BofA To Pay $1.27 Billion For Mortgage Fraud; Far Larger Case Looms

Bank of America Corp.

was ordered to pay $1.27 billion in fines to cover losses from fraud over mortgages sold by its Countrywide unit. Former Countrywide executive Rebecca Mairone will pay $1 million in the civil case in U.S. district court in Manhattan. The fines follow an October jury verdict that found defendants liable for fraud in Countrywide's lending program it called "High Speed Swim Lane" The program, also called "HSSL" has been dubbed "Hustle" for its emphasis on volume over quality. The deal is separate from a far larger Bank of America dispute with the U.S. Department of Justice in which reportedly rejected a $13 billion offer from Bank of America. Prosecutors may bring suit in the larger case within several weeks concerning Countrywide Financial and Merrill Lynch, according to a report Tuesday in the Wall Street Journal. The two entities were acquired by Bank of America during the 2008 financial crisis. Together Countrywide and Merrill had sold investors nearly $100 billion in mortage-backed securities, many of which defaulted. Bank of America changed hands recently at $15.43, nearly unchanged.