Free Republic

One of the straightest paths this country could take toward Bank Bailout 2, the Sequel, would be through forcing financial institutions to buy back the lousy mortgage-backed securities they sold before the meltdown. Large-scale buybacks could open gaping wounds on bank balance sheets, a risk Bank of America (BAC) is particularly vulnerable to because it swallowed Countrywide's gigantic -- and now infamously fraudulent -- mortgage machine. Regardless of that risk, banks should have to follow the rules of their contracts, and the law. But getting BofA to buy back its mortgage junk won't be easy. As of June 30, 2010,...

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...

America's biggest names in banking have been slapped with a fraud lawsuit in Indianapolis by a home loan bank trying to recover $3 billion. In a hangover from the 2000s' easy-money spree, the Federal Home Loan Bank of Indianapolis filed the lawsuit on Monday in U.S. District Court. The lawsuit claims investments bought from 37 banks, including Bank of America, Goldman Sachs and JP Morgan, are based on home loans whose paperwork is riddled with inaccurate appraisals and other flaws. Federal Home Loan is one of 12 banks in the nation set up by the U.S. government in 1932 to...