On February 9, Bank of America Corporation agreed to pay $1 billion to settle a federal probe into alleged underwriting and mortgage fraud by Countrywide Financial Corporation.
The settlement, spearheaded by the U.S. attorney’s office in Brooklyn, New York, came the same day as a $25 billion nationwide foreclosure settlement; BofA is paying $10.8 billion to settle that investigation. But the smaller settlement, unlike the larger, is the only settlement with any bank that resolves claims related to the origination of shoddy loans. It also marks the government’s first major success using the False Claims Act to tackle the mortgage crisis.
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