DeMarco’s days may be numbered and DOJ takes a swat at BofA

Fannie and Freddie are suing Bank of America over loses amounting to more than $1 Billion. In a suit filed in Federal Court on Wednesday for civil mortgage fraud seeking civil penalties and treble damages and penalties. The suit alleges that Fannie and Freddie lost money because of loans sold to them by Countrywide and BofA.

According to Mortgage Daily:

The suit alleges the from at least 2007 through 2009 implemented a new loan origination process called the "Hustle," which was intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans sold to Fannie Mae and Freddie Mac (the GSEs) that later defaulted.  The Hustle continued under the ownership of BOA.

Oddly enough the suit alleges that the GSE’s relied on the lenders’ to determine the legitimacy of the loans. A little like saying, “Why would I look in the box when you told me there were magic beans in it?”

Also from Mortgage Daily: BofA vs. U.S. Government; Big Banks Becoming Bigger; How Will Ed DeMarco Cast his Ballot?, in which the author speculates as to whether DeMarco will have a job if Obama is re-elected.

I guess Ed DeMarco won't be voting for President Obama. ‘If Mr. Obama wins re-election, Mr. DeMarco's days may be numbered, with senior White House officials quietly telling housing industry activists in recent weeks that he will be replaced.’

DeMarco has been in as quasi director since 2009. He’s also been a thorn of the side of most homeowner activists and some servicers who are trying to modify mortgages and coming up against resistance from DeMarco.