Jim Eccleston: Jury Finds Mortgage Origination Abuse

Posted on November 5th, 2013 at 9:59 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:            

     In October 2013, a jury found Rebecca Mairone liable for having saddled the housing giants Fannie Mae and Freddie Mac with bad mortgages that resulted in over $1 billion in losses.  Essentially, the government alleged that the ramped-up mortgage initiative that Mairone oversaw pressured mortgage underwriters to originate riskier yet more profitable housing loans.  In particular, Countrywide’s mortgage program’s (“high speed swim lane”) processors were incentivized to, and repeatedly did, manipulate borrower information like borrower income and other information so that the loans would qualify for federal mortgage guarantees.  Further, according to court depositions, Mairone’s continued to push to meet revenue targets even as the housing market was dwindling, and despite concerns among some mortgage underwriters that the quality of the loans was deteriorating.  At this point, it is unclear what criminal penalties Mairone will face. 

The attorneys of Eccleston Law represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

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