U.S. May Increase Penalties for Former Countrywide Executive

By Julie Steinberg 

U.S. attorneys said in court Thursday that they plan to increase the civil penalties being sought from a former Countrywide Financial Corp. executive found liable for committing fraud in her role leading a loan-processing program.

Assistant U.S. Attorney Pierre Armand said in a hearing in front of U.S. District Judge Jed Rakoff that the government planned to seek as much as $1.6 million from Rebecca Mairone, the former Countrywide executive. Ms. Mairone, the government said, had recently received a bonus of $487,000 for work she performed in 2013 while at J.P. Morgan Chase & Co. A J.P. Morgan spokeswoman couldn't immediately be reached for comment.

The number isn't set in stone and Mr. Armand said the government might request less, perhaps $1.2 million. The government had previously requested $1.1 million based on Ms. Mairone's ability to pay.

Ms. Mairone last October was found liable, along with Bank of America Corp., for fraud related to loans the bank's Countrywide unit sold in 2007 and 2008 to mortgage-finance firms Fannie Mae and Freddie Mac in a program called the "Hustle." Bank of America acquired Countrywide in 2008. A Bank of America spokesman declined to comment on Thursday's court proceedings.

Write to Julie Steinberg at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires