Embattled Countrywide facing fraud lawsuits
Newscast Media HOUSTON, Texas –Perhaps the most in-depth reporting and investigation on a pattern of fraud at Countrywide Financial Corp., once the nation’s largest mortgage lender, iWatch News staff writer Michael Hudson details the story of Eileen Foster, Countrywide Financial Corp. fraud investigation chief, who uncovered massive fraud within the company and, federal officials say, paid a price for doing so.
According to iWatch News, Eileen Foster, the company’s new fraud investigations chief, intercepted documents before they reached the shredder and was astounded at what she saw.
“You’re looking at it and you’re going, Oh my God, how did it get to this point?” Foster recalls. “How do you get people to go to work every day and do these things and think it’s okay?”
Foster claims by early 2008, she’d concluded that many in Countrywide’s chain of command were working to cover up massive fraud within the company — outing and then firing whistleblowers who tried to report forgery and other misconduct. People who spoke up, she says, were “taken out.”
Soon after the discovery of fraud, Foster believes that in retaliation, Bank of America fired her. She immediately sued. Her lawsuit was resolved last year, the terms of which remain disclosed.
Currently, Bank of America and other big players are being pressured by federal and state to settle charges they used falsified documents to speed homeowners through foreclosure. Lawsuits filed on behalf of investors claim Countrywide lied about the quality of the pools of mortgages that the lender sold them during the home-loan boom.
Most recently AIG sued Bank of America for selling them fraudulent Mortgage-Backed Securities (MBS) causing BofA’s stock to drop like a bad habit. The suit claims:
“This case arises from a massive fraud perpetrated by Defendants Bank of America, Merrill Lynch, and Countrywide that has resulted in more than $10 billion in damages to AIG, and ultimately American taxpayers. AIG brings this action as part of its overall efforts to recoup such damages from these defendants and other parties.”
(American International Group Inc et al v. Bank of America Corp et al, New York State Supreme Court, New York County No. 652199/2011). Click here to view entire AIG lawsuit and its details.
Accounts from Foster and other whistleblowers now put Bank of America in a very uncomfortable position. To make matters worse, the Department of Labor conducted an independent investigation after Eileen Foster filed a complaint, and its investigation found that indeed Foster was fired by Bank of America out of retaliation.
Gregory Lumsden, former head of Countrywide’s subprime division told iWatch News, “I don’t care if you’re Microsoft or you’re the Golf Channel or Dupont or MSNBC: companies are going to make some mistakes. What you hope is that companies will deal with employees that do wrong. That’s what we did.”
(Eileen Foster was mortgage fraud investigations chief for Countrywide Financial Corp., which eventually became Bank of America. Michael Hudson covers business and finance for iWatch News. The Columbia Journalism Review called him the reporter who “beat the world on subprime abuses.)
http://www.newscastmedia.com/whistleblowers.html
