Internal quality reviews also confirmed that the quality of the loans originated were poor, according to the complaint. However, the officials ignored the information and continued with Hustle as planned and restricted the dissemination of the quality reviews, the complaint alleged.
When a senior manager Edward O'Donnell, concerned about the high defect rates, offered to conduct quality checks, Mairone permitted them to be conducted in parallel so as to not "slow down" the fast approval of loans, the lawsuit charges. According to the division's internal reports, in January 2008, FSL's rates of materially defective loans were 57% overall.
Still, "Rather than alter or abandon the Hustle model, FSL's COO prohibited O'Donnell's teams from circulating the pre-funding quality reports outside of FSL," the complaint said.
Mairone was Countrywide Financial's Chief Operating Officer between February 2006 and June 2008. After the firm's takeover in 2008, she became National Retail Operations Sales Executive at Bank of America and later a National Mortgage Outreach Executive at the bank.
Mairone testified before the House Financial Services Committee in 2010 as the default servicing executive of Bank of America regarding the firm's handling of delinquent loans.
In an article in the
that same year , she defended the bank's foreclosure record.
As for the other exec named in the complaint, Greg Lumsden, all we can gather from his
is that he is now an "independent mortgage consultant" and runs a training program for kid golfers.
Written by Shanthi Bharatwaj in New York.