Bank of America Death Watch Update: Lawsuit in Washington, Elevated GSE Claims

By: Saturday August 6, 2011 1:25 pm

It’s not just Eric Schneiderman. Bank of America faces a new lawsuit from the state of Washington, whose Attorney General, Rob McKenna, is a Republican.

The case involves ReconTrust, a foreclosure trustee that forecloses loans serviced by BofA and is wholly owned by BofA as well. McKenna argues in the court filing that ReconTrust has “failed to comply with the procedures of the Deed in Trust Act in each and every foreclosure it has conducted since June 12, 2008.” That’s pretty unequivocal.


Federal Agency NCUA Sues Banks Over Putbacks of Bad Mortgages

By: Monday June 20, 2011 1:30 pm

Another day, another lawsuit for the big banks – in this case JPMorgan Chase and the Royal Bank of Scotland – over their mortgage and securitization practices. Only this one comes from the National Credit Union Administration, a federal agency.

Investor Lawsuits Provide Gateway to Foreclosure Fraud Accountability

By: Tuesday March 29, 2011 3:36 pm

Even if the banks somehow get the borrower complaints out of the judicial process, I don’t see any way they can get the same deal with investors in mortgage-backed securities. And remember, investors and borrowers are pretty well aligned here. They both want modifications and not foreclosures. The difference is that the investors have the means to fight the banks and servicers on this point, albeit in a way that maximizes their self-interest.

BofA CEO Moynihan Tries Snow Job on Foreclosure Crisis in Detroit News Op-Ed

By: Thursday March 24, 2011 4:30 pm

This is pretty rich. Bank of America CEO Brian Moynihan placed an op-ed in the Detroit News assuring the residents of that ravaged community that they’re always there to help.

FCIC: Financial Crisis Was Avoidable

By: Wednesday January 26, 2011 5:45 pm

The Financial Crisis Inquiry Commission report is sure to provide a powerful reinforcement to the growing lack of faith in elites and especially the financial industry. Because they will outline, in painstaking detail, how the financial meltdown of 2008 was completely avoidable – the result of policy failure at the highest levels of government and Wall Street, failures that bordered on criminal and that have never been fully adjudicated.

The Ambac Suit: Bear Stearns Execs Double-Dipped, Committed Criminal Fraud on Investors

By: Tuesday January 25, 2011 5:20 pm

The mortgage traders at Bear, who now are spread out across the financial sector, sold purposefully bad securities to investors – emails revealed show that they told superiors they were selling “a sack of shit.” They got data on their pools of mortgages bundled up in securities deals that came back with high percentages of bad underwriting or even loans already slipping into default. They falsified that data for the rating agencies to get AAA ratings, never told the investors about the bad loans in the pools, and sold the shit as gold. But it gets worse.

They got paid by the investors for selling the mortgage-backed security, AND they got paid by the originator for taking back the bad loan. So Bear traders made money on the same mortgage twice. Only the investors could force a put-back on an originator after the security was sold – Bear Stearns didn’t have a legal claim on the loan after they sold it. They did so anyway.

FCIC Will Refer Report to Authorities for Potential Criminal Prosecution

By: Tuesday January 25, 2011 4:00 pm

Shahien Nasiripour reports that the Financial Crisis Inquiry Commission will forward multiple individuals responsible for the financial meltdown to state and local authorities for potential criminal prosecution, in accord with the imminent release of their report. If we wanted to understand why Republicans on the commission suddenly begged off the report a month or so ago, this could be the reason.

Banks, Allies Circling Wagons After Ibanez Ruling

By: Thursday January 13, 2011 7:10 pm

The banks are right to be worried, as evidenced by this flurry of activity. Homeowners and investors alike are getting smarter about the scams that the banks have tried to use in recent years. They are engaged in a more public strategy to identify criminal fraud and dictate the terms of an acceptable settlement. They have studied the games the banks play and know how to point them out to a judge. This is a good example of that.

Ibanez set off the alarm bells among the corporatist sources. But the unlikely allies – foreclosure victims, public interest lawyers, academics, investors – have been ready for this for a while.

Bank of America Admits GSE Settlement “Necessary Step” in Housing Recovery

By: Wednesday January 5, 2011 4:00 pm

I’ve given my reasons for why I think the investors and executives at Bank of America are being a little too enraptured about the deal they struck with the GSEs on put-backs based on representation and warranty claims. But it’s important to look at what they are saying, because it does offer some insight.

Bank of America said today that the $2.8 billion dollar settlement with Fannie Mae and Freddie Mac “was a necessary step” in the housing recovery. Think about what that means. It says to the country that the fraudulent reports of underwriting standards to investors, in this case, represented a real threat to the viability of the US residential housing market, the largest market in the world. Joe Weisenthal says this is the admission of a back-door bailout; I’m not sure about that. But it does say that the repurchase threat represented a systemic risk, and reaching at a settlement at pennies on the dollar reduces that risk. And the party that handed out the settlement is a government-sponsored entity.

Eleven for ’11: Ten Big Things to Watch in 2011 (and One You’ll Be Compelled to Watch Like a Car Wreck)

By: Friday December 31, 2010 1:00 pm

It’s worth mapping out what will be the biggest stories to chronicle in 2011, what I’ll be looking toward. I’m not at all surprised that this list includes only one actual set of legislation from Congress; the action will occur elsewhere next year.

So here’s the list of 10 (plus one), in a sort-of descending order of importance.

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