Occupy Wall Street & Corruption #BlackMonday Ex-Bank of America Employee Can Prove Mortgage Fraud Part1. You must read this link: bankofamericasuck/…/ex-bank-of-ameica-employee-c… You must read this second link too!: Bofa wltx/…/bofa-penalty-historic-resol…/14383033/ bankofamericasuck/ by Occupy Wall Street & Corruption KLEPTOCRACY: Rule by Thieves! BofA Penalty: Historic Resolution of Mortgage Wrongdoing! HELP FOR HOMEOWNERS: Settlement requires aid to distressed borrowers INVESTORS: Bank of America stock still not a steal TAX DEDUCTIBLE: Some settlement expenses are deductible Bank of America Thursday agreed to pay $16.65 billion to resolve allegations it sold toxic mortgage-backed securities and other financial products in the lead-up to the financial crisis — the largest civil settlement ever between a single firm and the U.S. government. Announced by federal and state officials in Washington, the deal requires the nations second-largest bank to pay $9.65 billion in cash, and also provide $7 billion for consumer relief, such as reducing mortgage payments for struggling homeowners and funding neighborhood stabilization efforts. The cash payment includes a $5.02 billion civil and $4.63 billion in compensatory remediation payments. Federal officials said the nations second-largest bank will pay a record $5 billion penalty under the Financial Institutions Reform Recovery and Enforcement Act as part of the deal. Additionally, the Securities and Exchange Commission said Bank of America agreed to admit wrongdoing and pay $245 million to resolve securities fraud charges filed last year related to residential mortgage backed securities. Much of the activity covered by the settlement occurred in Countrywide Financial, the mortgage company the bank bought in 2008, and Merrill Lynch, the brokerage the bank also acquired during the financial crisis. This historic resolution — the largest such settlement on record — goes far beyond the cost of doing business, said Attorney General Eric Holder, explaining that the deal resolves more than a dozen cases and investigations by the Department of Justice, attorneys general in six states and several federal financial agencies. Bank of America has acknowledged that, in the years leading up to the financial crisis that devastated our economy in 2008, it, Merrill Lynch, and Countrywide sold billions of dollars of RMBS (residential mortgage-backed securities) backed by toxic loans whose quality, and level of risk, they knowingly misrepresented to investors and the U.S. government, added Holder. These loans contained material underwriting defects; they were secured by properties with inflated appraisals; they failed to comply with federal, state, and local laws; and they were insufficiently collateralized. Yet these financial institutions knowingly, routinely, falsely, and fraudulently marked and sold these loans as sound and reliable investments. Shares of Bank of America (BAC) were up more than 1% at $15.69 shortly after financial markets opened Thursday. The Charlotte, N.C.-headquartered bank said the settlement is expected to reduce its third-quarter pre-tax earnings by $5.3 billion and negatively affect earnings per share by approximately 43 cents per share after taxes. We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future, bank CEO Brian Moynihan said as federal and state officials outlined the settlement at a Washington news conference. The deal was hammered out during months of negotiations between lawyers for Bank of America and Department of Justice prosecutors — as well as direct talks between Holder and Moynihan. The settlement marks the latest in a series of Department of Justice legal actions focused on financial institutions whose marketing and sale of risky mortgage-backed securities contributed to a real estate market collapse amid the 2008 financial crisis. The largest previous settlement involved JPMorgan Chase (JPM), which in Novemberagreed to pay $13 billion and admit it sold billions in toxic mortgage investments. Similarly, Citigroup (C) in July agreed to a $7 billion settlement over similar Department of Justice allegations. For Bank of America, the record-breaking settlement significantly boosts the more than $60 billion that the Charlotte, N.C.-headquartered bank has already spent to resolve legal issues stemming from the financial crisis. No other U.S. bank has spent more. Despite the size of the new settlement, some consumer groups have criticized the lack of detailed data on investor losses linked to the mortgage-selling scheme, as well as an absence of charges against specific bank officials. Dennis Kelleher, president and CEO of Better Markets, a financial watchdog, earlier this month called on Department of Justice officials to provide that information. Additionally, the U.S. Public Interest Research Group, a national consumer group,noted Monday that large portions of bank settlements with the government have been tax-deductible. To understand how significant the BofA settlement really is, people need to ask how many billions the bank is allowed to write off as tax deductions, and how much of the announced figure includes fake costs — costs the bank would have incurred anyway to protect its bottom line, said Phineas Baxandall, the consumer groups senior analyst. wltx/…/bofa-penalty-historic-resol…/14383033/
Posted on: Fri, 02 Jan 2015 11:51:46 +0000
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