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LuckyOne

Could The Bank Of America ....

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It seems that PIMCO, Blackrock, the NY Fed and others are trying to force the Bank of America to repurchase up to $ 47 billion of non-performing mortgages as they did not meet the contractual representations made at the time that they were securitized.

If this happens, the Bank of America could be toast.

BNY Mellon could also be vulnerable in their role as trustee but probably less so than B of A.

http://noir.bloomberg.com/apps/news?pid=20601087&sid=ad6DTgGygD0Y&pos=1

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, people familiar with the matter said.

The bondholders wrote a letter to Bank of America and Bank of New York Mellon Corp., the debt’s trustee, citing alleged failures by Countrywide to service the loans properly, their lawyer said yesterday in a statement that didn’t name the firms.

Investors are stepping up efforts to recoup losses on mortgage bonds, which plummeted in value amid the worst slump in home prices since the 1930s. Last month, BNY Mellon declined to investigate mortgage files in response to a demand from the bondholder group, which has since expanded. Countrywide’s servicing failures, including insufficient record keeping, may open the door for investors to seek repurchases by bypassing the trustee, said Kathy Patrick, their lawyer at Gibbs & Bruns LLP.

“We now are in a position where we have to start a clock ticking,” Patrick, who is based in Houston, said today in a telephone interview.

MetLife Inc., the biggest U.S. life insurer, is part of the group represented by Gibbs & Bruns, said the people, who declined to be identified because the discussions aren’t public. TCW Group Inc., the manager of $110 billion in assets, expects to join BlackRock, the world’s largest money manager, and Pimco, which runs the biggest bond fund, in the group, the people said.

Countrywide also hasn’t met its contractual obligations as a servicer because it hasn’t asked for repurchases itself and is taking too long with foreclosures, either because of document or process mistakes or because it doesn’t have enough staff to evaluate borrowers for loan modifications, Patrick said. If the issues aren’t fixed within 60 days, BNY Mellon should declare Countrywide in default of its contracts, she said.

Trustee Duties

“The letter states a demand directed to Countrywide to cure the defaults,” said Kevin Heine, a spokesman for BNY Mellon. “It does not ask BNY Mellon to take any action. BNY Mellon will continue to perform its duties as trustee.”

Charlotte, North Carolina-based Bank of America will “defend our shareholders” by disputing any unjustified demands it buy back defective mortgages, Chief Executive Officer Brian T. Moynihan said today.

Most claims “don’t have the defects that people allege,” Moynihan said on Bloomberg Television, referring to so-called putbacks, in which guarantors or investors in mortgage-backed securities ask to return bad loans. “We end up restoring them, and they go back in the pools.”

Mark Porterfield, a spokesman for Newport Beach, California-based Pimco, Brian Beades, a spokesman for New York- based BlackRock, and Peter Viles, a spokesman for Los Angeles- based TCW, declined to comment.

John Calagna, a spokesman for New York-based MetLife, didn’t immediately return messages seeking comments. Jeffrey V. Smith, a spokesman for the New York Fed, declined immediate comment.

“We continue to review and assess the letter, and have a number of question about its content, including whether these investors have standing to bring these claims,” Bank of America Chief Financial Officer Charles H. Noski said today on a conference call with analysts. “We continue to believe the servicer is in compliance with the servicing obligations.”

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For some odd reason the image of two bald men fighting over a comb comes to mind. :lol:

It looks like the sharks are about to start eating each other.

Edited by wonderpup

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Just a few days ago JP Morgan were saying that total repurchases across all the four major banks would be limited to $55 billion because it needs 25% of the investors to club together to request repurchase and it would be diffiuclt for the investors to organise this.

Here's $47 billion just for starters and that's just for one bank :D

Although some are saying BoA will be OK because the Fed will just end up buying all repurchased bonds through QE2, presumably at 100% face value

Edited by oldsport

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Although some are saying BoA will be OK because the Fed will just end up buying all repurchased bonds through QE2, presumably at 100% face value

Funny that 'cos the NY Fed is part of the group forcing repurchase.

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If the bank of America goes under I will wet myself with laughter... their purchase of Merril Lynch during the meltdown was perhaps one of the stupidest business moves in history IMPO.

...bit like Lloyds taking HBOS ...a Gordo inspiration...?.... :rolleyes:

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...bit like Lloyds taking HBOS ...a Gordo inspiration...?.... :rolleyes:

To be fair to Lloyds, Gordum managed to cover there asses with all the mortgage rescue schemes IMO. 2008/early 09 auction rooms were filled with HBOS crud. Not so much now...

Pity, it just means the taxpayer paying for peoples stupidity for all eternity and a debt free or prudent family being denied a home. But the PTB have decided Repos are EVIL (conveniently just before an election, if you got repoed before then obviously we dont care)

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To be fair to Lloyds, Gordum managed to cover there asses with all the mortgage rescue schemes IMO. 2008/early 09 auction rooms were filled with HBOS crud. Not so much now...

Pity, it just means the taxpayer paying for peoples stupidity for all eternity and a debt free or prudent family being denied a home. But the PTB have decided Repos are EVIL (conveniently just before an election, if you got repoed before then obviously we dont care)

...was Gordo not a long distance deal maker ..?....a deal which Lloyds should have walked well away from.... :rolleyes:

Edited by South Lorne

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Guest spp

If the bank of America goes under I will wet myself with laughter... their purchase of Merril Lynch during the meltdown was perhaps one of the stupidest business moves in history IMPO.

Maybe they were just following orders :unsure:

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Just a few days ago JP Morgan were saying that total repurchases across all the four major banks would be limited to $55 billion because it needs 25% of the investors to club together to request repurchase and it would be diffiuclt for the investors to organise this.

"it would be difficult for the investors to organise this".

Don't say they've shredded the investors paper trail as well so nobody can prove who owns what at the investor end of things.

Edited by billybong

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"it would be difficult for the investors to organise this".  

Don't say they've shredded the investors paper trail as well so nobody can prove who owns what at the investor end of things.

Of course if they are really incompetent they have have shredded the mortgagee side of things.

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Looks like it's going to be a game of who has got the better lawyers.

Still I'm sure it will all work out...

i just read the excellent 'Too Big to Fail' by AR Sorkin, and among others this chap will no doubt be circling the corpse. he certainly did rather well out of the crisis, by seemingly representing everyone simultaneously, according to Sorkin's account

more jobs for the boys, on the taxpayer tab

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Following today's news of an imminent lawsuit to be filed against Bank of America by such entities as the New York Fed (which, by the way, it had to do, and not voluntarily, but merely as a function of its fiduciary duty to taxpayers through its Maiden Lane holdings, managed, conveniently enough, by Bank of America minority holding BlackRock)

Seriously this is just too surreal has someone collectively dumped acid into the global water supply?

This is just too staggering for words, so the BoA is in fact suing itself for fraud?

This is going to make a great carry on film.

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Seriously this is just too surreal has someone collectively dumped acid into the global water supply?

This is just too staggering for words, so the BoA is in fact suing itself for fraud?

This is going to make a great carry on film.

These are not the first - Wells Fargo get that accolade in 2009

http://www.businessinsider.com/wells-fargo-sues-itself-2009-7

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Seriously this is just too surreal has someone collectively dumped acid into the global water supply?

This is just too staggering for words, so the BoA is in fact suing itself for fraud?

This is going to make a great carry on film.

Good job these guys were not in charge of anything important.

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  • 145 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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