The United States filed a civil mortgage fraud lawsuit against Bank of America Corp, accusing it of selling thousands of toxic home loans that later defaulted to Fannie Mae and Freddie Mac, leading to more than $1 billion of losses.
U.S. Attorney Preet Bharara in Manhattan said the scheme, known as the "Hustle" was invented in 2007 by Countrywide Financial Corp, which Bank of America bought the following year, and lasted through 2009.
He said the scheme was deliberately designed to process loans at high speed without checks on their quality, and resulted in "countless" foreclosures.