Real Estate and Property Law

DOL Tells Bank of America to Rehire Countrywide Whistle-Blower Fired in 2008 and Pay Her $930K

Ordered by the Department of Labor to rehire and pay $930,000 to a fired whistle-blower it inherited along with a lot of troubled Countrywide Financial mortgages in 2008, the Bank of America said today that it intends to appeal the DOL ruling, reports the Wall Street Journal (sub. req.).

By firing her, the DOL found, the bank violated federal whistle-blower protection laws, an Associated Press article notes.

The bank said in a written statement that is disagrees with many of the department’s findings, which are not supported by the evidence, and encourages workers to bring up any issues with the bank, which BofA thoroughly investigates.

And an unidentified spokeswoman told the newspaper that the fired employee, who is identified by the WSJ as Eileen Foster, for cause.

“This individual was terminated as a result of complaints received about management style and poor treatment of employees, not the issues raised in the role as an internal investigator” while she was working at Countrywide, the spokeswoman said, as the Journal reported.

Bank of America acquired the troubled Countrywide, which not long ago was a top mortgage lender, in 2008. Foster was fired that year, too.

Among the issues that Foster brought to management attention, the DOL said in a report released yesterday, were “egregious fraud spread throughout the entire region” that she discovered in a Boston investigation in 2007. They included forged loan documents, destruction of valid documents and manipulation of the company’s computerized loan underwriting system, the WSJ reports.

As a result of Foster’s work, the DOL says in its report, Countrywide closed six of eight subprime lending branches it operated in Boston and fired nearly 44 employees.

The Money & Company blog of the Los Angeles Times also has a story about the DOL’s ruling.

Related coverage: “Subprime Crisis Spotlights #1 Lender” “Bank of America Agrees to $8.5B Settlement, a Record for a Financial Services Firm”

The Economist: “Strife of Brian”

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