Wednesday, October 4, 2023
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$57 Million Award for Mortgage Whistleblower

MANHATTAN (CN) - A former executive who blew the whistle on Countrywide Financial is in line to get $57 million for helping Uncle Sam collect a record $16.6 billion penalty for Countrywide's role in the financial crisis.

Edward O'Donnell helped the United States collect the massive penalty from Countrywide Financial and Bank of America, which bought Countrywide during the financial meltdown, according to the qui tam complaint.

The complaint, United States of America ex rel. Edward O'Donnell v. Countrywide Financial Corp. et al., was filed under seal in June and unsealed on Dec. 17.

The agreement with O'Donnell covers federal prosecutors' deals with Bank of America in California, Delaware, Illinois, Kentucky, Maryland and New York.

Bank of America told The New York Times last week that it would not comment on "unfounded assertions."

O'Donnell, formerly an executive vice president and senior vice president for the defendants, helped the federal government trace Countrywide's shoddy lending practices. Since 2010 he has been a vice president at Fannie Mae, the quasi-governmental mortgage insurer.

The federal lawsuit, which calls Fannie Mae a "GSE," or government-sponsored enterprise, claims that since Fannie Mae and Freddie Mac were placed into conservatorship in September 2008, the U.S. Treasury has paid more than $187 billion to support them.

"These federal funds have been used primarily to cover losses from single-family

mortgages purchased and guaranteed by the GSEs between 2004 and 2008, but have also been used to purchase mortgages sold in 2009 from lenders including defendants, and to reimburse losses incurred by the GSEs as a result of their guaranteeing those mortgages," the complaint states.

O'Donnell was represented by David Wasinger of St. Louis.

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