Countrywide Whistle-Blower to Get $57 Million – NMP Skip to main content

Countrywide Whistle-Blower to Get $57 Million

Phil Hall
Dec 18, 2014
Whistleblower_Pic_12_18_14

A former executive at Countrywide Financial Corporation is going to receive $57 million for his role in a whistle-blower lawsuit against Bank of America Corporation that resulted in the lender settling federal mortgage fraud charges for approximately $16.7 billion, the largest financial settlement in U.S. judicial history.

According to a Bloomberg News report, Edward O'Donnell, a former Countrywide executive vice president, filed a lawsuit against the Charlotte, N.C.-headquartered bank in August in which he accused Countrywide of selling mortgages with inadequate underwriting under the aegis of its "High Speed Swim Lane" program to Fannie Mae and Freddie Mac. Bank of America acquired Countrywide in 2008.

O’Donnell’s payout is a based on the False Claims Act, which enables whistle-blowers to claim 15 percent to 25 percent of what the federal government recovers in its successful prosecutions or out-of-court settlements.

Separate from the O’Donnell case, Bank of America’s legal problems continued yesterday when the National Credit Union Administration (NCUA), the federal regulator for the credit union industry, filed suit in federal court against the lender and U.S. Bank National Association, alleging that they violated state and federal laws by not fulfilling their trustee duties for 99 residential mortgage-backed securities trusts. The NCUA charged that five corporate credit unions-U.S. Central, WesCorp, Members United, Southwest and Constitution-purchased approximately $5.8 billion in residential mortgage-backed securities (RMBS) issued from the trusts between 2004 and 2007, but these securities lost their value and contributed to the failure of all five credit unions.

Published
Dec 18, 2014
A UDAAP Expansion

The CFPB’s new memo about consumer complaints

Regulation and Compliance
May 17, 2022
Builders, Lenders Praise Biden Plan To Improve Housing Supply

'Housing Supply Action Plan' seeks to improve affordability by increasing housing inventory over the next five years.

Regulation and Compliance
May 17, 2022
Trigger Leads Could Be Outlawed In Mortgage Industry

N.Y. congressman says selling the information increases risk of fraud, ID theft.

Regulation and Compliance
May 17, 2022
Georgia Governor Signs New Mortgage Licensing Law

Lessens impact on hiring of out-of-state employees with criminal records

Regulation and Compliance
May 10, 2022
10,000 NAHB Members Sign Letter To Biden Seeking Housing Market Help

The letter cites rapidly rising interest rates, rising home prices and rents, and the rising cost of lumber and building materials for significantly decreasing housing affordability.

Construction
May 02, 2022
Pending Home Sales Fall Again

Pending home sales fell for the fifth consecutive month, according to the National Association of Realtors pending home sales index.

Regulation and Compliance
Apr 27, 2022