A federal jury has found Bank of America (and a current JPMorgan executive) liable for a Countrywide Financial program that knowingly sold piles of cruddy home loans to Fannie Mae and Freddie Mac, meaning the bank could face nearly $850 million more in penalties added to the $40 billion-plus court tab it has tallied since acquiring the cratering mortgage-lender in 2008.

The Justice Dept.’s lawsuit against BofA and former Countrywide exec Rebecca Mairone alleged that, through a program called the High Speed Swim Lane (or the “Hustle”), the lender deliberately removed the standard speed bumps and tollgates to loan approval. Doing away with these underwriting safeguards allowed Countrywide to quickly sign off on hundreds of millions of dollars in loans that should never have been made, all with the goal of selling these mortgages off to Fannie and Freddie as quickly as possible.

About 43% of loans sold by Countrywide to Fannie and Freddie while the Hustle was running turned out to be defective.

Reuters reports that the 10-person federal jury in New York City found BofA liable on one civil fraud charge of deceiving the bailed-out mortgage-backers by failing to disclose the shoddy nature of the loans.

The DOJ will seek a penalty of up to $848.2 million, the gross amount of loss seen by Freddie and Fannie on these loans. The feds had originally sought triple damages under the False Claims Act, alleging that Countrywide made fraudulent claims for payment to government officials, but the judge threw out those charges in May after BofA argued that the Hustle had ended by the time the federal government bailed the two companies out.

The judge did, however, allow the government’s suit under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) to continue. FIRREA, a law that rose from the ashes of the savings and loan scandal in the late ’80s, deals with the making of false statements to a federally insured financial institution. BofA also tried to have these charges dismissed but the judge allowed it to proceed to trial, saying there were “genuine factual disputes” that should be heard by a jury.

Not surprisingly, BofA, which has repeatedly stated that the Hustle was not only not one of the most obvious frauds committed by Countrywide’s lend-now-ask-questions-later regime, but was actually a legitimate program intended to expedite the home loan process. Moreover, it has tried to contend that the program had concluded by the time BofA swooped in to save Countrywide (a move that it must surely regret now).

“The jury’s decision concerned a single Countrywide program that lasted several months and ended before Bank of America’s acquisition of the company,” a bank rep said after tonight’s decision. “We will evaluate our options for appeal.”

Mairone has since moved on from running the alleged Countrywide scam to work for JPMorgan Chase as, of all things, the person in charge of its foreclosure-review department.

Somehow, her lawyer managed to not burst into laughter while describing Mairone as “woman of integrity, ethics and honesty,” who “never engaged in fraud, because there was no fraud.” Her lawyer may also want to research the definition of the term “fraud.”

This is the first successful DOJ prosecution against a major bank using FIRREA since the collapse of the economy in 2008. The feds are currently involved in a similar lawsuit against Wells Fargo for allegedly lying to the Federal Housing Authority about the quality of loans insured by the FHA during the bubble years. In September, Wells failed to get the False Claims Act charges dismissed, meaning the government could ultimately seek triple the damages if victorious.

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