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VERDICT: BOA liable for fraud in Hustle case

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Mortgage Professional America | 24 Oct 2013, 06:00 AM Agree 0
A federal jury on Wednesday found Bank of America liable for defrauding Fannie Mae and Freddie Mac under its Countrywide unit
  • John O | | 24 Oct 2013, 08:23 AM Agree 0
    I will never forget how hard I laughed when B of A anounced they were buying Countrywide. Angelo M. is probably still laughing...
  • Lisa S | | 24 Oct 2013, 09:04 AM Agree 0
    So when is Jim Johson at Fannie Mae going to go to trial? I suspect no time soon. He's probably having lunch with Angelo M at this very moment...
  • Sheila S | | 24 Oct 2013, 09:15 AM Agree 0
    I am pretty sure Bofa was strong armed into the Countrywide purchase. It was just not as public as the Merrill debacle. Now Bofa is paying with a lack of support from the golf buddies at the fed and in gov't. Having to pay for mortgages closed by an entity they absorbed to help save our economy? Interesting. I guess all the money the banks made was straw revenue after all... which is what the printing presses print and the fed buoys with bond sales (and purchases) anyway. They are all playing nicely in the sand box together until someone disagrees. Gets ugly and the bullies come out at that point.
  • Russell V | | 24 Oct 2013, 09:27 AM Agree 0
    Didn't the Government pressure BofA to acquire Countrywide? Now they sue them for bad business that they did not originate or sell to Fannie/Freddie? What requirements did Fannie & Freddie have to but these mortgages ? Did the even look at them? Hmmmmmm
  • Ron S | | 24 Oct 2013, 09:28 AM Agree 0
    So will this be another case of a just a fine with nobody going to jail. Want to dissuade future problems? Start putting people in prison - for al long time.
  • Joanne G | | 24 Oct 2013, 09:43 AM Agree 0
    As much as I despise B of A, they were literally forced by the government to purchase Countrywide. Now they are being convicted for what Countrywide did before B of A owned them? Crazy, and just not right. Another case of the government not taking responsibility for its own ridiculous schemes.
  • David Schoessow | | 24 Oct 2013, 09:47 AM Agree 0
    I'm not even sure if BOA even ran Countrywide when they were doing business as Countrywide. It seems unfair to punish BOA for practices they had nothing to do with. Countrywide went solely off credit score assuming that clients with good credit should be able to provide less documentation. Remember the "fast and easy" mortgages? Little documentation but a 700 score was required.
  • Sheila S | | 24 Oct 2013, 10:01 AM Agree 0
    Bofa did not acquire CW until WELL AFTER the mess had hit the fan... This could be considered bullying really. Unless this was what they all agreed to behind closed doors, which is not far from possible from what I have seen. Maybe it was to avoid jail time.... It is only paper anyway...(money)... especially to them.
  • This is not right... | | 24 Oct 2013, 10:01 AM Agree 0
    The government is out of control.
  • Bill M | | 24 Oct 2013, 10:09 AM Agree 0
    Our Government really screwd BoA on this one and I am not a fan of BoA. After forcing BoA to take over Countrywide, then they hold BoA responsible for the fraud that Angelo's Countrywide goons created along with FNMA's & FHLMC's collusion and loose practices at the time.
  • Suzie | | 24 Oct 2013, 10:43 AM Agree 0
    it's amazing, I worked for for 16 yrs and did have anyone except underwriters approve mortgages. We didn't do fraud, and didnt hire ex Lowe's cashiers as underwriters. We did a good job and unfortunatley we are all put in same catagory as the scum that worked everywhere in this business. Yes, the governement pressured BofA to purhcase CHL, but BofA had their own crappy book of business. can you say "ACORN"?
  • Ron T | | 24 Oct 2013, 10:48 AM Agree 0
    The same gov't shake down is occurring at JP Morgan. Gov't comes begging for help and then ends up suing for wrong doings of others. Of course, one has to be concerned about the negotiators representing the banks. Looks like a lot of un-crossed Ts and un-dotted i s were missed; probably whole paragraphs about indemnification.
  • Kathy A | | 24 Oct 2013, 10:57 AM Agree 0
    When B of A aquired Countrywide it wasn't so much of a shotgun wedding as a lets hurry and fix the mistake we made in 2008 by investing $2 billion in Countrywide on the belief that the company is undervalued. Present day B of A is paying for a huge mistake that that thier former CEO Ken Lewis made. Also as an Originator I was still referring client's that I could not qualify to Countrywide after the B of A merger and they were able to do the mortgages.
  • gheinecke | | 24 Oct 2013, 11:07 AM Agree 0
    Not true in it's entirety-The CEO of Bank Of America had an appetite for Countywide for years. Did anyone forget that Countrywide was a wholesale conduit for many GOOD brokers. The pricing was unbelievably strong and bankers couldn't beat brokers. Bankers wanted a bigger piece of the pie, made their own rules and BOA Chairman who retired a multi millionaire left very quickly after the acquisition. How about those preferred streamline mortgages for Senate and Congress such as Christopher Dodd known as "friends of Angelo". If you want to go after anyone finish cleaning up Congress. Billionaires overnight and grave conflicts of interest followed by insider trading deals. How about the latest whereby Senator Dianne Feinstein's husband gets a multi billion dollar contract for liquidating the US Post Offices as a commercial broker. No conflict there. SURE. plenty of accountability everywhere. Don't forget we gave Billions of dollars to the banks with no cost attached and BOA bought the BANK OF CHINA with the bailout money. Getting the picture. Jail would be great but it has to apply to Washington "untouchables".
  • Nick S | | 24 Oct 2013, 11:10 AM Agree 0
    B of A is the scapegoat for Fannie and Freddie. The GSEs lowered the bar enabling Countrywide to "Hustle." I watched it for many years being in the industry for many years.
  • Wm Matz | | 24 Oct 2013, 11:29 AM Agree 0
    I've also heard all the rumors about gov't pressure to buy CW. Does anyone have any hard evidence? Anything more than rumor or hearsay?

    If there was pressure, why would B of A not be raising that defense? However, I have also been told that B of A's motive was that it wanted the CW servicing platform. So Door #1 or Door #2 [or both]? Either way does anyone actually KNOW what happened, as opposed to recycling rumors?

    Remember, when you buy a company [CW], you buy its liabilities. When you buy assets [as in WaMu] you do not buy company liabilities. If Chase's settlement relates to problems with WaMu assets existing at the time of Chase's purchase, Chase is indemnified by FDIC. But if the settlement is for later actions, the indemnity would likely not apply.

    Would love to hear from someone who actually knows the B of A and Chase stories.
  • Russell V | | 24 Oct 2013, 11:42 AM Agree 0
    Can anyone explain how the GSE's buy "seasoned mortgages"? Is it any mortgage that payments are made on time for 12 months? Is it the responsibility of the GSE's to look at each mortgage they purchase?
  • sbanicki | | 24 Oct 2013, 01:45 PM Agree 0
    uring the period leading up to the collapse of the economy that reached a crescendo in the fall of 2008, we got trapped into thinking bad credit decisions could be overcome with good collateral. Those of us tied to the mortgage industry saw the poor mortgage underwriting that added , or maybe even created, the housing bubble.

    The mortgage broker did not look beyond his own wallet. The mortgage he originated smelled but if the mortgage servicer that he sold the mortgage to was willing to pay a good price, what did he care.

    The mortgage servicer had to wear a gas mask to protect himself from the stench of the mortgage he just purchased, but if Goldman Sachs was willing to purchase it from him at a good price, what did he care. The mortgage servicer unloaded the risk and made a good profit....
  • Sheila S | | 24 Oct 2013, 01:55 PM Agree 0
    The above is true. I am a broker and sincerely dislike being placed in the "bucket" of "did not care" LO's. I cared. I advised many clients NOT TO buy that investment property out of state or purchase the new home with the 1% neg am mortgage. Quite a few went with the YES man to get the mortgage. Fortunately for me, I guess? many of those clients trust me far more now and appreciate the advice I tried to give them. It is incredibly frustrating to watch the "powers that be" not only ALLOW the foul smelling product but encourage it. The meltdown was not a coincidence. More of a conspiracy really. Not that I am a conspiracy theorist.... but if it looks like a duck, sounds like a duck... and walks like a duck... what is it? These people knew (congress, wall street higher ups, bank CEOs, etc) exactly what it was they were doing with no remorse or retribution. Who gets blamed? The little guys and the guys farther down the line with less liability. BIZARRE state of the system really. Especially weird that most are naïve thanks to media. I miss those naive days. A LOT.
  • gheinecke | | 24 Oct 2013, 02:01 PM Agree 0
    Lock , stock and Barrel, they bought this for pennies on a dollar. They used the Feds as leverage, and needed somebody to blame. Hence the brokers. Has anyone had a client walk into your office saying the banker had no control, or idea what they were doing. True so because they don't have to take tests and they don't undergo the scrutiny the brokers have. Mortgage brokers did not have the politicians in their pockets. he banks played "split the competitors up". Why was it that Goldman Sachs did not take the fall or accountability. Their political cronies allowed them to take apart Bear Stearns( a formidable competitor), Chase got WAMU, boa GOT WHAT THEY DESERVED AND TRIED TO EAT THE PIE AND THE CRUST AT THE SAME TIME. When they realized that Merrill was a little too much to bite they tried to back out. The FEDS rammed this one down their throat. Lastly Wells took Wachovia, the Canadians pummeled American General which is now Springleaf, Td Bank took what they could as well. In Canada the forth biggest bank is still bigger than our top three banks combined. Not saying it is good but some think the bigger , the better, the easier the Gov't can control./ BOA got what they deserved but I would still like to see JAIL TIME as their just reward.
  • SergioR | | 24 Oct 2013, 03:41 PM Agree 0
    Everyone's comments make sense. The biggest joke of all is that even if BofA pays millions in damages or in fines, it still doesn't help those homeowners who are still trying to get modifications or litigants who are suing the lenders for wrongdoings, whether for predatory lending or issues with securitization to include the whole MER's issues, etc, etc. These cases are a joke and so is our government and their response to this whole mortgage meltdown mess.
  • Azaleaappraisal | | 25 Oct 2013, 10:44 AM Agree 0
    Conseco, Countrywide, BOA, ..... follow the money. Interestingly, all used Landsafe to process appraisals.
  • Randyz | | 25 Oct 2013, 10:45 AM Agree 0
    WAIT A MINUTE!!! BofA has made far more on FDIC as well as all their costs being covered by the government. I keep seeing the comment CW was shoved down their throat when the money that flows thru the back door because of it is a windfall from the government buddies.
  • r. stogner | | 31 Oct 2013, 11:46 AM Agree 0
    A former pastor in Pa. gets convicted of fraud to the tune of 6.4 million and gets 14 years in prison. BofA gets convicted of fraud to the tune of $848 million and gets a fine. What????
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