Jury Finds Bank of America Liable in Mortgage Program Nicknamed the 'Hustle' - NYTimes.com

Jury Finds Bank of America Liable in Mortgage Program Nicknamed the 'Hustle' - NYTimes.com:
by Landon Thomas, Jr.

Bank of America, one of the country’s largest banks, was found liable on Wednesday for having purposely sold defective mortgages, a result that will be seen as a victory for the government in its aggressive effort to hold large American banks accountable for their role in the housing crisis.

Moreover, the jury also found a top executive at Bank of America’s Countrywide unit liable, pinning some — if not all – of the responsibility for the bad acts on an individual.

During the trial, federal prosecutors accused Rebecca Mairone, a top executive at Countrywide at the time, of having opted for quantity over quality in its mortgage writing program, which resulted in the bank churning out housing loans that were destined to fail.

In its case, federal lawyers claimed that Ms. Mairone, who now works at JPMorgan Chase, led a program nicknamed the “hustle,” derived from HSSL, or the “high-speed swim lane.” The program linked bonuses to how fast bankers could originate loans. As a result, the credit quality of the borrower was given short shrift, the government contended. When these loans were sold on to mortgage giants like Fannie Mae andFreddie Mac, they failed, generating more than $1 billion in losses.

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