Economic Collapse

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Bank of America $1.27 billion U.S. mortgage penalty is voided
NEW YORK | BY NATE RAYMOND AND JONATHAN STEMPEL

A U.S. appeals court on Monday threw out a jury's finding that Bank of America Corp was liable for mortgage fraud leading up to the 2008 financial crisis, voiding a $1.27 billion penalty and dealing the U.S. Department of Justice a major setback.

The 2nd U.S. Circuit Court of Appeals in New York found insufficient proof under federal fraud statutes to establish Bank of America's liability over a mortgage program called "Hustle" run by the former Countrywide Financial Corp.

The Justice Department claimed Countrywide, which Bank of America bought in July 2008, defrauded government-sponsored mortgage financiers Fannie Mae and Freddie Mac by selling them thousands of toxic loans.

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http://www.reuters.com/article/us-bank-of-america-fraud-idUSKCN0YE20S