Bank of America Corp. told a judge it shouldn’t pay any penalty in a U.S. lawsuit accusing it of selling defective loans to Fannie Mae and Freddie Mac, Bloomberg News reported today. The government argued earlier that, given the egregiousness of the fraud, the Charlotte, North Carolina-based bank should pay the maximum penalty of $863 million. The bank, in its court filing yesterday said that it should pay $1.1 million at the most. Bank of America’s Countrywide unit was found liable by a federal jury last month for selling the government-sponsored entities thousands of defective loans in the first mortgage-fraud case brought by the U.S. to go to trial. Bank of America argues that the U.S. can’t prove that the scheme to misrepresent the quality of its High Speed Swim Lane or “HSSL” loans and not other factors were a proximate cause to any pecuniary loss to Fannie Mae and Freddie Mac.
