U.S. Government Sues Bank Of America For $1 Billion

(Newsroom America) -- The Justice Department is suing Bank of America for $1 billion for allegedly selling defective mortgages to mortgage lenders Fannie Mae and Freddie Mac.

U.S. Attorney Preet Bharara said mortgage lender Countrywide started the scheme which was continued by Bank of America when it purchased it in 2008.

The suit alleges the "High-Speed Swim Lane" or HSSL program was "intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans."

Fannie Mae and Freddie Mac allegedly lost over $1 billion through their involvement in the scheme.

Bank of America did not immediately comment on the U.S. government action.