Mortgage Industry Whistleblower Wins Case against Bank of America

September 15th, 2011
in econ_news

by Michael Hudson  (Excerpt from his article at iwatchnews.org)

whistleblower5 Econintersect:  A high-level executive who reported corrupt lending practices at Countrywide Financial Corp. was improperly fired for leading internal investigations that “revealed widespread and pervasive wire, mail and bank fraud” at the lender, a federal agency ruled Wednesday.

The Labor Department ordered Bank of America Corp., which bought Countrywide, to pay the former executive roughly $930,000 and reinstate her.

Eileen Foster, who worked as a vice president at Countrywide and then at Bank of America after it acquired Countrywide in 2008, claimed that high-level executives at Countrywide covered up fraud within the company. She said whistleblowers who tried to report forged documents, faked data and other questionable activity inside the nation’s largest mortgage lender were fired.

Follow up:

Foster ran Countrywide’s mortgage fraud investigation unit at the time of the merger. In a series of interviews with iWatch News , Foster said Countrywide’s management protected sales staffers who inflated borrowers’ incomes on loan applications and falsified paperwork in order to push through a high volume of risky mortgages.

“The organization built its business to take advantage of the fraud,” Foster said. “It benefitted from the fraud. And it protected the fraud.”

Asked Wednesday about the labor agency’s decision, Foster said, “I don’t want to comment at this time, considering that I may be returning to Bank of America as an employee.”

Bank of America said it plans to appeal the ruling.

Read the rest of the article at iwatchnews.org.

Note: Michael Hudson is Staff Writer at The Center for Public Integrity.  He is the author of the book "THE MONSTER: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--and Spawned a Global Crisis"









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