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Former Countrywide Exec to Collect $57 Million for Whistle-Blower Suit

Whistle-Blower Edward O'Donnell CountrywideFormer Countrywide executive Edward O'Donnell will receive $57 million for his role in filing a whistle-blower lawsuit against Bank of America over the sale of faulty mortgage-backed securities, according to a report from Bloomberg News.

A second suit O'Donnell filed against Countrywide was partly responsible for a record $16.65 billion settlement that Bank of America reached with the government in August 2014. Bank of America acquired Countrywide for $4 billion in 2008. That acquisition has cost Bank of America many more billions in settlements, legal fees, and loan buybacks in the last six years.

The whistle-blower lawsuit, which was filed under the False Claims Act, accused Countrywide of misrepresenting the mortgage-backed securities it sold to GSEs Fannie Mae and Freddie Mac through a program known as the High Speed Swim Lane (HSSL, or “Hustle”). O'Donnell filed the suit in 2012 when he learned that Bank of America was in talks with the Justice Department over a possible settlement, according to the report.

A judge levied a $1.27 billion penalty against Bank of America in July for the “Hustle” case. The bank has been fighting to overturn that verdict in the months since, claiming that the program ended prior to its acquisition of Countrywide.

According to newly released documents, O'Donnell filed a second suit in June against a separate Countrywide division over the sales of toxic loans to the GSEs. Bank of America agreed to pay $350 million to settle that claim as part of a much larger settlement – a record $16.65 billion in August, according to the report.

Under the False Claims Act, whistle-blowers can collect between 15 and 25 percent of the money the government recovers.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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