It's a jungle out there. And we brought it all here.
Filed under: JP Morgan Chase, Bank of America, Citigroup, Banks, Wells Fargo, Financial ServicesLloyd C. Blankfein, chairman and CEO of Goldman Sachs, speaks during a Bloomberg Television interview. (David Paul Morris/Bloomberg)
Wall Street banks once …
Filed under: Bank of America, Small Business, Banks, Manufacturing, EntrepreneursIn the wake of December’s Sandy Hook school shootings, the debate over America’s firearms policy has come to a full boil, marked by increasingly heated arguments from lobb…
About five years after the housing market crumbled, Bank of America Corp. (NYSE: BAC) has taken a major step toward resolving federal allegations it had improperly handled mortgages.
The Charlotte, N.C.-based bank announced today (Monday) it had reached a $10.4 billion settlement with federal mortgage issuer Fannie Mae, resolving all of Bank of America’s disputes with Fannie.
BofA, which had been one of 14 banks negotiating with federal prosecutors over foreclosure abuses, settled its battle with housing finance giant Freddie Mac in 2011.
Under the latest settlement, Bank of America will pay $3.65 billion to settle claims related to the sale and delivery of certain residential mortgage loans. Plus, the bank will repurchase at a discounted price $6.75 billion worth of residential mortgage loans it sold to Fannie Mae.
BofA also said it has agreed to sell the servicing rights on some 2 million expensive residential loans, worth about $306 billion, that are chipping away at the value of the banking giant’s stressed portfolio.
In a statement, Bank of America CEO Brian Moynihan said, “Together, these agreements are a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time.”
Now here’s another good idea from the geniuses that ruin, I mean run, our country.
The Obamarama administration really wants to help homeowners whose homes aren’t worth what they borrowed to buy them. In other words, they are “underwater.”
A lot of the loans to homeowners that are underwater are owned outright or, at a minimum, insured (more often both) by Fannie Mae and Freddie Mac, the government-sponsored (which means taxpayer saddled) enterprises that the government had to take over when in 2008 they lost on their trillion-dollar bets that home prices would go up forever. Geniuses!
In fact, these geniuses own or insure close to half of all home loans in the United States. Obviously, they like to bet big. But they didn’t bet alone. They had betting partners.
The casino was the whole country and the whole system.
The mortgage originators, prime and subprime lenders, banks – everyone was handing out loans because, get this, they wouldn’t be responsible for the loans they were making. Fannie and Freddie were buying them all up while the guilty parties would make money as Fannie and Freddie pipelined more products to – guess what – make more loans!
In case you forgot, that’s where all the money came from in the whirling dervish derby that fed the mortgage bubble and aided and abetted Alan Greenspan’s how-low-can-you-go interest rate policies. I guess we can call him the Big Pit Boss. But I digress…
So, if Fannie and Freddie own your loan and you’re underwater, they have been cattle-prodded by the geniuses above them (yep, government geniuses) to let you refinance at a lower rate (lower than the crushing, sucker’s rate that ballooned on you).
Because, as an investor (that’s what home buying really is – an investment, not a right) you made a go-for-broke bet at the table and forgot your basic math. Math that says, “One, plus the none that I have, equals three, so this is a good bet I can double down on and retire.”
What will these geniuses think of next?
Filed under: Retirement, Bank of America, Wells Fargo & Co, Personal Finance, Power of PlanningBy Stephanie Taylor Christensen
Though same-sex couples are currently afforded the right to be legally wed or enter into civil unions in 13 U.S. states,…
