'Massive fraud' at center of trial against BofA over U.S. mortgages

[xchrom]

http://www.reuters.com/article/2013/09/24/us-bankofamerica-hustle-idUSBRE98M11H20130924

(Reuters) - Bank of America Corp's Countrywide unit placed profits over quality in a "massive fraud" selling shoddy mortgages to Fannie Mae and Freddie Mac, a U.S. government lawyer said on Tuesday.

The claim came at the start of the first case by the government to go to trial against a major bank over defective mortgage practices leading up to the 2008 financial crisis.

Pierre Armand, a lawyer in the civil division of the U.S. Attorney's Office in Manhattan, said Countrywide made $165 million selling loans that it promised were investment quality to Fannie and Freddie.

"What documents and witnesses will show is that the promise of quality was largely a joke," Armand said.

[AllyCat]

1. I know BofA if probably just biding their time with this trial knowing they will, as always,

avoid conviction. But I do like to see this stuff come out so consumers can know they are terrible.

[hfojvt]

3. except it was NOT Bank of America

it was Countrywide.

Bank of America purchased Countrywide as part of TARP.

http://online.wsj.com/article/SB10001424052702303561504577495332947870736.html

"Countrywide saddled Bank of America with hundreds of thousands of delinquent borrowers, thrust it into the middle of a foreclosure-paperwork scandal and exposed the bank to countless lawsuits from mortgage-bond investors and insurers. The number of people handling poor-performing real-estate loans for Bank of America ballooned from 5,000 at the time of the Countrywide purchase to 50,000. Those people occupy at least 4.5 million square feet of office space around the country, the equivalent of 78 football fields. "

[AllyCat]

4. I still can't believe they will suffer much from this, no matter who started the mess.

B of A is not a good guy. They won't see much more than a few fines. Certainly no jail time. They'll still make a mint.

[hfojvt]

5. why should they?

Since they are not the ones who did it? They bought Countrywide in 2008 for $2.5 billion, and THAT boneheaded move has already cost them $40 billion.

The person or persons responsible for this fraud, which happened BEFORE 2008, walked away with $2.5 billion - a nice tidy little sum. Not $40 billion in losses and more trouble. Since they are the ones responsible, perhaps somebody should go after their $2.5 billion, or does selling a worthless company mean never having to say you are sorry?

Bank of America, for all their being one of those evil TBTF entities, has already paid quite a bit for the purchase of Countrywide. AND, I would point out, their purchase of Countrywide helped to stop the economic meltdown that was happening at the time. True, they thought they were getting a bargain - maybe a $5 billion company for a mere $2.5 billion, but they also knew there was some risk.

That's what I get from the article I linked. Of course, that article is from the Wall Street Journal, that bastion of populist working class journalism. So maybe somebody should pass the salt.

[AllyCat]

6. Then I defer to "what goes around, comes around".

BofA may be pure as the driven snow on this one, but they have done enough other things to hurt our economy and their clients that one has to wonder if they have made their own bed.

[TBF]

2. Of all the horrible companies out there -

this is the one I would most like to see fail.

Totally taking advantage of folks who could least afford it - worst of the big banks imo.