Abigail Field | Bank of America’s $500 Million Back-door TARP

Bank of America’s back-door TARP

Taxpayer-owned Fannie Mae just bought the servicing rights to a bunch of bad loans from the struggling Bank of America. Where does it end?

By Abigail Field, contributor

FORTUNE — Taxpayers may not realize it, but they just bailed out Bank of America again, this time to the tune of more than a half billion dollars.

The Charlotte, NC-based bank was one of the biggest recipients of bailout funds during the financial crisis. But Bank of America (BAC) continues to face deep problems related to its troubled mortgage portfolio and investors have battered the stock, which has plunged over 40% so far this year. That’s escalated concerns that the bank may need to raise more capital. Yves Smith at Naked Capitalism has even started a BofA death watch.

But apparently the federal government is determined to resurrect BofA: the Wall Street Journal reports the feds have just used Fannie Mae, which is controlled by the U.S. government, to infuse BofA with $500 million and ease one of the bank’s biggest headaches.

Yesterday afternoon on CNBC, Bank of America CEO Brian Moynihan mentioned that five of BofA’s six businesses were making money. The one black spot was its massive portfolio of problematic mortgages and the liabilities flowing from it. Moynihan also mentioned that BofA had just sold some “mortgage servicing rights” as part of its balance sheet strengthening efforts, but he didn’t elaborate.

According to the WSJ, Fannie Mae spent $500 million to buy the servicing rights to a big chunk of the “seven million loans still causing the most problems.” Although the $500 million is a paper loss to BofA, in that the rights were “originally worth more,” it looks like BofA is still getting a good deal because the portfolio’s “value is expected to deteriorate further.”

Check out the rest here…

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4closureFraud.org

Comments
21 Responses to “Abigail Field | Bank of America’s $500 Million Back-door TARP”
  1. May Miskell says:

    I’m in the middle of foreclosure through BofA. I tried modification several times through them all have been denied, they even said they were putting the foreclosure process on hold while the modification process was being done; but then just as they were denied I was informed that the foreclosure process had never been stopped. I made the outrageous payments in order to qualify for the modification, and after I was denied they refused to refund the money or even to credit toward the mortgage owed. They wanted it all right then. I called BofA’s CEO, he actually spoke to me… He promised to work with me. The great plan was to TRIPLE my monthly mortgage, for an indefinite length of time. I hired attorney”s and was told not to make payments while the modifications were being processed. They took my money and ran. They won’t take my calls and the bank says they don’t deal with the attorney’s.
    So, my question is: how do I find a legit attorney that can help me save my home? We are down to the wire. Someone representing BofA showed up to take pictures and get my home serial numbers. I have only recieved letters in the mail, NO Legal documents. Can they foreclose without legal notification??? Don’t they have to go through some kind of court process, or something?? How do I get all those documents that Lynn Sczymoniak talked about?? Do I just go to my local BofA?
    Please help!!!!!!!!!
    Mary

    • lvent says:

      May, make them prove they own your loan. A loan mod is a set up to fail….That loan mod, if you even get it, is set to balloon and detonate…..The debt they created is unsustainable….Don’t re-establish a new debt without making them show proof. After they set you up to fail they will have an easier time fraudclosing on you…..Find out if the loan is secure at your County Recorder of Deeds office…It most likely is not..

    • qwester says:

      Mary or is it May,
      You must mean that you have received no legal documents regarding modification of your loan. In what court is your foreclosure being prosecuted? The clerk of that court will provide you with the names of pro bono and low cost legal assistance firms supported by the State and the county you live in. Do not go to BOA. Do not sign anything. BOA and all modifications of mortgage includes surrendering you right to sue. Once you sign, they just stop the mod and continue the foreclosure. The foreclosure may have been suspended while you were being considered for a modification and then reinstated after the mod was denied. The letter of denial was a legal document. BOA would not send you the forms after that. Google “BOA morgage modification (your state abbreviation here)” for adnice. Your comment is so naive that I cannot believe you are for real. If all you say were true you would have been out of your home some time ago. Could it be that you and Ivent are inventions of BOA who posts your mush and Ivent’s flames to discourage intelligent commenting on this forum? Can 4clrfrd admin block the useless distracting abusive comments (including mine if you see fit)?

    • Bobbi Swann says:

      Mary – what state are you in? Foreclosures are treated differently – some are judicial and some are non-judicial. And don’t count on your local BofA to help you; they are only going to give you garbage and certainly won’t assist you in going up against them in foreclosure. If you are in Flori-duh, you can call me. (727-251-7897)

      • lvent says:

        May, Let’s please not assume any new debts from any of these crooks until they show proof that they own your loan…This debt is most lilely an unsecured debt and they lost track of ownership of your loan most likely at origination……In the podcast at this website a few weeks ago, with attorney Robert Stone, it was clearly stated that 40 million homes are NOT legally foreclosable. These pretender lenders use many intimidation tactics to try and make you fear losing your home that they don’t even own the loan to…That is extortion…there should have been criminal indictments being dropped by the thousands a long time ago…This is an ongoing crime syndicate, a rogue regime that is being allowed by the U.S. GOVERNMENT TO TERRORIZE THE AMERICAN PEOPLE…Rick Perry was right about Bernanke is a treasonists and so is Obama, Holder, Geithner and the majority of members of Congress for allowing this crime spree to continue..

  2. Hell No, No More Bail-OUTS says:

    So does this make us as tax-payers the ones that hand money to the our servicer-cum-Fannie-Mae to in turn pay on the monthly loan payments on loans that are in securitized pools and where the ‘borrower’ has stopped paying?

    Remember that until they get the property foreclosed, the SERVICER makes up the payment to the investor-owned trust pool on those supposedly defaulted loans. At least, supposedly the payment is being made by the servicer.

    If the loans are ones that B of A owns the actual paper, that would be a different case. But much of what they were servicing was the crap they did not even properly transfer into the securitized Trusts.

    Old Aunt Fannie may have just been suckered for far more than the initial outlay of the SUPPOSED value of the servicing rights.

    And also, WHY is Fannie BUYING any servicing rights when Fannie normally has some entity such as Wells, Chase or B of A act as the servicer of loans OWNED by Fannie?

    This does not pass the ‘sniff’ test.

  3. marvin Keith says:

    Headline says 500 “Billion”, body says 500 “Million”. Big difference!!

  4. talktotennessee says:

    Fannie Mae is a conduit, think funnel. Quote from article:
    “And if securitized loans are involved, which they most likely are, the sale also limits the BofA’s potential liability to investors for its current servicing violations. Finally, the $500 million is surely more than the servicing rights are worth in an arms-length transaction.”
    The key thought above is to escape investor suits for servicing violations. B of A has already paid off some of Coutrywide’s junk but this will get them out from under the liability or legal responsibility for both their’s and Countrywide’s errors.
    This is a really dirty deal if the primary goal is to remove their liability for forgery, fraud, etc. Always say if it looks like a duck and walks like a duck . . . . .

    • lvent says:

      Chris Whalen was on CNBC this morning and spoke the TRUTH….. He said he would NOT be investing in the TBTF………Chris also said that FANNIE, FREDDIE AND BOFA ARE JOINED AT THE HIP AND THIS WAS ALL A HITLER PLAN…………………………….FANNIE AND FREDDIE ARE WHO SET US ALL UP TO FAIL BY APPROVING THOSE LIARS LOANS, BACKED BY THE U.S. TAXPAYERS CREDIT CARD AND THEY ARE WHO BOUGHT BACK THOSE VERY SHIT LOANS FOR PENNIES ON THE DOLLAR…..THE IMF IS THE BIGGEST SHAREHOLDER IN FANNIE MAE BLOOMBERG REPORTED…….THE IMF HOLDS ALL OF THOSE WORTHLESS BONDS……AND ALL OF THE GAMBLES THAT CRAPPED OUT ARE NOW ALL IN A GLOBAL TRUST…IT WAS ALL A SCAM, A FRAUD…………THE CASINO IS CLOSED…………

    • lvent says:

      Securitized Loans are involved? LMAO!!!!!!!!!! Now we have to shut down the casino at the Fed between them and the Treas……Bernanke is collecting trillions in mortgages in which he uses to by treasuries with reported Bloomberg……….Bernanke and Geithner are criminals and they must be stopped…….They are continuing the mortgage fraud ponzi scheme by recycling old mortgage debt and are causing economic stagflation………They are conducting an ongoing criminal enterprise Ponzi Scheme with old debt……This is despicable………..The people who are continuing to pay the mortgage have no idea they are contributing to the poor economic conditions by allowing the re-laundering of old debt………..

  5. talktotennessee says:

    No one should be surprised at these boardroom, back door deals. B of A is going to be saved. Watch for B of A to be granted a form of ‘amnesty’ or an exit. Lots of slips in transfer ability that evades issues rather than straightforward action. Banks operate under lots of names. Look at AMC and Wells Fargo. Doesn’t everyone have 2-3 names for their shell game? Isn’t that what MERS is? A name representing lots of names-all hidden. Smoke and Mirrors.
    SOP=Standard Operating Procedure for the banking industry: under the table, through the woods, over the top, everywhere but straight honesty.

    • lvent says:

      Than the people have to stop supporting the TBTF………..The S&P has been robbing the 401 K’s with impunity for weeks……….Stop investing in these foreign criminal institutions………………Stop using the FDIC banks, their credit and their debit…….We are aiding abetting the tyranny….

  6. woodknot says:

    Bank of America-steals from America’s Tax Payers again-using FANNIE & TREASURY
    Unbelieveable-this deal could not have happened overnight……..
    Who approved this “deal” ???
    FANNIE IS BROKE !

  7. Debbie says:

    Let Fannie Mae and Freddie Mac fail. They don’t need any bail outs. They continue to make STUPID decisions. I hope Bank of America continues to bleed despite this $500 million. It needs to fail.

  8. Fredy Gandy says:

    OH HELL NO!!!

  9. leapfrog says:

    M*ther F*ckers. I wanted this POS bank to go down in flames, like it FULLY DESERVES.

  10. lvent says:

    The U.S. GOVERNMENT is ALLOWING THE EXTRACTION OF OUR WEALTH….THEY CONTINUE TO KICK THE CAN DOWN THE ROAD……ALL OF THE DEBT IS UNSUSTAINABLE BECA– USE THE RULING ELITE INTENTIONALLY COLLAPSED THE ECONOMY …..Chris Whalen spoke this morning on CNBC about how we should not invest in the TBTF and how this was all a Hitler Plan……..STOP USING THE FDIC INSURED BANKS…AND BORROWING MONEY FROM THEM AND USING THEIR CREDIT……………………..THEY ARE FOREIGN OWNED AND OPERATED CROOKS WHO ARE OWNED AND CONTROLLED BY THE NEW WORLD ORDER……………………………….

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