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U.S. judge fines Bank of America

By KEN SWEET , AP Markets Writer Published: July 31, 2014
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In brief

BOA nets

$1.3B fine

— A federal judge imposed a $1.3 billion civil penalty against Bank of America on Wednesday for its role in selling risky mortgages to Fannie Mae and Freddie Mac that were advertised as safe investments.

The fine was against Countrywide Financial, which Bank of America purchased in 2008 as the financial crisis was unfolding. It is the latest legal ruling against Wall Street.

A jury found in October 2013 that BofA was liable for Countrywide’s role in selling risky loans to the government housing agencies through a program nicknamed the “Hustle” from August 2007 to May 2008. The jury found the executives misrepresented the mortgages being sold.

Judge Jed Rakoff said the program was “driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system as a whole.”

Associated Press