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Friday, Dec 1, 2023

BofA Appeals Countrywide Verdict

Bank of America Corp. has asked for a federal judge to overturn a jury verdict that found it liable for thousands of bad mortgages sold by its Countrywide unit, leading to a $1.3 billion judgment. U.S. District Court Judge Jed Rakoff levied the judgment in July after a New York jury found the Charlotte, N.C. bank liable for fraud over a Countrywide program known in the industry as “the hustle.” The program urged loan officers to churn out mortgages quickly, with limited focus on the mortgage holders’ ability to repay the loans. However, the bank claims the evidence against it did not adequately prove that Countrywide loans were defective and asked the judge to either overturn the verdict as a matter of law or order a new trial. “The trial evidence, even viewed in the light most favorable to the government, did not prove fraud under this standard,” the bank’s lawyers wrote. Countrywide, a leading lender during the housing boom, originated or bought about $1.4 trillion in mortgages between 2005 and 2007. Bank of America acquired the Calabasas firm in 2008. The legal move follow a $16.7 billion agreement reached last week between the bank and the U.S. Justice Department over broader poor lending practices by Countrywide and other lenders it acquired following the housing boom. The settlement was the largest ever reached between the government and a company.

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