Oct. 25, 2012 – The Justice Department filed a civil mortgage fraud suit against Bank of America Wednesday over the institution’s sale of toxic loans to Fannie Mae and Freddie Mac during the housing crisis, reports said.
BofA acquired the loans when it bought Countrywide, which has been accused of engaging in widespread deceptive and fraudulent practices in order to move large volumes of loans. Reports said the loans sold to Fannie and Freddie caused more than $1 billion in losses.
Rep. Barney Frank, D-Mass., on Tuesday issued a statement urging federal prosecutors not to go after firms over the misdeeds of smaller companies they purchased at the government’s urging. Countrywide was not one of those.
This suit, described as the Justice Department’s first civil suit filed over the sale of bad loans to the housing enterprises, was reported Wednesday by NBC.com’s The Bottom Line.