Wikileaks next document drop may target Bank of America

November 30, 2010 by · Leave a Comment
Filed under: Industry News 

This could spell bad news for Bank of America.  Confidence in the bank is waning over the “foreclosure-gate”, Merrill Lynch and all the toxic assets.  If there is really damning evidence in those files that knocks the already tattered reputation, investors could pull their money from the company and force it into a very uncomfortable position.  I am looking forward to getting my hands on this once it becomes available and do some of my own analysis and write some articles for you to digest.

Business Insider – Is the target of the Wikileaks “Big Bank” exposé going to be Bank of America?

As the Huffington Post points out, Julian Assange talked about BofA last year in an interview with Computer World, claiming “he had acquired a large cache of information from Bank of America.”

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Bank of America edges closer to tipping point?

November 8, 2010 by · Leave a Comment
Filed under: Industry News 

Jonathan Weil wrote a solid piece discussing BofA and their current valuation, discussing some of the concerns people have with their balance-sheet.  It would be unfortunate if BofA needs another bailout.  We could see that snowball into more uncertainty in the financial sector and that may start a major correction in our markets.  We are still not seeing a meaningful recovery and it is still fresh in many minds of the financial crisis we are going through but is not so pronounced.

There is still plenty of bad debt in the system that needs to either be paid off or defaulted on and many of our large commercial banks have this on their books and we are not sure to the extent of the problem because each day even prime loans are going bad because of the lack in employment to many people who have mortgages that are in these assets.  Only time will tell.

Bloomberg – It was only last April that Bank of America Corp. was making fools out of the doomsayers who had called for its nationalization a year earlier. Taxpayers had gotten their bailout cash back. Investors who bought its shares at the bottom were making a killing. Government leaders lauded the company’s rescues, both of them, as a great success.

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Bombshell – Large investors want Bank of America to repurchase mortgage bonds

October 19, 2010 by · Leave a Comment
Filed under: Industry News 

This mortgage mess is spreading and getting worst.  With light being brought that many of these mortgage backed securities were packaged purposely with known bad loans and sold to many investors that included some of the biggest funds and wealth managers in the country.

In the letter sent to BofA, they mention that there was breeches of contract and warranties that were broken.   Under those claims, they feel Bank of America has the obligation to re-purchase those bonds back that contains the mis-represented loans.   Currently they are asking a repurchase of $47 billion dollars of bonds.   The markets did not like this news and sent BofA shares down by almost 5% at the time of this writing.

This could set the precedent that could have many investors coming to other banks forcing them to repurchase bonds because of these mis-represented claims.   We should take this as healthy, we have many bad debts in the system that need to be dealt with.  This is the rule of law in effect and this should set the proper precedent for future generations.  What we need to stand-up against and not allow to happen is any bailouts to the banks if they become insolvent due to any legal actions that force them to be under-capitalized.  This is natural market forces and if some of these large banks need to be sold off and broken apart, then so be it.

No more  corporate welfare or socialization of losses to the public.   These banks took risks and only the smart and prudent should survive.  That creates strength in our financial system.   I have nothing against banks and I read history on banks and monetary history, it is very fascinating.  But when I read about an older time period and see how we handle things now, we have lost the most important aspect in our banking world, trust and confidence.   Yes there is pain when a bank fails but in the ashes we come through stronger and wiser.  Lets try and continue that tradition.

The Street – Some high-profile mortgage-bond investors reportedly want their money back from Bank of America as pressure intensifies on large mortgage servicers to take back loans that are going bad.

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Bank of America boosts staff handling troubled loans by 2,000

June 24, 2010 by · Leave a Comment
Filed under: Real Estate News 

This is the reality for what is needed to handle this real estate crisis.  We have chosen not to let people default so home will be foreclosed on and that would bring prices down across the board.   We have chosen the path of modify home loans and re-writing principal balances.   I still support homeowners that actually have the means to support the mortgage and we should keep them in their homes.  If not then we need to face the fact that the home needs to be foreclosed and put back on the market at a fair value.

Hopefully the 18,000 employees that BofA has put in this division will help move through the massive backlog of defaulted homes they have on their books.   Currently interest rates are extremely low levels so if people can refinance out of their high interest rate loan, this is the time to take advantage of this opportunity.

Bloomberg – Bank of America Corp., the second- largest U.S. home lender, added 2,000 employees since April to work with borrowers having trouble paying their mortgages, a senior executive said.

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Bank of America to End Overdraft Fees on Debit Cards

March 9, 2010 by · Leave a Comment
Filed under: Industry News 

This is great news and I applaud BofA for taking to the essence of the credit card reform bill and ended this predatory type of fee.  Even myself, was under the impression that the reason we enter our pin number for debit purchases was to authorize a purchase and at that moment the terminal checked to make sure sufficient funds were in the account before running the transaction.  I learned this was not the case and realized that a debt card holder could be charged thousands of percents of interest for the smallest transaction based on the fee that was charged on an annual basis.  I hope to see more banks step up and do away with these fees and focus more on core banking tasks and true financial innovation to produce profits and value.

New York Times – In a move that could bring an end to the $40 cup of coffee, Bank of America said on Tuesday that it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue and put pressure on other banks to do the same.

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