US prosecutors grilled a former executive of Bank of America’s Countrywide unit in federal court on Wednesday, seeking to show she pressed employees to churn out thousands of substandard loans.
Rebecca Mairone, former chief operating officer for Countrywide’s Full Spectrum Lending Division, is the only individual defendant in the civil case against BofA over defective mortgages Countrywide allegedly sold Fannie Mae and Freddie Mac — ultimately causing a gross loss of $848.2 million — in the months leading up to the 2008 financial crisis.
Assistant US Attorney Jaimie Nawaday pointed out that Mairone had supported such employee contests as “On-Fire February” and “March Madness” for those who funded the most loans in a given month.
Mairone said the contests were a motivational tool meant to “make it more fun” and they never “got in the way of controls.”
The trial is based on claims that Countrywide defrauded the US-sponsored mortgage outfits by creating a process called the “high-speed swim lane” or “Hustle,” which sped up approvals for unqualified lenders.
The case is the first brought by the government against a major financial institution over mortgage practices to reach trial since the financial crisis.