Bank of America Being Sued for $1 Billion For Fraud, Slapped With An Amended Discrimination Suit
Bank of America is getting slapped over and over again with lawsuits and legal complaints. About a month ago, the National Fair Housing Alliance filed a lawsuit after its research showed that the bank failed to maintain homes in minority neighborhoods, which led to vagrancy and crime in those communities and drove down housing prices in those areas.
Yesterday, the National Fair Housing Alliance (NFHA), the HOPE Fair Housing Center, the South Suburban Housing Center, the Metropolitan Milwaukee Fair Housing Council and the Fair Housing Center of Central Indiana filed a new complaint with the US Department of Housing and Urban Development alleging the same thing across black and Latino neighborhoods in Chicago, Indianapolis and Milwaukee. The new complaint is now part of an amended complaint including the previous lawsuit. Shanna L. Smith, president and CEO of the NFHA said in a statement:
“Bank of America is not a good neighbor in communities of color. Instead, one of the nation’s largest holders of foreclosed homes is busy making excuses and passing the buck when it comes to taking responsibility for the homes it owns or services. In many White neighborhoods, Bank of America’s foreclosed properties fit in with most other homes for sale on the block, with manicured lawns and “for sale” signs. African-American and Latino neighborhoods deserve equal treatment.”
Seventy-one percent of the BofA real estate owned properties (REOs) in Indianapolis were found to have “substantial amounts of trash.” In addition, the properties lack “For Sale” signs, have broken windows or broken locks.
In addition, BofA has been sued by the Manhattan US Attorney for a billion dollars for alleged mortgage fraud it engaged in against Freddie Mac and Fannie Mae. According to Business Insider, “It all centers around something called ‘the Hustle,’ or (HSSL- High Speed Swim Lane) a strategy started in August of 2007 the D.A.’s office says Countrywide implemented in order to speed up the mortgage origination process.”
“Poor quality loans” resulted. And lots of them. The story says employees were given bonuses based on the number of loans they originated.
The government has filed such a large suit in the hopes of recovering the cost of the Fannie and Freddie bail outs.
“Countrywide and Bank of America systematically removed every check in favor of its own balance—they cast aside underwriters, eliminated quality controls, incentivized unqualified personnel to cut corners, and concealed the resulting defects,” US Attorney Preet Bharara told The Wall Street Journal. This is the second such lawsuit that he has brought against a big bank. Two weeks ago, he filed suit against Wells Fargo.
BofA paid billions on behalf of Merrill Lynch last month after claims that financial institution misled investors, among the tons of cash it has paid to settle legal troubles.
“Decisions to buy mortgage lender Countrywide and Merrill have forced Bank of America, run since 2010 by Chief Executive Brian Moynihan, to shoulder some $42 billion in litigation expenses, payouts and reserves, according to company figures,” writes the WSJ.