NEW YORK -- Bank of America has lost a major civil fraud case brought by the Justice Department, a major victory for the federal government as it continues to pursue cases stemming from the financial crisis.
A federal jury in Manhattan found BofA liable for faulty loans its unit Countrywide Financial Corp. sold to mortgage finance giants Fannie Mae and Freddie Mac.
The jury also found former Countrywide executive Rebecca Mairone liable, a spokeswoman for U.S. Atty. Preet Bharara said.
Countrywide, a mortgage lending powerhouse based in Calabasas, was acquired by BofA during the height of the housing crisis in 2008.
In a statement, Bharara said: “In a rush to feed at the trough of easy mortgage money on the eve of the financial crisis, Bank of America purchased Countrywide, thinking it had gobbled up a cash cow. That profit, however, was built on fraud, as the jury unanimously found.”