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View Full Version : DOOM--Countrywide/Bank of America Have 60 Days Left




teacherone
10-19-2010, 01:12 PM
Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said.

The bondholders wrote a letter to Bank of America and Bank of New York Mellon Corp., the debt’s trustee, citing alleged failures by Countrywide to service the loans properly, their lawyer said yesterday in a statement that didn’t name the firms.

Investors are stepping up efforts to recoup losses on mortgage bonds, which plummeted in value amid the worst slump in home prices since the 1930s. Last month, BNY Mellon declined to investigate mortgage files in response to a demand from the bondholder group, which has since expanded. Countrywide’s servicing failures, including insufficient record keeping, may open the door for investors to seek repurchases by bypassing the trustee, said Kathy Patrick, their lawyer at Gibbs & Bruns LLP.

“We now are in a position where we have to start a clock ticking,” Patrick, who is based in Houston, said today in a telephone interview.

MetLife Inc., the biggest U.S. life insurer, is part of the group represented by Gibbs & Bruns, said the people, who declined to be identified because the discussions aren’t public. TCW Group Inc., the manager of $110 billion in assets, expects to join BlackRock, the world’s largest money manager, and Pimco, which runs the biggest bond fund, in the group, the people said.

Countrywide also hasn’t met its contractual obligations as a servicer because it hasn’t asked for repurchases itself and is taking too long with foreclosures, either because of document or process mistakes or because it doesn’t have enough staff to evaluate borrowers for loan modifications, Patrick said. If the issues aren’t fixed within 60 days, BNY Mellon should declare Countrywide in default of its contracts, she said.

http://www.zerohedge.com/article/pimco-and-new-york-fed-said-seek-bank-america-repurchase-mortgages#comments

tspark
10-19-2010, 03:41 PM
Would it be wrong to wish for this institute to crash and burn?

I and people i know had accounts with BoA and they started changing the checks posting/debit card deductions almost all the time and it cost us thousands of dollars...

teacherone
10-20-2010, 01:45 AM
Would it be wrong to wish for this institute to crash and burn?

I and people i know had accounts with BoA and they started changing the checks posting/debit card deductions almost all the time and it cost us thousands of dollars...

no. not wrong.

we should let them all crash and burn.

just protect yourself; it's going to be a bumpy ride.

Live_Free_Or_Die
10-20-2010, 02:12 AM
This is likely only about the dismal foreclosure rate of loan service providers who can't produce notes.

teacherone
10-20-2010, 02:16 AM
countrywide and extension BOA will have to repurchase almsot 50 BILLION worth of mortgages they sold on to PIMCO, BlackRock and the NY fed if they can't sort out the service notes within 60 days.

There is no way they can do it.. no one knows who owns what anymore.

Eroberer
10-20-2010, 02:32 AM
SKF anyone?

Pistis
10-20-2010, 03:44 AM
You would think a second bailout of BoA is completely out of the question, which would mean a default is highly likely. Here's why:

ZeroHedge (http://www.zerohedge.com/article/can-you-spell-u-n-d-e-r-r-e-s-e-r-v-e-d-if-not-here-visualization)--
Following today's news of an imminent lawsuit to be filed against Bank of America by such entities as the New York Fed (which, by the way, it had to do, and not voluntarily, but merely as a function of its fiduciary duty to taxpayers through its Maiden Lane holdings, managed, conveniently enough, by Bank of America minority holding BlackRock) everyone promptly has taken a quick look back at the bank's earnings presentation, and especially one little piece of data: the putback reserve. Taking a quick look a page 23 on the pdf (http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjY0MDd8Q2hpbGRJRD0 tMXxUeXBlPTM=&t=1) we read: "3Q10 reps and warranties provision of $872M is $376M lower than 2Q10, as the current quarter included an increase in expected repurchases from GSEs while 2Q10 included additional provision for monolines."

So BoA has $872 million set aside for mortgage repurchases while Pimco, Fed-NY et al are demanding $47 billion. And this is just the start because you can bet all the banks are up to their necks in the fraudclosure disaster.

teacherone
10-20-2010, 04:33 AM
CNBC has more


A law firm on Tuesday sent a notice alleging failures by Countrywide Financial to properly service loans that were part of certain mortgage-backed securities. Countrywide was acquired by Bank of America in 2008.

"We want to enforce the holders' contract rights," Kathy Patrick, the lead attorney representing the bond holders, told CNBC. "Today's action begins the clock ticking ... If these issues of non-performance are not addressed and cured, then our clients will be able to enforce their rights in court."

"There were representations made to my bond holders when they purchased these securities. They are contractual representations about the credit quality of these mortgages...and my clients are concerned," Patrick added, "that the mortgages in question did not, at the time they were securitized, conform to those representations."

Bank of America issued a response late Tuesday saying, "We're not responsible for the poor performance of loans as a result of a bad economy. We don't believe we've breached our obligations as servicer. We will examine every avenue to vigorously defend ourselves."

Patrick, an attorney with the Houston-based law firm of Gibbs Brun, also told CNBC her clients may consider asking other banks to repurchase bad mortgages.

"The group of holders (she represents) hold securities other than just the Countrywide mortgages and will invoke their rights across the board where is makes sense for them to do it," she said.
http://www.cnbc.com/id/39745128