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The MReport Webcast: Tuesday 5/24/2016

The U.S. Second Circuit Court of Appeals has overturned a 1 point 27 billion dollar penalty imposed on Bank of America over the alleged misrepresentation of mortgage-backed securities sold by Countrywide Financial Corporation to the GSEs through a program known as the High Speed Swim Lane, or Hustle.

The appellate court overturned the verdict because the proof was insufficient under federal fraud statutes to hold the bank liable in connection with Countrywide's Hustle program. The court's ruling stated that the government quote needed to show false or misleading statements made with fraudulent intent, but instead, Critically, the government presented no proof at trial that any quality guarantee was made with fraudulent intent at the time of contract execution. Nor did it offer evidence of any other representations, suggestions, or promises—separate from and post-dating execution of the initial contracts—that were made with fraudulent intent to induce the GSEs to purchase loans close quote.

 

The U.S. House of Representatives is set to vote on an important bill for the mortgage industry today that could alter the way that mortgage loan officers at a federally-insured institution move to nonbank lenders or from one state to another. The bill, the SAFE Transitional License Act of 2015, would provide transitional licensing authority to originate mortgages for individuals who move from a federally-insured institution to a nonbank lender or from one state to another while they work to complete the SAFE Act's licensing and testing requirements.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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