Mortgage industry whistleblower wins case against Bank of America

A high-level executive who reported corrupt lending practices at Countrywide Financial Corp. was improperly fired for leading internal investigations that "revealed widespread and pervasive wire, mail and bank fraud" at the lender, a federal agency ruled Wednesday.

The Labor Department ordered Bank of America Corp., which bought Countrywide, to pay the former executive roughly $930,000 and reinstate her.

Eileen Foster, who worked as a vice president at Countrywide and then at Bank of America after it acquired Countrywide in 2008, claimed that high-level executives at Countrywide covered up fraud within the company. She said whistleblowers who tried to report forged documents, faked data and other questionable activity inside the nation's largest mortgage lender were fired.

Foster ran Countrywide's mortgage fraud investigation unit at the time of the merger. In a series of interviews with iWatch News , Foster said Countrywide's management protected sales staffers who inflated borrowers' incomes on loan applications and falsified paperwork in order to push through a high volume of risky mortgages.

"The organization built its business to take advantage of the fraud," Foster said. "It benefitted from the fraud. And it protected the fraud."