…U.S. Circuit Judge Richard Wesley said the evidence at most showed Countrywide breached contracts to sell Fannie and Freddie loans of a specified quality, but that no proof existed to show it intended to deceive the buyers when those contracts were executed.
As a result, he said, “the trial evidence fails to demonstrate the contemporaneous fraudulent intent necessary to prove a scheme to defraud through contractual promises.”
Bank of America in a statement said it was pleased with the ruling. A spokesman for Manhattan U.S. Attorney Preet Bharara, whose office oversaw the lawsuit and took it to trial, had no immediate comment.
Bank of America wins reversal of $1.27 billion penalty in U.S. mortgage case – Reuters
So they only breached the contracts but they weren’t being deceptive when they executed them??? So does that not make sense or is that the point of the quote?Report
A breach of contract is a different thing, and has different remedies, than fraud & deception do.Report
Breach of contract is a civil matter, while fraud is criminal.Report
How about Treason?Report
Fraud is also a civil matter, but in the U.S., it’s governed (mostly) by the Uniform Fraudulent Transfer Act.
The big difference with contract is the “arm’s length” thing.
Reasonable reliance need necessarily be reasonable, and it assumes all diligent inquiry.
Granted, I haven’t read the order, and I am not sure what the grounds were for the decision.Report
Fraud can be civil as well. When the Justice Department went after Standard & Poors for their rating of mortgage bonds, they pursued a civil fraud case. The legal threshold in civil fraud is substantially lower, if I recall what my S&P lawyer friend told me.Report
That last sentence should begin with the word, “Theoretically.”Report
If you didn’t know we were living in a housing bubble….we’ll…
Sheep get shorn.Report