NEW YORK – Federal prosecutors wants a judge to order Bank of America to pay $2.1 billion in penalties for knowingly selling bad home loans, more than double the amount the government had sought in the case.
In documents filed Wednesday, the government said it wants Bank of America to make a payment based on its total revenue from the fraud instead of the profit it made.
The U.S. had wanted Bank of America to pay about $864 million over losses it incurred after it bought thousands of home loans made by Countrywide Financial in 2007 and 2008 during the housing boom. A jury found Bank of America liable for knowingly selling the bad loans to mortgage giants Fannie Mae and Freddie Mac. The jury also returned the verdict against Countrywide and former executive Rebecca Mairone.
U.S. Attorney Preet Bharara made the request for the penalty, saying it is the maximum allowed, in documents filed Wednesday with the U.S. District Court in Manhattan.
Bank of America spokesman Lawrence Grayson said the government is seeking too much money and has conceded that the losses from the loans were less than $864 million.
This claim bears no relation to a limited Countrywide program that lasted several months and ended before Bank of America’s acquisition of the company, he said. We will present the relevant facts in a detailed response soon.