Bank Of America Just Eliminated Its Fannie And Freddie Putback Risk

The Business Insider ^ | 1/3/11 | Joe Weisenthal

[FromLori]

It's a new year, and Bank of America is moving quickly to put to bed ongoing questions about the mortgage repurchase or "putback" risk that has dogged the stock for the past several months.

The bank announced this morning that it will take a $3 billion charge to settle the last of its mortgage putback exposure with the GSEs, Fannie and Freddie.

The stock is rallying on the news.

That being said, this doesn't end the issues related to other entities, such as the bond insurers, PIMCO, and other owners of private-label mortgages who are also seeking to force the bank to buy back bum mortgages. But as an indication that the bank is trying to end this now, rather than let this drag out, it's a good sign

[FromLori]

ping

Related story

http://finance.yahoo.com/news/Bank-of-America-Announces-bw-53521647.html?x=0&.v=1

[Chunga85]

Looks like more of a publicity stunt than anything else. The Fraud is all patched up...all systems go. NOT.

New Jersey Legal Services Report & Recommendations on Foreclosure Fraud

Supporting Docs

[Attention Surplus Disorder]

I’d be heartily surprised to arrive at the belief that BAC’s dumpage onto FNM/FRE wasn’t thirty to fifty times that amount. Don’t breathe that sigh of relief just yet...you only THINK they’re fessing up. Don’t be silly.

[Chunga85]

Great story at forbidden Huffpo by William Black on "Liar Loans".

$nip>

The purpose of liar's loans was to create endemic fraud throughout the mortgage process - from origination to the sale of collateralized debt obligations (CDOs) backed by liar's loans ("cradle to grave" fraud). The lies in liar's loans were so endemic and so egregious that the financial version of "don't ask; don't tell" was essential at every step of the process. Liar's loans were also perfect for the loan origination level variant of "don't ask; don't tell."

$nip>

Just more "anti-business" drivel I guess..don't read it.

[Admin Moderator]

DO NOT post Bloomerg content in the comments. Doing such may put your posting permissions at risk - you know better by now. You won’t get another warning.

[NeoCaveman]

I’d be heartily surprised to arrive at the belief that BAC’s dumpage onto FNM/FRE wasn’t thirty to fifty times that amount. Don’t breathe that sigh of relief just yet...you only THINK they’re fessing up. Don’t be silly.

Absolutely. The Fraud is much bigger than this.

[FromLori]

I guess you can’t post even a snippet of Bloomberg I always thought you just couldn’t post their articles so anyway here’s the link (I believe it’s ok to post that since you can post link only)on the related story Whalen calls it a gift to BOA doesn’t surprise me with Jamie Dimon’s ties to obama.

http://www.bloomberg.com/news/2011-01-03/bank-of-america-sees-2-billion-charge-on-home-loans-insurance.html

[Chunga85]

CNN has it now too. I love the comments. Everybody can see it for what it is...a cover-up.

Bank of America in $3 billion mortgage settlement

I'll go out on a limb and suggest the taxes BOA skipped out on more than cover the "vig" "settlement".

[Rebelbase]

“PIMCO, and other owners of private-label mortgages who are also seeking to force the bank to buy back bum mortgages.”

I’ve got a good second hand intel source that says the PMI companies have contracted with specific appraisal companies to provide retroactive appraisals on all of their insured loans that have gone into foreclosure and a significant percentage of the appraisals appear biased to support the PMI side of the argument.

The banks are spending a lot of money to defend against PMI companies failing to pay off on claims based on shoddy PMI supplied valuations.

[Attention Surplus Disorder]

It is, especially considering the semi-truckloads of Countrywide sewage BAC was forced to eat. Note that this settlement ONLY covers BAC’s exposure to FNM/FRE putbacks, not private label MBS stuff it sold...or bought...which I’d suspect has considerably more notional value than the actual face-value morts BAC traded to FNM...and of course, we can be absolutely certain that bad paper put back to FNM will NOT ultimately be put back onto BAC. Instead, it will vacation decadently at some Caribbean island, sipping Margaritas in some Fed-designed SPV.

Because if there were accurate accounting of 1/10,000th of this stuff, the world would implode.

[khnyny]

The real deal is that everyone (analysts) expected BOA to have pay up much, much more. This is a gift from the government and probably deserved since they engineered BOA taking on Countrywide’s debt in the first place. BOA stockholders should be very happy today - the stock has shot up. Lol.