As was recently reported by CNN Money, Bank of America, one of the nation’s largest mortgage lenders, has been sued by the United States Department of Justice for mortgage fraud
According to the Justice Department, Bank of America engaged in a program, known internally as “the hustle,” that involved processing thousands of mortgages at high speeds without proper quality checks. The program resulted in thousands of defective or fraudulent home loans being processed and approved by the bank. The defective and fraudulent mortgages were later purchased by the federally- backed financing firms Fannie Mae and Freddie Mac. As a result, thousands of foreclosures occurred and tax payers were left with over $1 billion in losses. The Justice Department claims that the program began under Countrywide Financial, but continued after Countrywide’s purchase by Bank of America in 2008. U.S. Attorney Preet Bharara states that Bank of America’s actions were “spectacularly brazen in scope.” The lawsuit comes on the heels of an $8.5 billion dollar settlement Bank of America paid to investors last year who suffered losses as a result of Bank of America’s fraudulent mortgage securities. Additionally, just last month Bank of America paid $2.4 billion in a settlement to a class action lawsuit related to its acquisition of Merrill Lynch. Between 2009 and 2009, Bank of America received $45 billion in taxpayer bailout funds from the United States government. Read full article here.
Earlier this month the Justice Department also filed a lawsuit against banking giant, Wells Fargo
According to that complaint, Wells Fargo had made reckless home mortgages for over a decade. The government claims that Wells Fargo fraudulently approved home loans which ended up causing large scale losses for the U.S. government. The lawsuit claims that Wells Fargo incentivized employees to approve greater numbers of loans which lead to recklessly approving loans of poor quality. As a result of Wells Fargo’s alleged actions, tax payers lost millions of dollars. According to the complaint, roughly 6,320 risky loans cost U.S. taxpayers $190 million. Wells Fargo denies the Justice Department’s allegations and intends to vigorously defend itself. The government is seeking an unspecified amount of damages and civil penalties in this case. Read full article here.
While the lawsuits are a positive sign that the government is holding the banks accountable for their actions, given the damage done to the U.S. economy, the lawsuits offer little comfort especially to those individuals and businesses suffering from the economic downturn.
It has been widely reported in the media that the reckless activities of big banks are largely responsible for the recent recession that has devastated families across the United States, including New Mexico. Since the recession, thousands of New Mexicans have found themselves out of work, and hundreds of businesses have been forced to lay off workers or shut down. Many New Mexicans have been unable to pay their mortgages or meet their debt obligations. Unfortunately, most economic experts agree that a true recovery is a long way off.
Businesses and individuals facing financial hardship need quality legal representation.
The attorneys at Albuquerque Business Law have assisted hundreds of New Mexico residents and businesses facing financial hardship. Our experienced bankruptcy attorneys have assisted individuals seeking to avoid bankruptcy by dealing with their lenders and negotiating debt reduction or consolidation. For New Mexicans wishing to discharge their debts through the bankruptcy process, our attorneys assist individuals and small businesses to make informed decisions when proceeding through bankruptcy.
In addition to our bankruptcy practice, Albuquerque Business Law assists New Mexico homeowners who are facing foreclosure from some of the very same banks that caused the financial collapse in the first place. Our foreclosure defense attorneys help New Mexicans stay in their homes and negotiate loan modifications with their lenders. If you are a in need of the advice of an experienced New Mexico bankruptcy or foreclosure defense attorney, please contact Albuquerque Business Law as soon as possible. Waiting to contact an attorney can negatively affect your rights.