Wednesday, October 20, 2010, PM | 8 Comments
The Federal Reserve Bank of New York has joined many others and is demanding that Bank of America (BofA) buy back billions of dollars worth of mortgage securities that have been continually talked about for some time. These mortgage securities are afflicted with documentation that were never reviewed properly.
Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, according to people familiar with the matter.
Housing Boom and Bust
The accusers contend that during the housing booming market, BofA cut corners when it was issuing mortgages. They also blame that it has been foreclosing on struggling borrowers during the bust too swiftly without giving them the benefit of “due process.”
Isn’t BofA one of the banks that the Treasury Department has been helping through the financial crisis over the past two years? Now a branch of the Federal Reserve is putting itself directly in confrontation with the bank and I suppose indirectly with the Treasury. The current situation seems to be a big drama of high-stakes confrontation – the big guns so to speak.
The problem I see is that when the Treasury helped the bank, it apparently did not put conditions with their package of how best to use the money. Remember the Congressional panel slammed the Treasury for not keeping track of the bailout money – also known as the Troubled Asset Relief Program, or TARP – that was given to banks and other investment institutions.
What the f*** is going on?
Some media reports point out that the government finds itself in the awkward position of being an unhappy private investor pressing for its rights to be enforced.
What kind of shitty statement is that? The government pressing for its rights to be enforced? What the f*** is the world coming to? After investing billions of dollars of public money, is that the best the government can do? Pressing for its rights to be enforced? The Treasury gave out the money with no conditions attached to it, period. Now we all must bear the consequences we shouldn’t have to begin with.
The investors include Blackrock, Prudential, MetLife and Pimco. They argue that the banks have not kept accurate paperwork on the loans that were sold and they may have taken shortcuts to save money and time. Consequently, BofA and others have temporarily put a halt on foreclosure sales.
These big investment firms say they have also been upset that Treasury and the banks have been too quick to restructure mortgages, which hurts investors. No kidding. Hurting investors by banks and government? Isn’t the government supposed to protect against such calamities? Why should it be a part of something of this nature, as the firms have accused the government?
The law will put its wrath one day upon the injustices committed against the investors big and small, if only it was swift enough. Anyway, it looks like somebody is gonna sue somebody in the coming months. I wish I was a “lawyer of suing.” I would have retired early.
On report says
Courts are hashing out the complex legal questions surrounding the way judges review foreclosures. On Tuesday, an emergency measure approved by Maryland’s highest court empowered judges to bring in outside experts to review questionable papers.
I hope the outside experts are not hired from these banks. That has happened too many times in our previous financial life.
In a Nutshell
It’s a big drama that is being played on the financial stage of the nation. Below the stage is a big swamp where the investors, big or small, have been swimming along with the anacondas of the financial world. I hope the government, as some have suggested, is not a part of it. But not to worry. It has not been a part of anything anyway.