Bank of America (BoA) is being sued for more than $1 billion due to its alleged involvement in mortgage fraud during the global financial crisis, it has emerged.
The Southern District of New York division of the US Attorney's Office yesterday (24 October) revealed its decision to take legal action against the financier for the actions of Countrywide Financial between 2007 and 2009.
According to the regulator, the lender - which has since been acquired by BoA - provided home loans to customers throughout this two-year timeframe without first making sure the borrowers could afford these deals.
The regulator believes Countrywide used a process known in the industry as "the hustle", which effectively means the company did everything possible to make sure its mortgages moved forwards, regardless of the circumstances.
Preet Bharara, the US Attorney for this region, described the fraudulent activity conducted by the lender as "spectacularly brazen in scope".
"This lawsuit should send another clear message that reckless lending practices will not be tolerated," he added.
By Gary Cooper