Nevada Says Bank (of America) Broke Mortgage Settlement

[kpete]

Source: New York Times

Nevada Says Bank Broke Mortgage Settlement
By GRETCHEN MORGENSON
Published: August 30, 2011

The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can proceed with a suit against the bank over allegations of deceptive lending, marketing and loan servicing practices.

In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.

The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.

Read more: http://www.nytimes.com/2011/08/31/business/bank-of-america-accused-of-breaching-mortgage-accord.html?_r=1&hp

[Hawkowl]

1. Nationalize BofA

Nationalize the deposits and auction off the loans. Fire the executives and claw back their bonuses, yachts, and mansions. Imprison them for fraud and theft. Enough of this bullshit.

[Harmony Blue]

2. BoA is going down even with Buffett's intervention

It is not a matter if, but when.

[Hawkowl]

3. I agree completely nt

[naaman fletcher]

5. I disagree

Buffet spoke with Obama the day before the B of A deal was announced. There is little doubt in my mind that Obama promised a bailout in the event Buffet's investment went sour.

[happyslug]

10. Buffert has PERFERRED Stock, Bank of America can go under and Buffet can still make money

Remember what Buffet did was buy PREFERRED stock, stock that must be paid BEFORE anything goes to the Common Stock Holders. Buffet will be paid after OTHER creditors (Including workers wages) but before ANYTHING goes to common stock holders. In many ways, the Common Stock Holders can be left holding the bag.

I suspect Buffet received other consideration, for example Buffet could have demanded and received the right for his stock to be paid BEFORE any stock options of top executives could be honored Buffet could have received a lien on real estate holdings of Bank of America over and above any other claim (And in that case, even the claim of Wages).

Preferred stock is a means to give someone more rights, and in most cases first claim to assets of a Corporation, than anyone else except secure claims and wages, and then as to secure claims only to the extent of the value of the item the loan is secured by.

Buffet is still gambling, but it is a safer bet then if he took common stock for his money.

[naaman fletcher]

4. yep! nt

[bemildred]

6. Liars and frauds. nt

[LiberalFighter]

7. Buffet should demand his investment back and get the hell out of BoA.

[Endangered Specie]

9. why would he... buy low sell high

BofA, if it doesn't collapse, can't go much lower.

[sarcasmo]

8. Screwing the troubled borrowers, stay classy Bank of America.