| A former executive vice president at Countrywide Financial Corp. was fired, she claims, before she had a chance to talk at a planned meeting with government regulators about mortgage fraud at the company and the senior executives who condoned it. She was recently awarded nearly $1 million.
In 2007, Countrywide Home Loans originated more residential mortgages than any other U.S. lender: $408 billion. The Calabasas, Calif.-based company also had the most production in 2004, 2005 and 2006. Eileen Foster was an executive vice president in charge of fraud investigations at Countrywide. She was interviewed by 60 Minutes in an episode entitled, Prosecuting Wall Street, pt. 1. When asked if she believed that there were people at the lender who belong in prison, Foster answered “yes” — though she declined to identify anybody specifically. While she indicated that she’s never been asked by public officials about mortgage fraud at Countrywide, Foster said she would reveal names if asked by a grand jury. “It appeared systemic,” Foster said of the mortgage fraud happening at the formerly biggest mortgage lender.
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Eileen Foster on 60 Minutes
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She noted that the mortgage fraud went way beyond a few individuals.
“It was branches of individuals; it was regions of individuals,” she stated.
An investigation in 2007 that was ordered by Foster of a Boston-area subprime division at Countrywide reportedly found evidence in recycling bins that loan officers were forging income and asset statements.
As a result of the investigation, six branches were closed and 44 employees were fired or resigned.
Foster said that she “knows” that the fraud went well beyond Boston.
“What was going on in Boston was also going on in Chicago and Miami and Detroit and Las Vegas and … Phoenix,” she said, “and in all of the big markets all over Florida.”
Foster claims that a senior executive in the subprime division advised employees to circumvent her department and report suspicious activity to the human resources department. The move was intended to punish whistle blowers and protect the highest-producing loan originators.
Once Bank of America Corp. acquired Countrywide in mid-2008, Foster was reportedly promoted. But just prior to a meeting with government regulators about mortgage fraud at the company, she was fired.
She alleges that she was offered a “large amount of money” if she would sign an agreement to keep quiet, but she refused.
She subsequently won a federal whistle blower complaint against Countrywide and was awarded nearly $1 million.
