A NY federal judge demanded Bank of America to make a $1.27 billion payment as a penalty on a litigation which involved the “Hustle” mortgage program from Countrywide Financial Corp.
The amount was reduced from the original $2.1 billion the government was after. But the judge’s opinion and penalty came at a bad time for BoA, which is in the middle of the making a civil settlement with the Justice Department in Washington.
A spokesperson from BoA recently said the bank lay out its options for an appeal.
Manhattan prosecutors from the U.S. attorney’s office filed the suit against the bank in 2012, claiming executives from Countrywide encouraged workers to put their loans on the “Hustle” program without considering quality. The program offered loans that provided losses after it was sold to major mortgage firms.
Jed Rakoff, a judge overseeing the case, said the Hustle program was nothing but a medium for fraud, which influenced the financial system and investors as whole.