bank and Countrywide, saying Hustle resulted in more than $1 billion of taxpayer losses because of toxic home loans that were sold to Fannie and Freddie.
Bank of America had sought summary judgment, which would mean no trial. But in August, U.S. District Judge Jed Rakoff in Manhattan ruled “that there remain genuine factual disputes” in the case, allowing it to move toward trial.
The Hustle lawsuit was the first civil fraud case brought by the Department of Justice over mortgage loans sold to Fannie or Freddie.
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5 comments:
So who are you moronic media idiots blaming? For ages banks had been chastized by the whiners as red lining and not loaning to high risk unemployed liars and bums cheats etc who had no intentions of ever repaying the loads anyway right under Bush's American Dream?
So they lied and got the loan and then what happened? Who got screwed in the long run but the taxpayers when the 20 million homes were foreclosed and 4 quadrillion toxic assets and trillions in losses?
Never loan to useless irresponsible bums looking for a free ride. Red lining was 100% accurate by all banks. They did nothing wrong but listen to the liberal whiners and media. Nevermore.
BTW New politician community activist Obama cried and whined too for the American Dream loans and resulting economy catastrophe so he was part of creating it all.
He can shut the hell up blaming anybody but himself.
Another pleasant and fresh voice of republicanism to start a wonderful day. Wonderful and insiteful comment there sir.
As a BOA employee - I checked the corporate directory for the some of the names of officers mentioned in recent depositions.
Those names have been scrubbed from the Directory. My guess is they have been transferred out of the country where they cannot be compelled to testify against BOA.
You will understand when I do not give my real name.
Had Bush never been blackmailed into the America Dream because of dimo homo Barney Frank and rogue Clintons influence with govt Freddie and Fannie and there never would have never been a bad economy the last year of Bush.
Blame democrat Obama and his liberal pals for the 2008 economy destruction caused by the housing crisis bubble bust.
Bush had 2% unemployment and 2 rag head wars to fight. Socialist incompetent Obama inherited the economy he created and still destroys with his 18 trillion debt and 3rd world goofball Obamacare joke.
I do not believe that blaming the homeowners is justified. The comments by reactionary GOP supporters make me sick. There is no greater travesty in America than to be swindled by a mortgage bank and lose your beloved home. Get over yourselves.
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