Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau


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Showing 2 posts in Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).

BREAKING NEWS: Bank of America Sued By U.S. Government For $1 Billion Over Alleged Mortgage Fraud

As previously predicted by the CFS-Lawblog, the federal government filed suit today (10/24/12) against another major lender under the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). This time the government is seeking more than $1 billion in damages and civil penalties against Bank of America regarding loans sold to Fannie Mae and Freddie Mac. In announcing the lawsuit, U.S. Attorney Preet Bharara claims that Countrywide Financial and Bank of America implemented a new loan origination process that “was intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans sold to Fannie Mae and Freddie Mac that later defaulted, causing over $1 billion dollars in losses and countless foreclosures.” According to the government’s complaint, this purported program was started by Countrywide, but continued after Bank of America purchased Countrywide in 2008. (Click here for a copy of the complaint against Bank of America) Read More ›

U.S. Sues Wells Fargo Under False Claims Act

Yesterday (10/9/12), the federal government continued its aggressive assault on financial institutions by filing suit against Wells Fargo, seeking multiple hundreds of millions of dollars in damages and civil penalties under the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). The suit, filed in U.S. District Court for the Southern District of New York, claims that for the past 10 years Wells Fargo falsely certified over 6,500 loans to meet the eligibility standards for government insurance. In a press release, U.S. Attorney Preet Bharara claims that his Civil Fraud Unit found, “yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance.” So much for the concept of being innocent before proven guilty. Wells Fargo has denied these allegations and has promised to “vigorously defend itself against this action.” Read More ›