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Bank of America has requested an appeals court to dismiss a 1.27 billion dollar court-imposed penalty against the bank over mortgage fraud and has also asked that the judge who imposed the penalty be removed from the case. The Charlotte, North Carolina-based megabank asked the 2nd U.S. Circuit Court of Appeals for the removal of Judge Jed Rakoff of the U.S. District Court of the Southern District of New York from the case if it is remanded based on alleged partial public statements he made while the case was pending, and in particular while the penalty phase was ongoing.
The U.S. Department of Justice sued Bank of America in August 2013, accusing the bank's Countrywide division of misrepresenting the mortgage-backed securities it sold to Fannie Mae and Freddie Mac in the years leading up to the financial crisis through a program known as the High Speed Swim Lane, or Hustle. The penalty was originally imposed on Bank of America by Rakoff in July 2014 after a jury found Countrywide liable for selling shoddy securities. Bank of America has been fighting to overturn that verdict since, claiming that the Hustle program ended prior to its July 2008 acquisition of Countrywide.
Chicago-based Fitch Ratings said that the recent non-performing loan sales by Fannie Mae and Freddie Mac could have positive implications for banks in the United States that are seeking to sell off non-performing loans from their own portfolios. The magnitude of the impact of NPL valuations and selling opportunities for banks will become clearer as more NPL buyers and pricing trends develop. Freddie Mac has conducted three bulk NPL sales in the last eight months totaling approximately 1 point 97 billion dollars.
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