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Feds ask for $2.1bn penalty for BOA fraud

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Mortgage Professional America | 31 Jan 2014, 06:13 AM Agree 0
Prosecutors want Bank of America to pay a large fine as punishment “for their culpability and bad faith"
  • being human | | 31 Jan 2014, 09:15 AM Agree 0
    I still don't understand why the government isn't going after mozilo his family and any of the money produced by the sale. He essentially is another madoff.
  • Dan | | 31 Jan 2014, 09:31 AM Agree 0
    Being Human is correct! The real culprit is living the lavish life without consequences. I'm not a fan of BofA but didn't the sitting secretary of treasury Mr. Paulson exert considerable pressure on BofA to purchase C.W. if memory serves me right.
  • Elaine | | 31 Jan 2014, 09:33 AM Agree 0
    It's a mystery to me. B of A was virtually coerced into buying the company in order to prevent its collapse. This is definitely one time when it should have been allowed to "fail".
  • peubanks | | 31 Jan 2014, 09:45 AM Agree 0
    sounds like their old fast and easy product
    or nick named
    "fast and sleezy"
  • John Burns | | 31 Jan 2014, 09:58 AM Agree 0
    The numbers don't add up in this article. How can the bank (BofA) make over $1B off of mortgages that were bad with Fannie and Freddie? Underwriting standards were sacrificed also by Fannie and Freddie, so they also could get the volume, they are not inocent bystanders. In the end it was all perpetuated by the greed of the Federal Government under the guise of consumer discrimination. All these articles are about what happened 7 to 15 years ago. The problems today are the regulations put in place now for what has been fixed for the last 7 years, and are not even issues in todays lending world. They are trying to punish people and companies that weren't even involved in the events. This is nothing but a money grab because they think they have the power to do so.
  • Cheryl M | | 31 Jan 2014, 10:03 AM Agree 0
    So it's okay for Eric Holder to go after b of a but if the CFPB does it p-on them? Isn't Rakoff an admin law judge for the CFPB too? Funny this is an old case DOJ has been working on this for past 4 years. Seems like the CFPB is helping out taking the load off DOJ, State AG offices, etc..Everyone has a piece of it.
  • Bill | | 31 Jan 2014, 10:09 AM Agree 0
    Since BOA was heavily coerced into saving Countrywide's butt from going under by Paulson over one weekend, and was not allowed to do standard due diligence before the agreement, by Treasury...this is nothing more than scapegoating on the Fed's part and a money grab from the deepest pockets at the table the FEDS set high pressured BOA into in the first place. The No-Justice Department ought to be shut down and be forced to validate their policies over the last "6 years". Like that will happen...
  • Jim | | 31 Jan 2014, 10:56 AM Agree 0
    BS. B of A made business decision because they thought they could make money off of CW. Because it went bad they and some of you want to plead ignorance of what Countrywide was doing. Everyone in the industry new because we all lost deal to them or used their product. They should get hit and hit hard.
  • Traci | | 31 Jan 2014, 11:24 AM Agree 0
    Does anyone wonder if the DOJ and CFPB keep going after banks with deep pockets - the banks will stop lending at some point? The risk with regulations now and the future liabilties would make anyone cringe...and yet this is suppose to entice the private sector to get back into secondary lending??? I agree BofA is being used as a scapegoat and being raked over the coals every which way, when the administration pushed these programs out and heavily marketed them. Failed govt policy - but the govt doesn't take blame for it's own actions.
  • Art | | 31 Jan 2014, 11:57 AM Agree 0
    Boohoo it's about time that the banks pay for nearly bankrupting in our country.!!!!!!!
  • Jim | | 31 Jan 2014, 12:57 PM Agree 0
    Could B of A has negotiated a limit to its liabilities in bailing out CW? My guess is they thought that the liabilities were less substantial then the potential gains? I do not beleive there were many in our industry that would have predicted how bad CW, in spite of thier bad behavior, would be when the dust settles. Yes, Fast and Easy was well known, but the distruction that we see today could not have been anticipated.
  • John C Durham | | 31 Jan 2014, 01:27 PM Agree 0
    Elaine, BofA needed help to stay afloat. (They almost 4X more insolvent now than then). Paulson with other TBTF banks decided who was going and which ones were "staying".

    Truth is that all six of the TBTF banks were (and are, even more so) insolvent and should have been taken over, leaders put in jail with Madoff and gradually sold off to smaller banking operations.

    Had that been done, the lights would have come back on by now. Instead, we have had less recovery than the same amount of time in (the first years) of the Great Depression. Wall Street TBTF banks are a huge drag on the economy and their rotting paper is dangerous as seen in the Detroit case.
  • Evelyn Santiago | | 12 Feb 2014, 11:25 AM Agree 0
    I shed no tears for BoA, as they are the worse of the bunch, they will do whatever they can to get out of any type of punishment. They will sell mortgages and force peopel to start their mortgage modifications and short sales so that they can play around with the money that should be going to homeowners relief. They should be forced to pay the higher amount and be monitored by real 3rd parties that have no incentive to make money off the oversight. They rolled the dice thinking they could make much more money than they had and this is just a small slap on the wrist....have them stop giving bonuses to their senior executives for a year. They are making it up by increasing fees, getting rid of free checking, consolidating across all business lines, so they will continue to make huge profits!
  • John C Durham | | 12 Feb 2014, 01:01 PM Agree 0
    "They should be forced to pay the higher amount and be monitored by real 3rd parties that have no incentive to make money off the oversight." Uh, not good enough. Let's review:

    A handful of TBTF banks has issued, worldwide, $1,600 Trillion in Derivative Securities! (As one of the best living economist exclaimed about that figure, "It's more money that there is in the Universe".) Okay? Now, the question is, how can all these be SECURITIES? That is, supported by something of VALUE? They are not securities really, of course. They are FRAUDULENT SECURITIES. Now, if everything in our JUSTICE SYSTEM and our ECONOMIC SYSTEM is going to hold up $1.6 Quadrillion of fraudulent securities, then we all are going to have end up eating our children.

    The fact that States, Cities, Pension Funds continue to send their money to Wall Street every day with the Sun goes down IS UNBELIEVABLE. In June of '07 when a very large hedge fund (what am calling a hedge fund? Chase isn't a bank anymore...but, only a hedge fund really.) went down and the credit markets froze up, there were only $700 Trillion in mostly Fraudulent Securities out there. Fourteen of Earth's largest banks were all insolvent. Congress and the Fed have bailed them all out, over and over, for a total of $26 Trillion in real money. But, if they bring all their hot derivative paper ONTO THEIR BOOKS, they are insolvent MANY TIMES OVER! Can Chase cover their $100 Trillion derivative paper with VALUE? How much of it can they cover? 25%? 10%? 1%? .01%?

    States are going to wake up one morning and find that they aren't in any different situation than Oakland or Detroit or several other cities that are holding worthless paper and STILL HAVING TO PAY MONEY, EVEN THOUGH, THE WAY THE DERIVATIVE WAS WRITTEN, HAS, OR SOON WILL, FRAUDULENTLY BANKRUPT THEM. The CYPRUS treatment!

    The way is cleared with the American banking system for Wall Street to seize everything that WALL STREET HOLDS for the States, Pension Funds, Cities, Insurance Companies, Savings, etc., on a scale that will make what people lost in their retirement accounts in the '08 bank failure look like a penny on dollars. One morning, soon or later than soon, the money will have been "BAILED IN" to save Chase and their like...and the United States WILL GO INTO CHAOS!!!

    Now, knowing all this, to my mind, the Government must seize all of these banks operating in this country, foreign or domestic, and every single asset these have and which the government can grab for The People, including every dollar in bonuses given out for their CRIMES, I mean EVERYTHING that can be scraped together that these devils have, grab it, break it up and sell it off to legitimate banks. EVERYTHING!!!

    While this still will not undo the horrors caused by acts of these banks in LIVES OF MILLIONS OF HUMAN BEINGS, IT IS THE BEST WE CAN SUGGEST, BECAUSE YOU CAN ONLY TAKE EVERYTHING THEY ACTUALLY HAVE.
  • Afat993 | | 26 Dec 2014, 07:20 PM Agree 0
    WOW! Excellent post John!!! I agree with everything you said. People do not understand the derivative side of this equation and what an absolute disaster they have created. How do you allow this casino to go from $24 trillion in 1999 to $700 trillion in 2008 to $1.6 quadrillion while going through two separate crashes. Gee, I wonder if getting rid of glass steagull in 1999 had anything to do with it. Unbelievable! Also, how can the govt keep FINING these banks and using the word FRAUD at the same time? If any of us were doing FRAUD we would not be paying a fine, we'd be dragged to jail. Ridiculous!!! Instead most of countrywide's execs who created this monster just walked away, created Pennymac and started buying the same crap mortgages they sold to Fannie and Freddie (AKA the taxpayers) back for pennies on the dollar to foreclose on and sell them to their other buddies at blackstone and alike. Pathetic!!
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