“In sidestepping a trial, the Obama administration acted to block embarrassing and possibly incriminating information about the machinations of Wall Street from reaching the general public.”
*
Lou Dobbs Tonight
Monday, November 12, 2007
Mortgage giants Wells Fargo and Bank of America are accused of slapping dubious fees on homeowners struggling to save their homes. With fewer new mortgages being written, these
companies appear to be leaning on these lucrative fees to stay profitable—with devastating consequences for homeowners. We’ll have that report.
Monday, November 12, 2007
Mortgage giants Wells Fargo and Bank of America are accused of slapping dubious fees on homeowners struggling to save their homes. With fewer new mortgages being written, these
companies appear to be leaning on these lucrative fees to stay profitable—with devastating consequences for homeowners. We’ll have that report.
*
“I’M NOT HERE TO PUNISH MY BANKSTER DONORS! I’M HERE TO SERVE THEM UP WHATEVER IS LEFT OF THE ECONOMY, AND TO PAY THEM BACK FOR THEIR CAMPAIGN LOOT WITH NO REAL REGULATION!” Barack Obama, Bankster President
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Investment firms, New York Fed demand Bank of America buy back mortgages
By Andre Damon
21 October 2010
21 October 2010
Some of the most powerful Wall Street investment firms, together with the New York Federal Reserve Bank, on Tuesday took the initial step toward launching legal proceedings aimed at forcing Bank of America to buy back as much as $47 billion in mortgage-backed securities.
The investors, who together control 25 percent of the voting rights for the securities, say that Countrywide Financial, now owed by Bank of America, misrepresented the quality of the securities when it sold them. They further claim that Countrywide has not made good on its obligations to the debt holders by taking too long to foreclose on properties and failing to keep proper records.
The investors’ group includes the bond giant Pimco and the investment management firm BlackRock.
Documents for many of the mortgages, which were being churned out in assembly-line fashion at the height of the real estate frenzy, are either missing or never existed in the first place.
Analysts expect banks to take even further losses from repurchasing toxic mortgage-backed securities. The US banking industry may lose between $55 and $120 billion, according to a study issued October 15 by JP Morgan Chase.
The New York Federal Reserve Bank holds $16 billion of mortgage-backed securities acquired in its 2008 bailout of the investment bank Bear Stearns and the insurance giant American International Group (AIG).
Over the past month, numerous investigations have revealed that the largest banks and finance companies disregarded legal requirements in processing foreclosures and moving to evict homeowners and seize their houses.
The announcement of the firms’ letter, together with Bank of America’s disclosure of a third-quarter loss of $7.4 billion, contributed to a sharp stock sell-off Tuesday, with Bank of America shares falling 4 percent.
Bank of America acquired Countrywide Financial, the largest US issuer of home mortgages, at the height of the financial crisis, when the latter was on the verge of collapse. Countrywide was among the leading issuers of subprime loans and was among the first of the major financial firms to be shattered by the financial crisis.
The law firm for the investment companies and the New York Fed, Gibbs & Bruns LLP, sent the Bank of America a “notice of nonperformance” concerning $47 billion in residential mortgage-backed securities issued by Countrywide prior to the mortgage meltdown. The issuing of the letter gives Bank of America 60 days to redress the group’s grievances before the group presses on with a lawsuit. The letter “begins the clock ticking” on legal action, according to Kathy Patrick, a partner at the law firm.
Patrick told CNBC, “There were representations made to my bond holders when they purchased these securities. They are contractual representations about the credit quality of these mortgages... and my clients are concerned... that the mortgages in question did not, at the time they were securitized, conform to those representations.”
As the law firm’s press release puts it, “[The letter] urges the Trustee [New York Mellon Bank] to enforce Countrywide Servicing’s obligations to service loans prudently by maintaining accurate loan records, demanding the repurchase of loans that were originated in violation of underwriting guidelines, and compelling the sellers of ineligible or predatory mortgages to bear the costs of modifying them for homeowners or repurchasing them from the Trusts’ collateral pools.”
Bank of America rejected the charges Tuesday morning, saying, “We’re not responsible for the poor performance of loans as a result of a bad economy. We don’t believe we’ve breached our obligations as servicer.” The company said that it will “vigorously defend” itself against the allegations.
The issue boils down to a dispute between the issuers of mortgage-backed securities—who made huge amounts of money by re-selling dubious mortgages as securities—and the financial companies that bought the bonds. At the height of the real estate bubble, companies like Pimco were as happy to buy subprime mortgage-backed debt as companies like Countrywide were to issue it.
But now that real estate values have collapsed, foreclosures continue to mount and mortgage-backed securities have lost most of their value, the companies are fighting among themselves over who is going to absorb the losses.
As the Financial Times put it: “We are now dealing with the tail-end of the subprime crisis—or the rash of pre-credit crisis greed that led many to sloppily securitise, or hastened them towards paperwork shortcuts, or to buy into ‘blemished’ loans in the first place… So expect continued rising tension between different players in mortgage securitizations—servicers, trustees, investors, etc.”
The financial press has for weeks been writing about rising tensions between the various firms involved in subprime mortgages. But the recent revelations of widespread fraud in the processing of foreclosures has provided debt holders an opportune occasion to press their case for further compensation. “I’m sure the law firm issued the letter now because the issue of foreclosures is in the current news cycle,” said Kevin Heine, a spokesman for New York Mellon, the trustee for the $47 billion in bonds that are in dispute.
Whatever the result of the present negotiations, the episode underscores the fraudulent nature of the subprime lending that fueled the real estate bubble. Lenders’ lack of proper documentation is inseparable from the lack of lending standards and the frenzied speculation and parasitism by means of which Wall Street made huge profits in the pre-crash period.
None of the major financial players, whose greed and recklessness played a major role in crashing the financial system and sparking the deepest slump since the Great Depression, are being held accountable. Earlier this week, the Securities and Exchange Commission announced a deal with former Countrywide CEO Angelo Mozilo to settle fraud and insider trading charges and avoid a civil trial. In sidestepping a trial, the Obama administration acted to block embarrassing and possibly incriminating information about the machinations of Wall Street from reaching the general public.
Mozilo, who made over $460 million as Countrywide CEO during the housing bubble, was fined $67.5 million, two thirds of which will be paid by Bank of America.
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SO FAR, I don’t see any evidence that Obama will not be selling us out like the harem of special interests whores for WALL STREET that he has surrounded himself with. Like Bush’s architect for WALL STREET BIG BANKERS’ WELFARE, Timmy Geithner!
Hasn’t OBAMA lied about every single promise he made when Wall Street bought him into the White House? Even after 100 days, he’s sold us out over and over again. Guess that’s what his translation of “change” means. An extension of the twenty years of corporate rape and pillage of BUSH, HILLARY, BILLARY, BUSH. No wonder people are asking if he’s more like Bush or Clinton!
When OBAMA ran for office he claimed that he would restore the bankruptcy provision in the so called “bankruptcy reform” the bankers wrote themselves when they knew their global RAPE AND PILLAGE gig was coming to an end. Second phase of that would be STUPID GRINGOS PAY FOR LOSES.
This so called “bankruptcy reform” was headed up by the most corrupt whore in American history, OBAMA’S DIANNE FEINSTEIN. You saw her at the inaugural speaking to the nation, while her pimp-husband sat behind Obama picking pockets for deals. FEINSTEIN IS GEORGE W BUSH’S WAR PROFITEER WHORE, that is when she’s not working hard as RED CHINA’S ADVOCATE in Congress.
Feinstein has long been bought and paid for by nearly all special interests in the country. BIG BANKS, BIG AG BIZ, BIG OPEN BORDERS = CHEAP ILLEGAL LABOR, RED CHINA, WAR INTERESTS. She avoids prison by virtue of the fact her pimp-husband, RICHARD C BLUM, hands out big campaign bribes so fellow corrupts dem whores keep their big mouths shut about Feinstein’s long history of corruption and self-serving conflicts of interests that have enabled her to acquire $50 million in mansions while in elected office. Her last being the WAR WHORE PROFITS mansion in San Francisco that costs $17 million. Feinstein’s pimp-husband has paid out bribes to OBAMA, CLINTON, BOXER, KENNEDY, KERRY and of course the other WAR WHORE, JOE LIEBERMAN!
Feinstein also makes sure the entirely worthless and equally corrupt BARBARA BOXER is on the SENATE’S NO ETHICS COMMITTEE to vote against any ethics, and any investigation into Feinstein’s crimes.
Feinstein has long collected BIG BRIBES from BIG BANKERS and busts he fat ass for anything that benefits them. THERE IS NO OTHER WHORE IN THE U.S. SENATE THAT IS MORE RESPONSIBLE FOR MILLIONS OF HOMES IN FORECLOSURE THAN WHORE FEINSTEIN!
Feinstein is the original front-whore for the bankers’ “bankruptcy reform”. After taking big bribes from criminal bankers WELLS FARGO and BANK of AMERICA. She pushed their “reform” agenda despite the fact that 55% of those declaring bankruptcy did so because of staggering medical bills. Well, we know these same whores also work hard for the specials interest drug companies! Sitting right next to whore Feinstein voting on behalf of bankers’ interests were whores BOXER, PELOSI, WAXMAN, CLINTON, and of course BIDEN. Biden has long taken bribes from BIG BANKERS in the form of “consultant fees” he siphons off to his son. Barbara boxer has siphoned a massive fortune to her son similarly and voted against stopping this form of corruption each time.
At the time whore Feinstein fronted for her big banker WELLS FARGO and BANK of AMERICA’S bankruptcy reform, WELLS FARGO HAD ALREADY HAD THEIR CALIFORNIA MORTGAGE LICENSE REVOKED FOR CORPORATE CORRUPTION AND MALFEASANCE!!! IT REMAINS REVOKED TO THIS DAY. THIS CRIMINAL BANK SIMPLY DECLARED ITSELF ABOVE THE LAW, AND WENT ON TO TO PILLAGE COMMUNITIES ALL OVER THE NATION WITH THE SAME CRIMES.
OUR BANKERS’ WHORES, Feinstein, Boxer, Biden, Pelosi, Waxman and certainly OBAMA, voted for each and every BIG BANKERS’ WELFARE PACKAGE with NO STRINGS that could possibly help consumers!
OBAMA BROKE YET AGAIN ONE OF HIS PROMISES THAT IS IF YOU BELIEVED HIM IN THE FIRST PLACE WHEN HE CLAIMED HE WOULD RESTORE THE BANKRUPTCY PROVISION. Having selected JOE BIDEN, the bankers’ boy, as VP was signal to Wall Street, that there would be NO “CHANGE” coming down the wind to impact the rape and pillage by Wall Street and the bankers!
Now that the criminal bankers have had all their loses covered by welfare bailout, what’s left for the people? NADA!
Millions and millions of homes in foreclosure, and the value of those NOT having plummeted, and not a word comes out of whore Feinstein’s mouth, or her harem of bought bankers’ whores.
California has the highest number of foreclosure, and Feinstein continues, as always being the whore she is.
On the next agenda of OBAMA AND HIS HAREM OF BANKER’S WHORES is amnesty for 38 million Mex flag wavers, despite the fact that those state with the most foreclosure are the most infested by illegals! California, Nevada, Arizona, and Florida!
Interestingly, whore Feinstein’s BIG BANKER PAYMASTERS, WELLS FARGO and BANK of AMERICA are both major LA RAZA DONORS. Of course, Feinstein, and now OBAMA are eager to con the American people with one more dem amnesty. Wells Fargo, and Bank of America, made massive profits from marketing to illegals. The both currently illegally open bank account for illegals and they both have a policy against HIRING AMERICAN BORN EMPLOYEES. THEY’RE ALL THIRD-WORLD VISA PEOPLE!
There are virtually no members of Congress not pushing for the Wall Street – La Raza open borders amnesty. One that opposes it is Congressman Dan Tancredo who knows what devastation the Mexican invasion and occupation causes. In his Congressional seat there are more than 10,000 foreclosure owned by Illegals. Who pays? YOU ALREADY HAVE, STUPID GRINGO!
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WELLS FARGO, OPERATING IN CA WITH A PERMANENTLY REVOKED MORTGAGE LICENSE, AND BANK of AMERICA ARE TWO OF DIANNE FEINSTEIN’S BIGGEST DONORS, WHICH IS WHY SHE HAS NEVER OPENED HER MOUTH ABOUT FORECLOSURES!
Lou Dobbs Tonight
Monday, November 12, 2007
Mortgage giants Wells Fargo and Bank of America are accused of slapping dubious fees on homeowners struggling to save their homes. With fewer new mortgages being written, these
companies appear to be leaning on these lucrative fees to stay profitable—with devastating consequences for homeowners. We’ll have that report.
Monday, November 12, 2007
Mortgage giants Wells Fargo and Bank of America are accused of slapping dubious fees on homeowners struggling to save their homes. With fewer new mortgages being written, these
companies appear to be leaning on these lucrative fees to stay profitable—with devastating consequences for homeowners. We’ll have that report.
*
Senate defeats Obama-backed, anti-foreclosure bill
Thursday, April 30, 2009
(04-30) 14:20 PDT WASHINGTON (AP) --
The Democratic-controlled Senate on Thursday defeated a plan to spare hundreds of thousands of homeowners from foreclosure through bankruptcy, a bill President Barack Obama embraced but did little to see it through.
A dozen Democrats joined Republicans in the 45-51 vote to scuttle the bill, which Obama had said was important to saving the economy and promised to push through Congress. But facing stiff opposition from banks, Obama did little to pressure lawmakers who worried it would encourage bankruptcy filings and spike interest rates.
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January 16, 2009
Bank of America to Receive Additional $20 Billion
Kenneth D. Lewis gambled on bold acquisitions to build Bank of America into the nation’s largest bank.
But the need for fresh government support to grapple with the newly revealed losses at Merrill Lynch, the brokerage firm he snapped up in a rapid-fire arrangement at the height of the financial crisis in September, raises questions about whether the bank has gone a deal too far.
Two weeks after closing its purchase of Merrill Lynch at the urging of federal regulators, the government cemented a deal at midnight Thursday to supply Bank of America with a fresh $20 billion capital injection and absorb as much as $98.2 billion in losses on toxic assets, according to people involved in the transaction.
The bank had been pressing the government for help after it was surprised to learn that Merrill would be taking a fourth-quarter write-down of $15 billion to $20 billion, according to two people who have been briefed on the situation, in addition to Bank of America’s rising consumer loan losses.
The second lifeline brings the government’s total stake in Bank of America to $45 billion and makes it the bank’s largest shareholder, with a stake of about 6 percent.
The program is modeled after a larger one engineered to stabilize Citigroup as its stock price plummeted in late November, but it appears to have had limited success. Under the terms, Bank of America will be responsible for the first $10 billion in losses on a pool of $118 billion in illiquid assets, including residential and commercial real estate and corporate loans, and that will remain on its balance sheet.
The Treasury Department and the Federal Deposit Insurance Corporation will take on the next $10 billion in losses. The Fed will absorb 90 percent of any additional losses, with Bank of America responsible for the rest.
In exchange for the new support, Bank of America will give the government an additional $4 billion stake in preferred stock. It has also agreed to cut its quarterly dividend to a penny, from 32 cents, accept a loan-modification program and put more stringent restrictions on executive pay.
The F.D.I.C. announced separately that it would soon propose to extend its guarantee on supporting new consumer lending to 10 years, from 3 years.
“The U.S. government will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks,” regulators said.
With losses mounting in the financial industry, other banks may eventually feel compelled to turn to the government for assistance, and the program could to used for other big banks. Taxpayers could end up guaranteeing hundreds of billions of dollars of banks’ toxic assets.
“The financial services sector still needs more equity,” said Frederick Cannon, the managing director at Keefe, Bruyette & Woods. “TARP was announced in mid-September and most of the initial decisions were based on the state of the economy then. The economy has gotten a heck of a lot worse.”
Government officials said that they did not have new money to allocate for this assistance, so they used funds that was already allocated from the $350 billion bailout fund for other banks or for future stabilization programs. The officials said that even though Citigroup’s stock had tumbled since November, that bank’s stock price might not be the best indicator of whether the program was working.
Bank of America’s troubles are only adding to the worries. Its shares have fallen about 78 percent, far more sharply than those of banking rivals like J.P. Morgan and Wells Fargo. Mr. Lewis had earned a reputation for taking big bets that helped transform NationsBank, a small lender, into a consumer powerhouse with bicoastal branches — and was often accused of overpaying. It snapped up Bank of America and took on its name, then followed with flashy deals for FleetBoston Financial in 2003 and then the credit card giant MBNA in 2006. That was followed by US Trust and LaSalle Bank of Chicago a year later.
Last year, Mr. Lewis’s bank also bought Countrywide Financial Corporation, the troubled mortgage giant that has come to symbolize many of the excesses of the subprime mortgage era. That made Bank of America the biggest player in every major financial service but wealth advice.
Even before the most recent deal with Merrill closed, troubles began to surface. At the time, shareholders liked the strategic fit of adding Merrill Lynch, the nation’s biggest brokerage firm, to the nation’s biggest bank. Still, they worried that Mr. Lewis had paid a hefty premium — or underestimated Merrill’s losses — in the merger stitched together over the mid-September weekend that Lehman Brothers filed for bankruptcy.
When the deal was announced, Mr. Lewis said that he had considered buying Merrill months earlier but was not comfortable with its mortgage exposure. John A. Thain, the chief executive of Merrill Lynch, said he had cleaned up much of his company’s problems. “We have been consistently cleaning up the balance sheet, repairing the damage that was done over the last few years,” Mr. Thain said.
Mr. Lewis praised Mr. Thain for decreasing risks at the firm and said that Merrill’s capital levels were in good shape.
As it turned out, more problems were lurking. In December, when executives at Merrill began tallying losses on its mortgage investments, they were found to exceed previous estimates. The write-downs will total between $15 billion and $20 billion, possibly its largest ever, according to two people who have been briefed on the situation, and include mortgage assets, commercial real estate and other credit investments.
When it notified Bank of America of such gaping write-downs, the bank became fearful it would not have the capital to cover them. The revelations, which came just weeks before the merger was expected to close, prompted Bank of America to ask the government for additional help.
Shortly before Christmas, Bank of America told regulators that it might walk away from Merrill because of mounting losses at the brokerage. But the regulators, concerned Merrill might founder, urged Mr. Lewis to press ahead. Given the severity of the situation, government officials said they needed to take immediate action to avert a systemic risk. The officials agreed to another capital infusion and said they would guarantee assets belonging to both companies.
Still, the Merrill deal has not been easy for Mr. Lewis to digest. Clashes from combining the two strong cultures of each firm have complicated the merger. Merrill Lynch’s 16,000 brokers prided themselves on their loyalty to “Mother Merrill.” Analysts say Bank of America’s managers are groomed like cogs in a giant money-making machine.
Several members of Merrill’s senior management team have left in recent weeks, including its president and brokerage chief. Scores of advisers at Merrill are disgruntled about small retention packages. And Bank of America has begun slashing Merrill employees, particularly at its investment bank. Mr. Lewis flew to New York this week to placate some bankers who were concerned about his approach, according to a person briefed on the meeting.
“He made a bet. He bought the retail broker operation, and in a normal environment that’s a gold mine,” said Brad Hintz, an analyst with Sanford C. Bernstein & Company. “The challenge that Bank of America has is, can they keep their hands off of the retail brokerage operation, because their history in terms of acquisitions isn’t really perfect.”
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