Finally, some good news out of Washington.
Federal prosecutors are suing Bank of America for more than $1 billion for mortgage fraud against the government-sponsored Fannie Mae and Freddie Mac during the worst years of the housing crisis.
The civil suit charges that, beginning in 2007, Countrywide, who Bank of America bought, did not ensure that borrowers could repay their mortgages. It says Countrywide then sold those defective home loans to Fannie and Freddie, which later lost money when borrowers defaulted.
The lawsuit charges that Countrywide deliberately set out to sell defective loans quickly to Fannie and Freddie. A company policy encouraged loan processors to eliminate underwriting so the lender could process and sell as many mortgages as possible
According to the lawsuit, Countrywide, and later Bank of America, concealed the true quality of the loans even after they knew in early 2008 that 57 percent of such loans were defective