US Sues Bank of America for $1B in 'Hustle' Scheme

Prosecutors says bank foisted bum mortgages on Fannie, Freddie
By Kevin Spak,  Newser Staff
Posted Oct 24, 2012 11:56 AM CDT
In this Monday, Oct. 14, 2012, shows a Bank of America branch in downtown Miami.   (AP Photo/Lynne Sladky)

(Newser) – The Justice Department has filed a $1 billion lawsuit against Bank of America over an alleged mortgage scheme known as the "Hustle" invented by its Countrywide unit. According to Manhattan US Attorney Preet Bharara, Bank of America and Countrywide developed a procedure to rapidly generate thousands of toxic loans that later defaulted to Fannie Mae and Freddie Mac, Reuters and the AP report. It's Bharara's sixth lawsuit against a major bank in the last year and a half, but the first over bad loans sold to Fannie and Freddie. (Read more US Justice Department stories.)

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