Previously: Bank of America: how the scam works
Slim the Slimeball sells you a used car with a transmission that has about five minutes left on it. When you’re a mile and a half down the street, you hear a thunk and the car quits on you. Slim is all innocence when you confront him, but, having flirted with his secretary, you manage to obtain documentation from her that Slim knew how bad the car was. You threaten a lawsuit and Slim offers to reimburse you for the $3,000 you spent. Thirty bucks. That’s right. One dollar for every hundred you gave him.
Slim needs to apply to Bank of America for an executive position. He obviously knows how the financial game is played. BofA, for example, just transacted a deal with Fannie Mae and Freddie Mac to pay them approximately one cent on every dollar that the bank’s mortgage sales to Fannie and Freddie are likely to cost those government entities over the next few years. The backstory on this is that the big banks, including Bad for America, put together packages of loans and sold them to private investors (who often insured them in case the loans went bad) as well as to Fannie and Freddie. Many of those were risky loans that eventually turned toxic. F and F, who don’t actually lend money but who were set up to buy loans from private lenders, were forced to buy more of these risky packages:
Brian Moynihan, BofA CEO
In an effort to promote affordable home ownership for minorities and rural whites, the Department of Housing and Urban Development set targets for Fannie and Freddie in 1992 to purchase low-income loans for sale….
And now, Bad for America is facing lawsuits that would force it to repurchase these bad loans (repurchases are called put-backs) that it sold to F and F as well as to private investors–think: give you back your $3,000 bucks for the crappy car. Instead of repurchasing loans it never should have had the gall to sell, Bad for America has offered Fannie and Freddie this “deal”. It is going to pay F and F a. whole. penny for every dollar these bad loans cost F and F. Wow.
And, right about now, if Bank of America was a person, they’d be propped up on a pillow, naked in bed, smoking a cigarette, sipping a glass of wine, smiling as they looked into your eyes while tritely asking: “Was it as good for you as it was for me?”
The diarist quotes Chris Whalen of Institutional Risk Analytics about who is responsible for this smelly deal:
“This looks to me like a gift from Tim Geithner… there’s politics all over this.”
And since this is a signal to the other big banks to put their liabilities behind them, the stock market rocketed on Monday.
So, whew, say the bankers. Another big bailout. And this one we won’t even have to pay back. The taxpayers will just eat it. That will allow us to stay in business, profiting off of pretending to modify mortgages. I saw the profiting-off-of-loan-modifications part of their business in action with the latest news on the Mike and Mary Boehm front.
Last week they were waiting for a Dec. 24th 11:00 phone call from Elizabeth Gomez at Bad that never came. Gomez had told them she would check on the (supposed) fact that nothing in their file indicated they were about to be foreclosed on. Mary e-mailed me on Wednesday:
I got a 45 minute phone call from a Ronald at BOA calling because Elizabeth Gomez has had a mysterious illness or emergency since we last talked to her on Dec. 23 and that is why she hasn’t called. Yeah, right.
The entire 45 minute conversation was basically an info-mercial for how great BOA is and how they are trying to help people, but MHA is a government program. It’s just like FHA when it was first introduced and everyone wanted it. So many people signed up and then there was a backlog. People are getting mad at the banks, but really it’s the government’s fault. And Obama told the banks to stop HAMP and convert to MHA and blah blah blah…….. Those poor little banks, they just want to do the right thing.
Ronald said he could NOT put anything he was telling me in writing because BOA’s lawyers have to look at every piece of paper and email that leaves the building, and so he is very limited in what he could send me. He gave me his phone number and email address, but said his email was just for us to send HIM things, he couldn’t send us anything. He would not give me a dollar amount to come current, could not do anything about late fees, etc. and said he could not tell me what to do, but since we are already HALFWAY (please don’t laugh) through the MHA program (after 14 months?), it would probably be a good idea to complete the process and see what happens. He kept mentioning how we might be able to get as low as a 2% interest rate. Ronald kept telling me he was just there to answer my questions, but he never answered a single one!
This was just a call to placate us for now. NOT WORKING!!!!!
If that Troy woman who has brought suit against Bad for this sort of conscienceless, greedy, hypocritical, lying, unethical, illegal behavior–if she, as I said, manages to get it filed as a class action suit, something tells me the Boehms would be interested in joining her.
Unless, of course, Chris Koster wants to put the weight of the state behind dealing with complaints like these. He could save the homes of people who have no money to spare for legal fees, who don’t deserve the runaround they’re getting. Real Democrats like to do that sort of thing.
(Another h/t to Adam Shriver, this time for the link to the Kos diary that got me investigating the F and F deal)