Bank of America has approximately 41 branches in Nashville, making it one of the largest banks in the area.
The bank offers both personal and business banking services in the Nashville area. These services include mortgages, business loans, checking accounts, savings accounts, credit cards, student banking, auto loans, investments, home and auto insurance, life insurance, and financial planning.
On October 23, Bank of America Corp. and a former Countrywide Financial executive were found guilty of fraud. A jury in federal court in New York ruled against the Charlotte-based bank. Bank of America acquired Countrywide, a California mortgage lender, in July 2008. The Countrywide loans produced $848.2 million in losses for Fannie Mae and Freddie Mac.
Jurors concluded that BofA, through its Countrywide Financial acquisition, had fraudulently sold mortgages to Fannie Mae and Freddie Mac as part of an internal program called “The Hustle.”
The decision came after a month-long trial focused on evidence that the Countrywide program processed mortgage applications at high speed with little checking for fraud, misrepresentations or other potential wrongdoing.
The The Wall Street Journal says ex-Countrywide executive Rebecca Mairone was also found liable. The case marks the first time a U.S. bank has been found guilty of wrongdoing for its actions in the financial crisis, according to the Journal.
Federal Judge Jed Rakoff will decide civil penalties at a later date. The housing agencies lost more than $800 million as a result of the allegedly faulty mortgages.
The trial unfolded this summer with a whistleblower testifying about a Countrywide practice, known as High Speed Swim Lane (HSSL) or “Hustle,” that allegedly included the lender quickly packaging and selling low-quality home loans to Fannie and Freddie. Countrywide portrayed them as top-shelf, even while delinquencies were rapidly rising at the end of the subprime bubble.
Employees assigned to the program received bonuses based on the volume of mortgages approved, a dramatic turnabout from previous metrics that focused more on loan quality, prosecutors charged.
Manhattan U.S. Attorney Preet Bharara said in a statement after the verdict. “As demonstrated at trial, they adopted a program that they called the Hustle, which treated quality control and underwriting as a joke.”
BofA has denied the allegations and said the practices did not continue after they acquired troubled Countrywide Financial.
While it has reserved funds to pay penalties related to the Hustle case, Bank of America’s legal woes from its Countrywide acquisition continue to grow. This week, federal authorities were reported to be seeking a $6 billion settlement with the bank over other Countrywide missteps. Meanwhile, three other probes into possible mortgage fraud have been opened against the bank.