Fraud lawsuit against Bank of America expanded to include former Countrywide exec

A civil lawsuit alleging that Bank of America and Countrywide Financial committed fraud five years ago now has another defendant. Reports indicate Rebecca Mairone, a former top executive for Countrywide Financial – which was purchased by Bank of America – has been included in the case as a defendant.

A Reuters report outlined the allegations against Mairone, saying that the suit claims she encouraged a program called “Hustle” at Countrywide that sped up home loan processing procedures, abandoning requirements that limit exposure to fraud.

As a result, toxic loans packaged by Countrywide and Bank of America were guaranteed by the federally backed insurers Fannie Mae and Freddie Mac, despite the fact that they did not meet the guarantor’s minimum requirements.

The “Hustle” program took place at a time when both government-sponsored entities were looking to limit exposure to risky securities, which experts say were a prime factor in the economic meltdown several years ago. The suit claims Mairone and other similar executives flaunted warnings that speedy processing programs could produce bad loans that could be the subject of future fraud litigations.

Mairone’s business lawyer told Reuters that the government’s accusations against his client were baseless.

“Rebecca Mairone has always been a loud voice for ethics and integrity in the mortgage business and she will be vindicated because she never did anything improper,” said attorney Marc Mukasey.

Executives in the mortgage industry have been a prime target for litigation in the wake of the recent housing market meltdown. Arizona professionals who have been accused would benefit from the legal support of a Phoenix business attorney to fight such allegations.

Categorised in: Business Law, Litigation

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