ML-Implode News - Bank of America wins reversal of $1.27 billion penalty in Countrywide "Hustle" mortgage case

A U.S. appeals court on Monday overturned a jury's finding that Bank of America Corp was liable for mortgage fraud leading up to the 2008 financial crisis, tossing a $1.27 billion penalty and dealing the U.S. Justice Department a major setback.
The 2nd U.S. Circuit Court of Appeals in New York ruled that the proof was insufficient under federal fraud statutes to establish liability in connection with a mortgage program called "Hustle" run by the former Countrywide Financial Corp.
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But U.S. Circuit Judge Richard Wesley said the evidence at most showed Countrywide breached contracts to sell Fannie and Freddie loans of a specified quality, but that no proof existed to show it intended to deceive the buyers when those contracts were executed.
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The Justice Department contended the program rewarded staff for generating more mortgages and emphasizing speed over quality and resulted in Fannie Mae and Freddie Mac being lied to about the quality of loans they bought.

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Bank of America wins reversal of $1.27 billion penalty in Countrywide "Hustle" mortgage case