houston news, houston local news, breaking news in houston, houston weather at newscast media

[HOME ]   [ABOUT]   [PHOTOS]    [VIDEO]   [BLOG]   [HOUSTON]   [TEXAS]   [U.S. NEWS]  [WORLD NEWS]   [SPORTS]  [POP CULTURE  [CONTACT]

   

 

                            

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Bank of America to pay $11.6 billion settlement to Fannie Mae

bank of america

 

by Joseph Earnest  January 7, 2013

 

Newscast Media CHARLOTTE, N.CBank of America Corp has announced a settlement deal with Fannie Mae of $11.6 billion for bad mortgages of nearly a decade's worth of home loans, as a result of Bank of America's acquisition of Countrywide Financial Corp. five years ago.    

The agreement is also separate from an $8.5 billion foreclosure-abuse settlement between regulators and 10 banks, including Bank of America, additionally announced Monday. That pact is in addition to another settlement reached last February, where five large banks, including Bank of America, agreed to a $25 billion settlement with the Obama administration and 49 state attorneys general.

Under the deal announced Monday, the bank will pay $3.6 billion to Fannie Mae and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide banking unit sold to the government agency from Jan. 1, 2000 through Dec. 31, 2008, according to the Washington Post. (pop-up)

In layman's terms here's what happened:

(i) Mortgages that were generated over the last decade were bundled together into Mortgage-Backed Securities, and placed into pools.

(ii) Each pool is then sold into a trust called a Real Estate Mortgage Investment Conduit Trust (REMIC) and a Trustee is appointed to oversee the trust.

(iii) The trustee then hires a servicer whose duty is to collect money on behalf of the REMIC trust, and the servicer is paid a small fee for collecting these monies from homeowners.

(iv) Meanwhile, the Mortgage-Backed Securities are sold on the secondary market as derivatives, which are insured with Credit Default Swaps in case the trust goes under.

(v) The mortgage changes hands as it is bought and sold multiple times on the secondary market throughout the world, making it virtually impossible to identify who owns the loan, due to the use of MERS (Mortgage Electronic Registration Systems) on the deed of trust.  The lack of transparency of MERS prevents anyone from knowing the true and actual owner of the mortgage.

*It is the reason why when you send a "Qualified Written Request" to a servicer asking for the trust documents and the real owner of the loan, in 100 percent of the cases, the servicers cannot provide such information because the loan changed hands multiple times when bought and sold as a Mortgage Backed Security.  This practice has clouded the titles of securitized mortgages from 2003-2010.

What went wrong

(vi) The problem with Bank of America and other banks that were sued is that all these mortgages were fraudulent, because the Notes were not transferred into the REMIC trusts.  The trusts were empty!

(vii) To prevent the financial collapse, the banks declared the mortgages "toxic assets" and requested bailout money from the government under the Toxic Asset Relief Program (TARP), to halt a financial collapse. $16 trillion was extended.

According to an audit of the Federal Reserve by GAO (Government Accountability Office) below is some of the money the banks received:

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley:
$2.04 trillion ($2,040,000,000,000)
Merrill Lynch:
$1.949 trillion ($1,949,000,000,000)
Bank of America:
$1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom):
$868 billion ($868,000,000,000)
Bear Sterns:
$853 billion ($853,000,000,000)
Goldman Sachs:
$814 billion ($814,000,000,000)
Royal Bank of Scotland (UK):
$541 billion ($541,000,000,000)
JP Morgan Chase:
$391 billion ($391,000,000,000)
Deutsche Bank (Germany):
$354 billion ($354,000,000,000)
UBS (Switzerland):
$287 billion ($287,000,000,000)
Credit Suisse (Switzerland):
$262 billion ($262,000,000,000)
Lehman Brothers:
$183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom):
$181 billion ($181,000,000,000)
BNP Paribas (France):
$175 billion ($175,000,000,000)

Click here to read or download the GAO audit of the $16 trillion. (pop-up)

(viii) The banks receive trillions of dollars, and instead of correcting the defects, they sit on the money, and use some of it to buy up smaller failing banks.

(ix) Investors find out that the Mortgage-Backed Securities weren't in fact mortgage-backedthey were useless pieces of paper. Lawsuits are filed. Banks settle.

(x) Government teams up with homeowners and whistleblowers reaching a multi-billion dollar settlement with the banks for foreclosure abuse.

The latest settlement between Bank of America and Fannie Mae falls within the sequence of events just described above.      Add Comments>>

 Related stories:

SEC sues Texas bank for engaging in fraudulent mortgage scheme

BofA, Wells Fargo, Citi, Chase, GMAC and MERS Sued by Attorney General

Bank of America targeted in new probe by New York Attorney General

MERS Deeds of Trust and the enforceability problem they face

Former Countrywide employee exposes mortgage fraud on grand scale

 

 

 

 

  

         Search

 

       Find newscast media on youtube for houston news and local breaking news        get newscast media news feeds for breaking news, houston local news and world news.          Get our facebook updates on world news, houston news and houston local news including sports         Twitter

 Join the Newscast Media social networks

for current events and multimedia content. 


 

 

 

 

 Copyright© Newscast Media. All Rights Reserved. Terms and Privacy Policy