Excerpt: "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."
File photo, Bank of America building. (photo: AP)
Bank of America in $10 Billion Foreclosure Settlement
07 January 13
ank 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.
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This is also what happens when the non-profit industrial complex decides to "help" individual homeowners facing foreclosure (and for which they receive lots of funding from both the gov't and the banks) instead of organizing the millions who were known to be facing foreclosure to put up a unified and collective fight against the banks.
So, while we rant against the banks and the gov't for doing nothing to help homeowners it is also long past time that we also take a critical look at the role of the non-profit industrial complex for "managing" problems instead of looking to solve them and truly help those who have been hurt most.
This is just another example of the top, in this case being our political leaders, not realizing that the cure lies not in resolving the problems of those that are also at the top, the banks, but in solvcing the problrems of the individual.
Just as resolving the employment problems lies not in helping business get money so that they will create jobs, but rather in creating jobs so that businesses will get money to create needed jobs.
In the case of foreclosures, the best outcome would have been that EVERYONE that took a loan out during the bubble got back their cut of what the banks stole. If the loan was still outstanding, it comes off the loan as principal. If not, then its a cash or an annuity type of payment.
If this was done early in 2009, we would be well back into a booming economy, and the Tea Pot Heds would just be a glimmer in Dick Army's eye.
So, in the spirit of building the economy by helping the individual over the corporation. Bottoms Up!
PAY A FINE. then go on about your business screwing everybody over. No jail time. Not one banker has gone to jail...
but if you - average citizen - if you embezzled or lied like the banks did - you are going to jail, lose your property and voting rights for years.
With this fractured perverted capitalist system the basic agenda is:
Profit is more important than you.
Until these occur - we, the people (47-99%) will bet screwed until there is no more middle class!
Oh yeah, quit giving "entitlements" to OIL companies, banks, GE, Haliburton, etc - but this thought also requires a law passed on Congress.
Oh I forgot "Congress is more interested in passing abortion laws than taking care of the economy!!!!"
This means they had a deal when they settled, i.e. they ripped off Freddy and Fanny.
Again.
My heart bleeds for them.
"After the announcement, shares of Bank of America traded higher in pre-market trading."
What a relief! All is not lost.
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