Economy
Related: About this forumU.S. Banks Haunted by Mortgage Demons That Won't Go Away.
Lenders like Bank of America Corp and Wells Fargo & Co say they are facing mounting pressure to buy back bad mortgages they sold to investors, signaling that banks' home-loan headaches could continue for years.
Investors like Fannie Mae and Freddie Mac have been pressing banks to buy back bad mortgages for years, but in recent months those requests have intensified, the banks have said in recent second-quarter earnings reports.
These comments from banks provide a fresh reminder of the loose ends that remain from the housing bust that started five years ago. The threat of new expenses and litigation is dampening bank share prices, and the problem could linger for some time, analysts and experts said.
http://www.nytimes.com/reuters/2012/07/19/business/19reuters-mortgages-repurchase.html?hp
xchrom
(108,903 posts)jtuck004
(15,882 posts)perhaps that could help them with this so difficult of tasks.
Around $38 billion total going out, iirc. Loose ends, indeed.
mother earth
(6,002 posts)blows, the icing on the cake is all thanks to the deep pockets of working class America.
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http://legal-dictionary.thefreedictionary.com/Ponzi+Scheme
"A Ponzi scheme is a type of investment Fraud that promises investors exorbitant interest if they loan their money. As more investors participate, the money contributed by later investors is paid to the initial investors, purportedly as the promised interest on their loans. A Ponzi scheme works in its initial stages but inevitably collapses as more investors participate.
A Ponzi scheme is a variation of illegal pyramid sales schemes. In a pyramid sales plan, a person pays a fee to become a distributor. Once the person becomes a distributor, he receives commissions not only for the products he sells but also for products sold by individuals that he brings into the business. These new distributors are beneath the person who brought them into the pyramid scheme, so they are "under the pyramid." In illegal pyramid schemes, only the people at the top of the pyramid make substantial money because they get a commission from the products sold by everyone below them. As more people become distributors, the persons lower in the pyramid have less chance to make money.
A Ponzi scheme was once was called a "bubble," but it was renamed in 1920 after Charles Ponzi and his Boston-based company had collected almost $10 million from ten thousand investors by selling promissory notes that claimed to pay 50 percent profit in forty-five days. When the scheme was exposed, a Boston bank collapsed, and investors lost most of their money."
Po_d Mainiac
(4,183 posts)Failed to mention that a shitload of the securitized bonds never received the "wet ink" paperwork within the alloted timeframe allowed by law.
When the put-backs are finished business, the Goldman squid may be a wholely owned particle in the AIG empire