You may recall that the world-wide financial collapse four years ago was entirely the fault of irresponsible mortgage seekers who demanded houses they couldn’t afford. In other words, the little people did it. Remember that?
Since then – and while a whole passel of criminals who posed as investment bankers, ripped off their investors and made themselves obscenely rich, continued to enjoy their summers in The Hamptons – our Justice Department has been distressingly silent.
But lo, at last.
Federal prosecutors hit Bank of America with a $1 billion-plus civil mortgage fraud lawsuit Wednesday, accusing the banking giant of engineering a scheme that defrauded federally-backed agencies during the national financial crisis.
The complaint . . . accuses the bank of using a loan-origination program called the “Hustle” to process mortgage applications at high speed with little financial checking . . .
The result was defective mortgage loans that defaulted after Bank of America sold them to federal mortgage loan guarantors Fannie Mae and Freddie Mac, causing more than $1 billion in losses and thousands of foreclosures . . .
“Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill,” said Manhattan U.S. Attorney Preet Bharara . . . [they] 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,” said Bharara.