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n1 [soylentnews.org] writes:

U.S. prosecutors have abandoned their case against Angelo Mozilo, a pioneer of the risky subprime mortgages that fueled the financial crisis, after a two-year quest to bring a civil suit against him.

The Justice Department sent a letter informing Mozilo, the co-founder of Countrywide Financial Corp., that it isn’t moving ahead with any action against him, according to people familiar with the matter. That effectively ends nearly a decade of U.S. scrutiny of a man who became a face of risky lending practices and later an emblem of the government’s mixed success in holding individuals accountable.

[...] Countrywide, which was bought by Bank of America Corp. in 2008, originated more than $408 billion of worth of loans in 2007, at the height of the housing market. Many of them went to poorly vetted and risky borrowers, the Justice Department has said.

[...] The closure of the Mozilo case comes weeks after a federal appeals court reversed a 2013 Firrea ruling against Bank of America and Rebecca Mairone, the only executive of a major U.S. bank to be found liable for their part in the mortgage crisis.

[...] The Justice Department claimed the bank and Countrywide generated thousands of defective loans and sold them to Fannie Mae and Freddie Mac, now under government control. Countrywide sold the loans to boost revenue in the tightening credit market in mid-2007, according to the government. The program became known as the High Speed Swim Lane, or HSSL -- later nicknamed The Hustle.

A three-panel appeals panel in New York ruled in May that prosecutors failed to prove Mairone, and Bank of America, defrauded the government.

Source: Bloomberg [bloomberg.com]

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