Posted on 10/19/2010 11:57:15 AM PDT by Fred
Update: CNBC confirms that the New York Fed is part of a consortium that have launched a lawsuit against BofA regarding Countrywide mortgages.
Shares are now off 3%.
Original post: Interesting! Shares of Bank of America (BAC) are getting crushed on headlines that the New York Fed and PIMCO are about to jump on the Bank of America mortgage putback bandwagon.
It's particularly surprising to see the NYFED jump in on the action, since that means they'd be actively working to weaken Bank of America.
PIMCO is private, so their only interest is making more money. It makes sense.
All told, the parties may be looking for as much as $47 billion in reimbursements for soured mortgages.
The Dow is off 200 points.
(Excerpt) Read more at businessinsider.com ...
Perhaps this is a move to control the implosion?
Any bets on which banks are next???
Nothin’ to see here, folks. This would not have happened if only they could have foreclosed on the deadbeats...
/sarc
This goes a long way to ‘splaining Gross’ purchase of RMBS paper on margin tho.
My last round of betting on banks was back in the mid-nineties. I shorted Citi and some one other of biggies, I hedged it open net zero with two good mid-sized banks. I made money net out, even though the bad big guys went up. There was still some respect for decent book-keeping.
How can anyone bet these days? Insanity rules. It’s like the mob wars in Chicago during the prohibition.
Wasn’t BofA the one bank that didn’t go along with Bambi’s first round of “bailouts” (i.e., hostile takeovers)? I think the attacks on B of A are basically payback from Obama.
C
They deserve what they get. Off-shoring, purposefully structuring their services to attract the business of illegals, using the bait and switch tactics on their clients, involved in the sub prime mess................ If there is something dubious where a bank is technically legal, yet morally reprehensible and skirting the rules to make a buck, bet your money that BoA is already doing it.
Way more fraud than that.
Control of the whole market today has seemed a bit shakier than most days under 0.
I was involved in an IT project where two divisions of an F100 company were suing each other.
I am recalling FR threads when Lehman crashed, in particular MBS that had what was considered "insurance", repurchase, repo.
If the terms of the security weren't met, like producing a specific return, the issuer guaranteed a repurchase.
Hedgers were buying both sides of the paper at fire sale rates.
FReepers kept saying all through the bailouts, etc., "Nothing has even gone to court, yet".
The banks securitized their mortgages with repo clauses. The holders of those securities expected to sell it back, if it was non-performing.
But the banks say the repo is for "market value". And the market has collapsed. The holders of the bad paper say the agreement is for par.
Looks like now we shall find out.
You could probably explain it better.
yitbos
Wells Fargo is the one that resisted it tooth and nail...but they were basically told they taking it whether they liked it or not...
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