Back in August, the Department of Justice announced a record-setting $16.65 billion settlement with Bank of America to resolve multiple federal and state claims involving the bank’s bad behavior leading up to the collapse of the housing market. Now, the former executive who became a whistle-blower to assist federal prosecutors in the matter is set to receive $57 million of the hefty settlement.

The New York Times reports that former Countrywide vice president Edward O’Donnell reached an agreement with the government that allows him to collect part of the settlement that Bank of America agreed to pay in August.

The government’s agreement with O’Donnell comes from the portion of the global settlement – valued at $350 million – that Bank of America reached with federal prosecutors and California, Delaware, Illinois, Kentucky, Maryland and New York.

While officials determined that O’Donnell was entitled to a 16% share of the $350 million, he will also receive $1.6 million as a separate payment from Bank of America.

O’Donnell’s payout stems from a federal lawsuit he filed under the False Claims Act earlier this year. That lawsuit proved to be the turning point for federal prosecutors, as Preet Bharara, the U.S. attorney for the Southern District of New York, joined the suit and used it as a basis to pressure Bank of America to reach a deal.

According to the Times, the former executive provided federal prosecutors with information about activity in Countrywide’s consumer markets division, including that the division “continued to push loan production to record levels in spite of clear signals that there were problems with early loan repayment performance.”

O’Donnell worked at Countrywide from 2003 to 2009. The mortgage lender was acquired by Bank of America in 2008.

The Times reports this isn’t the first time O’Donnell has acted as a whistle-blower in helping the government pursue claims against Countrywide and Bank of America.

O’Donnell previously filed another false-claims lawsuit that was used in a civil fraud cause against Bank of America and a former Countrywide official for selling shoddy mortgages.

That lawsuit centered on Countrywide’s High Speed Swim Lane (HSSL, aka “The Hustle”) program, which began in the final, doomed days of the housing bubble with the goal of approving as many loans as possible in order to quickly resell them to Fannie Mae or Freddie Mac before they realized the mortgages weren’t worth the Post-It notes on which they’d been written.

That trial ended when a federal judge ordered Bank of America to pay a $1.27 billion penalty. Since the verdict was announced the bank has continued to maintain it shouldn’t be liable for a program that ended before its takeover of Countrywide.

Any payout O’Donnell could receive for his part in that case has yet to be determined, his lawyer tells the Times.

According to court filings, three other whistle-blowers could stand to receive a portion of Bank of America’s payout for their false-claims lawsuits against the bank.

Whistle-Blower on Countrywide Mortgage Misdeeds to Get $57 Million [The New York Times]

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