Government Mortgage Fraud Lawsuit Against BofA Headed To Trial
Professor David Freeman Engstrom was quoted by Jonathan Stempel of the Chicago Tribune about the government mortgage fraud lawsuit against BofA and explained why the bank needs to tread carefully when deciding whether or not to admit it did something wrong.
A U.S. government lawsuit accusing Bank of America Corp of fraud in the sale of billions of dollars of toxic mortgage loans to Fannie Mae and Freddie Mac is on track to go to trial next month after a judge rejected the bank's bid to dismiss the case.
In an order made public on Tuesday, U.S. District Judge Jed Rakoff in Manhattan said there were "genuine factual disputes" that justify letting the case continue against the second-largest U.S. bank.
"Admitting it did something wrong could have preclusive effects in subsequent private civil litigation or parallel litigation involving the government, so the bank needs to tread carefully," David Freeman Engstrom, an associate professor at Stanford Law School, said in an interview about Bank of America. "Rolling the dice and going to trial may be more attractive."