Today, a federal judge ordered Bank of America to pay $1.27 billion in damages after a jury found the bank liable for mortgage fraud. These particular defective mortgages were sold by Countrywide Financial, which was purchased by Bank of America in 2008.
The bad mortgages were issued by Countrywide between 2007 and 2008. Last year, a jury found Rebecca Mairone, a former Countrywide executive, guilty of defrauding Fannie Mae and Freddie Mac. Fannie and Freddie purchased $2.96 billion in "questionable" mortgages during that time. However, after a government expert was able to further investigate, they found that while many of the mortgages were bad, some were considered acceptable. For this reason, Judge Rakoff settled on a $1.27 billion payment by the bank.
Bank of America offered only a brief statement to press: "This figure simply bears no relation to a limited Countrywide program that lasted several months and ended before Bank of America's acquisition of the company. We're reviewing the ruling, and will assess our appellate options."