So in the middle of the mortgage crisis, Bank of America bought American’s biggest mortgage company, Countrywide, (one on in five home loans in the US). It seemed like a deal to the BOA CEO, since Countrywide’s stock price had fallen to 16% of its high value, the BOA cash reserves would make people trust Countrywide’s financial position again, and the making bad loans had stopped. He figured BOA would then dominate the post-crash lending market, and rushed the deal through.
Well turns out that Countrywide was not only in financial trouble, which cost BOA billions on top of the purchase price, but had been deliberately saying loans were better than they were and selling those loans to others. The fine was the biggest fine ever in the history of the United State. After the acquisition, BOA paid a 16.5 billion fine, a 10 billion fine, and a 9 billion fine related to Countrywide. And those are just the big ones.
Well turns out that Countrywide was not only in financial trouble, which cost BOA billions on top of the purchase price, but had been deliberately saying loans were better than they were and selling those loans to others. The fine was the biggest fine ever in the history of the United State. After the acquisition, BOA paid a 16.5 billion fine, a 10 billion fine, and a 9 billion fine related to Countrywide. And those are just the big ones.
The BOA CEO was fired.