A former official at Bank of America Corp.’s Countrywide unit who filed a whistle-blower suit testified that in mid-2007, a unit of the lender created a business model that approved a home mortgage loan in 13 minutes.

Edward O’Donnell sued Bank of America under the False Claims Act, alleging it issued defective mortgages and sold them to Fannie Mae and Freddie Mac, and the U.S. later joined the case in Manhattan federal court. This is the first time the government has gone to trial accusing a bank of fraud for loans sold to the two government-sponsored mortgage-finance companies.

The U.S. alleges Countrywide Financial Corp. boosted profit by “benching” underwriters who previously evaluated the accuracy of borrower applications and credit-worthiness before issuing loans that were sold to Fannie Mae and Freddie Mac. The company’s “High Speed Swim Lane” program, started in 2007, processed loan applications in just 10 to 15 days instead of 45 to 60 days, according to the U.S.

O’Donnell, who now works for Fannie Mae, described today how in mid-2007, some Countrywide officials became concerned after a “loan processor” employee at the lender’s NCA unit concluded the “cleared-to-close” approval process of reviewing and approving paperwork for a home loan in just 13 minutes.

Assistant U.S. attorney Jaimie Nawaday showed jurors an email that indicating that the review process began at 3:53 p.m. and the loan was “cleared-to-close” at 4:06 p.m.

“It would not be enough time,” O’Donnell said, listing the raft of paperwork an employee would have to review including title searches, deeds, taxes, a review of the credit and employment history of the borrower, a determination of whether the home was located in a flood zone, property appraisals and a comparison with similar properties.

“There’s a lot to do and 13 minutes is not enough to do very much at all,” he said.

Brendan Sullivan, a lawyer for Countrywide, told the jury in his opening statement yesterday that while the U.S. claims the loans were faulty, the bank had actually created a process to speed up the approval of prime loans after it shifted focus away from subprime loans. He said no one at Countrywide made misrepresentations to Fannie Mae or Freddie Mac.

Bank of America acquired Countrywide in 2008.

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