Appeals Court Reverses $1.2 Billion Countrywide Verdict, Saying It Wasn't Fraud

From Forbes

Countrywide may have pumped billions of dollars worth of shoddy mortgages through the pipeline that ended with the collapse of Fannie Mae and Freddie Mac but that wasn’t necessarily fraud, a federal appeals court has ruled.

To prove fraud, the government must show Countrywide executives knew when they negotiated contracts to supply mortgages to the government-sponsored entities that they had no intention of living up to their terms. And the government never proved that, a three-judge panel of the Second Circuit Court of Appeals ruled in a 31-page decision issued today.

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