US seeks $2.1bn from BofA over mortgage fraud The US government has asked for $2.1bn in penalties from Bank of America in a high-profile case where the bank was found liable for civil fraud over bad mortgages sold to Fannie Mae and Freddie Mac. The request comes as a blow to the bank as the government has more than doubled its earlier demand of about $860m. The case dubbed the "hustle" - after the bank's internal "high-speed swim lane" for rushing through loans - is one of several large legal cases that BofA still faces. The bank is expected to reach multibillion-dollar settlements with other government agencies over alleged faulty mortgages and is awaiting approval on a separate $8.5bn mortgage-backed securities settlement with private investors. The initial $860m fine the government sought was based on gross losses incurred by Fannie and Freddie resulting from bad mortgages by Countrywide, which Bank of America acquired in 2008. The higher figure is based on gross revenues generated by the bank, rather than losses incurred by Fannie and Freddie. Jed Rakoff, the US district judge, will rule on the size of the penalty to be imposed after BofA presents its own calculations by February 26. The "hustle," was the first government case arising from the financial crisis over defective mortgages to go to trial. It is developing as other US attorneys" offices and the DoJ examine the sale of mortgage-backed securities by as many as eight other banks. In October, a jury found BofA and mid-level employee Rebecca Mairone liable for fraud over bad mortgages sold by Countrywide. The fine for Ms Mairone has been maintained at $1.1m and is based on her ability to pay, the DoJ said. "To punish defendants for their culpability and bad faith, and to deter financial institutions and their executives who would engage in similar fraudulent mortgage schemes, the court should impose the maximum penalty on the bank," Preet Bharara, US attorney for the Southern District of New York, wrote in a court document filed late Wednesday. Lawrence Grayson, a BofA spokesman, said: "This claim is no relation to a limited Countrywide programme that lasted several months and ended before Bank of America's acquisition of the company. We will present the relevant facts in a detailed response soon. US banks from BofA to JPMorgan Chase are keen to put their legal woes behind them as mortgage-related settlements continue to drag on earnings and create large unknowns for investors.