A former official at Bank of America Corp.’s Countrywide unit said that he went to federal authorities and filed a whistle-blower lawsuit after learning the government might settle with the lender, Bloomberg News reported on Friday. Edward O’Donnell, who now works for Fannie Mae, said that he contacted the office of Manhattan U.S. Attorney Preet Bharara in February 2012 after reading in news accounts that the Justice Department was considering settling with large U.S. banks accused of selling bad mortgages to government-sponsored enterprises (GSEs). In a complaint filed that month under the False Claims Act and unsealed eight months later, O’Donnell alleged that Countrywide Financial Corp. issued defective mortgages under its “High Speed Swim Lane” program, or HSSL, and then sold them to Fannie Mae and Freddie Mac. The U.S. later joined the suit and the trial, which began Sept. 24 in federal court in New York.
