Comment on Bank Of America Finally Ordered To Pay $1.27B For Countrywide’s “Hustle”

Bank Of America Finally Ordered To Pay $1.27B For Countrywide’s “Hustle”

(frankieleon)It’s been about nine months since a federal jury found Bank of America liable for the “Hustle,” a pre-bubble Countrywide Financial program that removed safeguards to the mortgage underwriting process, resulting in a mountain of toxic, worthless loans. Yesterday, the judge in the case finally decided how much BofA — and the former Countrywide exec in charge of the program — should pay. For those coming late to this story, in the years leading up to the crash-slam-splat of the housing market, Countrywide realized there was quick cash to be made in approving as many mortgages as possible and reselling them to Fannie Mae or Freddie Mac before anyone realized the loans weren’t worth the sandwich bags on which they’d been written. In order to increase the number of loans it could resell, Countrywide started the High Speed Swim Lane (aka HSSL, and most popularly the Hustle), which expedited the mortgage underwriting process by effectively doing away with it.

 

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