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38 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t Bofa seeks to overturn Fraud verdict After being ordered to pAy neArly $1.3 billion, the bAnk fights bAck. NEW YORK // Lawyers for Bank of America have filed to over- turn a jury verdict last year that held the bank liable for fraud concerning faulty mortgage- backed securities sold by its Countrywide unit. In a motion filed Thursday, attorneys for the bank asked U.S. District Judge Jed Rakoff to either grant a new trial or over- rule the fraud verdict made by a 10-person jury last October. The case revolves around mortgages originated through Countrywide's High Speed Swim Lane (HSSL or "Hustle") program that were later sold to Fannie Mae and Freddie Mac. The complaint against BofA al- leged that Countrywide—which the bank purchased in 2008— threw out quality controls in pursuit of higher volumes and then misrepresented those loans to the GSEs. In their motion, BofA's law- yers argue the government failed to prove the loans involved in the case were advertised as being higher quality than they were. "The trial evidence, even viewed in the light most favor- able to the government, did not prove fraud under this standard," the motion reads. "Instead, the evidence unambig- uously showed that the HSSL loans sold to Fannie and Freddie were well within industry stan- dards for loan quality, and thus Fannie and Freddie received exactly what they paid for." The filing comes nearly a month after Rakoff ordered BofA to pay nearly $1.3 bil- lion for its role in the alleged fraud. BofA spokesperson Lawrence Grayson said at the time that it was reviewing its options to appeal, adding, "We believe that this figure simply bears no relation to a limited Countrywide program that lasted several months and ended before Bank of America's acqui- sition of the company." The motion also follows the bank's historic $16.7-billion deal with the Justice Department to clear itself of charges that it misrepresented toxic securities sold to investors. That settle- ment was made separately from the fraud case. In a separate motion, attorneys for former mid-level Countrywide executive Rebecca Mairone also pushed to over- turn the verdict against their client, arguing that there was no proof given that she deliberately sought to defraud Fannie and Freddie. Mairone was ordered to pay $1 million for her alleged involvement. "The jury's verdict should be set aside ... because there was insufficient evidence for the jury to conclude that Mairone knew of any HSSL loans that were sold to the GSEs as 'investment quality' despite being ineligible for sale," they said. lres expands sales Force the compAny sAys the move is necessAry to meet growing demAnd for its services. CALIFORNIA // In response to the housing market's increasing demand for appraisal manage- ment companies (AMCs) and the growth of its own client base, California-based valua- tions firm LRES is expanding its sales division, the company announced. As part of the expansion, LRES plans to nearly double the size of its sales force. In addition, to help ensure a seamless client onboarding process, LRES has developed a new initiative: the LRES 360 Program, which involves taking a more strategic focus within the first 360 hours after a new client comes on board. During that time, the company's sales and client relations division works heavily with its opera- tions and management divisions to track all new appraisal orders and ensure they are processed and placed in time. The program also includes a follow-up with vendors to ensure they're fulfilling their duties and an hourly check-in with operations to ensure all deadlines are met and orders are delivered. "Now that the mortgage mar- ket is in a healthier state, more small- to medium-sized lend- ers are seeking AMCs to create efficiencies within the appraisal process and maintain compli- ance and proper due diligence of appraisal staff and state and federal regulations," said LRES COO Paul Abbamonto. "Our extended sales force will help deliver a smoother onboarding process to mitigate risk associ- ated with today's demanding regulatory environment." ORIGINATION LocaL Edition