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Feds sue Bank of America for $1 billion
 
Bank of America is trying to save money by cutting 10 percent of its workforce, but the financial behemoth still faces a raft of lawsuits and other problems.
Bank of America is trying to save money by cutting 10 percent of its workforce, but the financial behemoth still faces a raft of lawsuits and other problems.
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Federal prosecutors filed a lawsuit against Bank of America on Wednesday over an alleged mortgage scheme that "defrauded the government during the depths of the 2008 financial crisis." In the civil complaint, which seeks $1 billion in damages, the Justice Department implicates a home loan program known as the "hustle," a venture that Bank of America inherited with its purchase of Countrywide Financial during the financial meltdown. Prosecutors say the effort was designed to churn out mortgages at a rapid pace without proper checks on wrongdoing. Bank of America then sold the "defective" loans to Fannie Mae and Freddie Mac, the government-controlled housing giants, "which were stuck with heavy losses and a glut of foreclosed properties." Bank of America has not yet commented on the allegations.

 

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