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Bank of America in $10 Billion Foreclosure Settlement

Business  (tags: abuse, americans, Bank Of America, business, consumers, corporate, corruption, dishonesty, economy, ethics, finance, foreclosures, government, investments, labor, lies, marketing, money, politics, society )

- 1961 days ago -
The settlements and transactions and other charges will result in Bank of America posting only a small profit for 2012's fourth quarter. The bank is due to report results on Jan. 17.

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Kit B (276)
Tuesday January 8, 2013, 11:10 am
(File photo, Bank of America building. (photo: AP)

Bank of America on Monday announced roughly $11.6 billion of settlements with mortgage finance company Fannie Mae and a $1.8 billion sale of collection rights on home loans, in a series of deals meant to help the bank move past its disastrous 2008 purchase of Countrywide Financial.

The settlements and transactions and other charges will result in Bank of America posting only a small profit for 2012's fourth quarter. The bank is due to report results on Jan. 17.

Bank of America is paying $3.6 billion to Fannie Mae and buying back $6.75 billion of bad loans from the mortgage company to clear up all claims that government-owned Fannie Mae had made against the bank.

Fannie Mae and its sibling, Freddie Mac, have been pushing banks to buy back loans they sold to the two companies that never should have been sold to them because the loans did not meet the companies' criteria for purchasing.

Bank of America said most of the settlement would be covered by reserves, and another $2.5 billion, before taxes, that it set aside in the fourth quarter.

A separate settlement over foreclosure delays will result in Bank of America paying $1.3 billion to Fannie Mae, the mortgage company said. Bank of America had already set aside money to cover most of that, but took another $260 million charge in the fourth quarter to cover the balance.

Bank of America also sold the rights to collect payments on about $306 billion of loans to Nationstar Mortgage Holdings and Walter Investment Management. Nationstar is paying $1.3 billion for the right to service some $215 billion of loans, while Walter Investment is paying $519 million for the right to service about $93 billion of mortgages.

Reuters first reported that Bank of America was talking to Nationstar and Walter Investment on Friday.

After the announcement, shares of Bank of America traded higher in pre-market trading.

By Reuters Staff -

Kit B (276)
Tuesday January 8, 2013, 11:12 am

Thanks Barbara K for sending me this story.

Fiona O (565)
Tuesday January 8, 2013, 10:30 pm
Great, great news. Thank you, Kit for spreading this good news.

Ilsy Myers (0)
Tuesday January 8, 2013, 10:57 pm
Nice my riend is going to be very happy after all the paing she suffer to keep ther home.

Robert O (12)
Wednesday January 9, 2013, 12:04 am
Thanks Kit.

Giana Peranio-paz (398)
Wednesday January 9, 2013, 12:28 am
Thanks Kit.

De D (96)
Wednesday January 9, 2013, 1:13 am
Hey, thanks!

Cole Bands (10)
Wednesday January 9, 2013, 3:18 am

Barbara K (60)
Wednesday January 9, 2013, 5:25 am
Thanks for posting, my friend. There are charges filed so far on at least 2 other banks. The New York Attorney General has over 800 lawyers working on investigating and filing charges. They have been working on it for a couple of years. There is so much corruption and the banks trying to cover it up, that, as the Atty General said, it will take a while to uncover and prove all the corruption the banks did. I watched him speak about it nearly a year ago. He was looking for more lawyers at that time. It is a massive project and I'm glad to see that they are making headway and filing charges now. I only hope that funds go to those people were wronged and not just to another bank. People's homes, or those of equal value, should be returned to the rightful owners who were illegally foreclosed on, even if it comes out of the pockets of those with big bonuses they didn't deserve.

Gloria picchetti (304)
Wednesday January 9, 2013, 8:37 am
Don't you think they will recover the loss from customers another way?

Kit B (276)
Wednesday January 9, 2013, 9:23 am

When the "bonus packages" began then Chair of the SEC, William Cohen smelled some bad fish in the brew. The idea that without adding these bonuses the companies (corporations, banks, investment brokerages, insurance companies...etc...) could not compete was as ludicrous then as it is today. The idea in remuneration for services rendered applies to all levels of employees, but somehow the high place "wheeler dealers" became exempt from normal "pay for work" and were paid in outrageous amounts of of money. I remember watching the C-Span broad cast on Book Sunday (2008) - each author spoke about their books on the catastrophic financial crisis, how they came to write those books, and their research. The first person to take the mic from the audience was John Mack, CEO of Morgan-Stanley (before it's collapse) he was direct and painfully honest. He recommended that all people read the books presented as he had. He also said the neither himself nor any other CEO cared about "your money or grandma's savings" he went on to say, "I make an obscene yearly salary and beyond that I am guaranteed nearly five times that amount in yearly bonuses. You have allowed this, you the people will do my task, you will find ways, as you have, to justify the amount of money paid to myself and all of high placed employees of the major corporate entities, why should we care about your money? It's ours to play with, the profits are high for us, the damage great to this country. It will continue. " ( para-phased from memory)

BOA is far from being the only bank guilty of these charges as Barbara alluded, there is great profit for them in the foreclosure business. There was also enormous wealth gained in the foreclosure game. Just what these law suits can hope to achieve is yet to be discovered. For millions of Americans the dirty deed is done. As Matt Taibbi has said, and clearly stated in his newest column, ' this is the most direct "Ponzi" scheme perpetuated on the American people, and done so with the full consent of Congress.' Though many in Congress are squealing, they were lied to, one has to wonder if they read the Bill before they signed off on this gouging money scam. In the past, nothing was too big to fail, because a good idea for a business will be taken up once again by those who can and will run that idea(s) again. If we lost the big banks...etc.... our economic situation was said to be in ultimate ruin. Even with the bail outs we are sitting one edge of ruin. If the wealth or ownership of the wealth of a nation lies within just a few hands then that nation is doomed to failure. We are not making history here we are repeating history.

Kit B (276)
Wednesday January 9, 2013, 9:28 am

** sorry typed too fast and didn't catch this * --- perpetrated on the American people.

. (0)
Wednesday January 9, 2013, 10:07 am
Fannie Mae and Freddie Mac should have been closed a long time ago. Posted.

Kit B (276)
Wednesday January 9, 2013, 10:23 am

Good regulations would have prevented or greatly moderated all of this, and sub prime mortgages are not the source of our serious problems, lack of regulation is the axis point here. If these "sub-prime" mortgages had been thoroughly checked and guaranteed by the underwriters than we wouldn't have many of these scandals.

The word "sub-prime" mortgage was once used only to separate a "white" mortgage from a "black" mortgage applicant. Freddie Mac and Fannie Mae were once designed to assist both the sub-prime and those applying for mortgages that were on the edge. Some did not have the needed 20% as down payment, others had less than sterling credit. However, for the vast amount of those who were to tenuous for a regular mortgage only those homes that were not beyond the buyers means were approved. (example - if the buyer was consistent about paying their apartment rent at a given figure than the purchase of a home could not go beyond that figure paid in rent) Then came the avalanche of the credit default swap, essentially a gambling scheme to defraud, the public.

Lynn Squance (235)
Thursday January 10, 2013, 9:11 pm
Is there no moral fiber in these banksters? IT is good that something is happening with Bof A. But, unless I missed something, the profits of one financial quarter hardly do justice to the financial mayhem created. There needs to be full restitution and CEOs occupping a cell at Leavenworth or other such reputible location --- not club Fed.

Cole Bands (10)
Monday January 28, 2013, 7:59 am
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