We all knew that the Countrywide merger was ill timed compared to what was happening in the mortgage industry at the time. Most commentators on the subject talked about how this would become a potential problem down the road. Well that saga and case is being continued today.
The Washington Post mentioned that Countrywide loans were 9 times more likely to have “defects” in them compared to their peers. That is a pretty startling figure when you put this into to context of how much more, other bad and mos likely fraudulent behavior that was happening in the time leading up to the crisis point.
People need to go to jail and credibility needs to be severely restoring in our banking and other credit institutions. I love banks and the concepts they represent in a market system using other peoples capital to help get things done. But this brazen handling of these affairs should not be tolerated.
This types of companies already have inherently great advantages just because of the natural of their business, when you give people this type of responsibility, they need to take care and uphold its tenants no matter what. They can affect everyone lives and that is a big weight that have chosen to carry.
Reuters – Wednesday’s case, originally brought by a whistleblower, is the U.S. Department of Justice’s first civil fraud lawsuit over mortgage loans sold to the big mortgage financiers, which were bailed out in 2008.
Housing Wire – Bank of America, one of the largest lenders in the U.S., has instituted a policy of liquidating as many assets saddled with defaulted loans as possible before repossession, said Matt Vernon, the short sale and REO executive at BofA.
Vernon took the position at BofA in February. He has since announced plans to add 1,000 employees to the short sale staff. BofA currently holds more than 477,000 loans eligible for the Home Affordable Modification Program (HAMP), and has provided more than 600,000 modifications through HAMP and its own programs.
But Vernon said BofA will continue to make the short sale push when he spoke on a panel at REO Expo, being held this week in Dallas.
Good to see proper investigations are to taking place after this massive financial fraud that was bought to bear on people across the globe. In this case they are looking into the $16 billion dollars in losses that Merrill allegedly knew about when it was being acquired by BofA after the failure of Lehman Brothers. Being that the losses were that large and the amount of bonuses (in the billions) that were paid as part of the deal, rightfully there are serious questions that need to asked and accounted for. There are more skeletons buried on this so we need to keep looking until the daylight shines on them all.
Bloomberg - Former Bank of America Corp. Chief Executive Officer Kenneth Lewis was sued by New York Attorney General Andrew Cuomo for defrauding investors and the government when buying Merrill Lynch & Co. The bank agreed to pay $150 million to settle a related lawsuit by U.S. regulators.
The market sold off strong today on 3 big banks (Wells, Morgan and BofA) all reporting losses and increasing of loan loss reserves. This throws a wrench in the whole recovery picture and brings uncertainty into the market which creates volatility. Goldman Sachs reports tomorrow and that will be very important, if they post huge losses then it will weigh on the markets and we could see the real correction everyone has been talking about coming true.
Bank of America Corp., the largest U.S. lender, posted a quarterly loss and its first full-year deficit in more than two decades, driven by the cost of repaying U.S. bailout money and defaults on consumer loans.
This is good news that they are looking to have their banking operations headed from NYC where many still see it as the financial center of the world. Charlotte is suitable for handling overall operations but with trading and other financial product units becoming a larger portion of major banks revenue streams, it is very logical to have them handle these operations from a major point of contact with other players.