US Dept of Justice sues Bank of America

The US Department of Justice filed suit earlier this week seeking $1 billion in damages from Bank of America as successor to Countrywide, which is alleged to have fraudulently sold defective mortgages to the government backed entities, Fannie Mae and Freddy Mac.  The core of the claim is that Countrywide dispensed with all reasonable underwriting standards in order to originate as many loans as possible and then sold those loans to Fannie and Freddy by deceptively asserting that the mortgages were of high quality. 

Most, I suspect, will look at this new claim with skepticism, not because of an absence of wrong doing but because of an abundance of wrong doing that has escaped prosecution or even close scrutiny in the years since the collapse occurred.

A full account of the claim is available on the New York Times website.