Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  JPMorgan Chase       

JPMORGAN CHASE

SummaryChartsNewsRatingsCalendarCompany 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsAnalyst Recommendations

Ex-Countrywide executive denies fraud at BofA trial over mortgages

share with twitter share with LinkedIn share with facebook
share via e-mail
0
10/15/2013 | 06:17pm EST
The logo of the Bank of America is pictured atop the Bank of America building in downtown Los Angeles

NEW YORK (Reuters) - A former executive of Bank of America's (>> Bank of America Corp) Countrywide unit told a federal jury on Tuesday that she did not knowingly sell toxic mortgages to Fannie Mae and Freddie Mac in the run-up to the financial crisis.

NEW YORK (Reuters) - A former executive of Bank of America's (>> Bank of America Corp) Countrywide unit told a federal jury on Tuesday that she did not knowingly sell toxic mortgages to Fannie Mae and Freddie Mac in the run-up to the financial crisis.

Rebecca Mairone, a former chief operating officer of Countrywide's Full Spectrum Lending Division, is the lone individual defendant in the lawsuit brought by the U.S. government against the bank, which acquired Countrywide in 2008.

The trial, now in its fourth week in U.S. District Court in Manhattan, is centered on the government's allegations that Countrywide defrauded Fannie Mae (>> Federal National Mortgage Association) and Freddie Mac (>> Federal Home Loan Mortgage Corp), the government-sponsored mortgage finance companies, by selling them thousands of defective mortgages. Countrywide sped up approvals to unqualified lenders in a process it called the "high-speed swim lane" (HSSL), or "Hustle."

Mairone, who oversaw the process, is one of only a handful of individual defendants in lawsuits the government has filed against major financial institutions over improper mortgage practices since the housing market meltdown. The Countrywide case is the first such case to reach trial.

At the start of Mairone's testimony, her lawyer, Marc Mukasey, asked a series of questions about whether she had deliberately sold substandard mortgages to Fannie and Freddie.

"No, never," she replied.

She said she believed HSSL would actually improve loan quality and that the company had controls in place to manage risks. Mairone, 46, is now a managing director at JPMorgan Chase & Co (>> JPMorgan Chase & Co).

During cross-examination, Assistant U.S. Attorney Jaimie Nawaday questioned Mairone about compensation plans for loan specialists and others, which included bonuses for funding a certain number of mortgages each month.

The government has accused Mairone and Countrywide of trading quality for volume by removing underwriters from the review process and paying employees based on the number of loans they produced.

Nawaday will continue questioning Mairone on Wednesday.

DEFENDANT CITES "LOAN QUALITY"

The case stems from a whistleblower lawsuit filed by former Countrywide executive Edward O'Donnell.

The government estimates the mortgage finance companies had a gross loss of $848.2 million on Countrywide's "Hustle" loans. The net loss on loans that were materially defective was $131.2 million, according to prosecutors.

In several hours of testimony on Tuesday, Mairone said she and other Countrywide employees were deeply committed to making sure the loans they sold were low risk.

"Loan quality was the foundation of what we did every day," she said. "That was the culture."

She also emphasized that decisions about how to design and manage HSSL, as well as steps taken to remedy flaws, were not unilaterally made but were the product of discussions with several company leaders.

The case is U.S. ex rel. O'Donnell v. Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 12-01422.

(Reporting by Joseph Ax; Editing by Leslie Adler)

By Joseph Ax

Stocks mentioned in the article
ChangeLast1st jan.
BANK OF AMERICA CORPORATION 1.75% 33.67 Delayed Quote.34.29%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on JPMORGAN CHASE
11:54aMARKETS RIGHT NOW : Hiring gains send stock indexes higher
AQ
11:46aJPMORGAN CHASE : enters deal with Envestnet on customer data privacy
AQ
12/05JPMORGAN CHASE : Envestnet l Yodlee Sign Agreement to Increase Customers' Contro..
BU
12/05JPMORGAN CHASE : 424b8
PU
12/04Energy Up On Trade-Deal, OPEC Hopes -- Energy Roundup
DJ
12/04JPMORGAN CHASE : Three out of Four Small Businesses in Miami Turn a Profit Yet M..
BU
12/03MARK ZUCKERBERG : Mark Zuckerberg Will Face Another Vote to Split Chairman, CEO ..
DJ
12/03Oil Trading in Sweet Spot Adds to Improving Economic Signals
DJ
12/03JPMORGAN CHASE : Fwp
PU
12/03PING AN'S ONECONNECT LAUNCHES UP TO : sources
RE
More news
Chart JPMORGAN CHASE
Duration : Period :
JPMorgan Chase Technical Analysis Chart | MarketScreener
Full-screen chart
Managers
NameTitle
James Dimon Chairman & Chief Executive Officer
Gordon A. Smith Co-President & Co-Chief Operating Officer
Daniel E. Pinto Co-President & Co-Chief Operating Officer
Jennifer A. Piepszak Chief Financial Officer
Lori A. Beer Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
JPMORGAN CHASE5.05%417 278
JPMORGAN CHASE & CO.36.30%417 278
BANK OF AMERICA CORPORATION34.29%297 648
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED-1.44%281 687
WELLS FARGO & COMPANY15.52%225 129
CHINA CONSTRUCTION BANK CORPORATION-3.73%200 113