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Posts Tagged ‘BofA’

Mortgage Investors To Bank Of America: We’re Pissed And We Want Our 47 Billion Dollars Back

Mortgage Investors To Bank Of America: We’re Pissed And We Want Our 47 Billion Dollars Back

Courtesy of Michael Snyder at The American Dream

Everyone knew that the foreclosure fraud crisis was going to spawn a festival of lawsuits, and now it looks like it is already beginning.  The New York Federal Reserve Bank is part of a consortium of eight large institutional investment firms that has launched an effort to force Bank of America to repurchase $47 billion worth of mortgages packaged into bonds by its Countrywide Financial unit.  It turns out that most mortgage bond contracts explicitly require the repurchase of loans when the quality of the loans falls short of promises made by the sellers.  As most of us know by now, many of these mortgages that were packaged together into "AAA rated" securities were actually a bunch of junk.  But this is just the beginning.  There are going to be hordes of lawsuits stemming from this crisis and it is going to take years and years for this thing to work through the legal system. 

All of the big players in the U.S. mortgage industry are going to be paralyzed for an extended period of time by this crisis, and that means that buying a home and achieving the American Dream is going to become a lot harder for millions of Americans.  Not only that, if mortgage lending institutions end up being forced to take back gigantic mountains of bad mortgages it could end up sinking a whole lot of them.  The implications for the U.S. financial system would be staggering. 

And it turns out that the effort by the consortium of eight large institutional investment firms to get Bank of America to take back $47 billion in mortgages is not the only action already being taken.  An even larger mortgage repurchase initiative involving investors holding a total of more than $500 billion in mortgage debt is being coordinated by Dallas lawyer Talcott Franklin.…
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PIMCO, Blackrock, NY Fed Seek to Force BofA to Repurchase $47 Billion in Soured Mortgages; Viral Nonsense on “Show Me the Note” and “ForeclosureGate”

Excellent article by Mish who separates fact and fiction in the Foreclosuregate drama. - Ilene 

PIMCO, Blackrock, NY Fed Seek to Force BofA to Repurchase $47 Billion in Soured Mortgages; Viral Nonsense on "Show Me the Note" and "ForeclosureGate"

foreclosureCourtesy of Mish

At long last, the real issue regarding soured mortgages has stepped up to the plate. The misguided focus on "ForclosureGate" is but a sideshow compared to Pimco, NY Fed Said to Seek BofA Mortgage Repurchases

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.

A group of 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 loans properly, their lawyer said yesterday in a statement that didn’t name the firms. The New York Fed acquired mortgage debt through its 2008 rescues of Bear Stearns Cos. and American International Group Inc.

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.

Patrick represents investors who own at least 25 percent of so-called voting rights in the deals and stand to recover “many billions of dollars,” Patrick said.

Countrywide hasn’t met its contractual obligations as a servicer also because it hasn’t asked for loan repurchases and is taking too long with foreclosures, Patrick said. The delays stem from missing documents, process mistakes and insufficient staffing to evaluate borrowers for loan modifications, she said.

If Countrywide doesn’t correct the servicing problems within a few months, her clients could have the right to pursue legal action against Bank of America, Bank of New York or both, she said. “None of the bondholders are opposed to modifications for deserving borrowers, but you’ve got to get it done” in a timely fashion, she added.

Mortgage-bond contracts are explicit in requiring repurchases of loans when their


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Pay Czar Reveals $1.6 Billion in “Ill Advised” Payouts But Does Nothing About Them

Pay Czar Reveals $1.6 Billion in "Ill Advised" Payouts But Does Nothing About Them

Courtesy of Jr. Deputy Accountant


 

So let me make sure I have this right because Lord knows I’ve been drinking more than usual lately. Feinberg spent months putting together this report only to discover 17 firms had paid out $1.8 billion in questionable bonuses but then comes out and says he’s not going to do anything about it.

What the f*ck are we paying this guy for then?

WSJ:

U.S. "pay czar" Kenneth Feinberg on Friday declined to request 17 financial firms that doled out $1.6 billion in "ill advised" executive compensation to return the excessive payouts, saying to do so would be unfair to the companies and could trigger private lawsuits and additional Congressional investigation.

Mr. Feinberg released a report that found 17 firms—including Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Citigroup Inc.—made the bonus-like payouts to top executives in late 2008 and early 2009 even as the companies were receiving taxpayer assistance.

Mr. Feinberg, the Obama administration’s special master for compensation, said he deemed these payments as "ill advised" both for the sheer amount—some individual payouts exceed $10 million, he said—and the lack of reasonable rationale for their payment.

Other firms Mr. Feinberg criticized for poor judgment included: American Express Co., American International Group Inc., Bank of America Corp., Boston Private Financial Holdings Inc., Capital One Financial Corp., CIT Group Inc., M&T Bank Corp., Regions Financial Corp., Sun Trust Banks Inc., Bank of New York Mellon Corp., Morgan Stanley, PNC Financial Services Group Inc., U.S. Bancorp and Wells Fargo & Co.

"Lack of reasonable rationale" hahahahaha. Maybe we should charge Obama with that for giving this guy a fake job patrolling payouts in the first place. 


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BofA, Wells Fargo, JPM, Citigroup FDIC Fees May Top $10 Billion

BofA, Wells Fargo, JPM, Citigroup FDIC Fees May Top $10 Billion

bank failureCourtesy of Mish

The FDIC is struggling mightily to stay solvent. Given that there are bank failures every Friday, it’s no easy feat for the FDIC to stay ahead of the game.

Please consider Bank of America, Major Banks’ FDIC Premiums May Top $10 Billion.

The Federal Deposit Insurance Corp.’s plan to rebuild its reserves may cost Bank of America Corp. and three of the largest U.S. banks more than $10 billion.

Bank of America, the biggest U.S. lender by deposits, may owe $3.5 billion under an FDIC proposal that banks prepay three years of premiums, based on the lowest assessment rate multiplied by the bank’s $900 billion in June 30 U.S. deposits.

“This seems like a very hefty amount,” said Tim Yeager, a finance professor at the University of Arkansas and former economist at the Federal Reserve Bank of St. Louis. “The FDIC’s projections of future losses are pretty severe, and they are trying everything they can to avoid tapping the Treasury.”

U.S. bank premiums range from 12 cents per $100 in deposits for the safest lenders to 45 cents for banks the U.S. considers risky, said Chris Cole, senior regulatory counsel for the Independent Community Bankers of America. The FDIC yesterday proposed asking banks to pay premiums for the fourth quarter and next three years on Dec. 30. The fees will raise $45 billion.

Based on the current assessment and each bank’s deposits, Wells Fargo & Co.’s fee may be $3.2 billion based on its $814 billion in deposits, JPMorgan Chase & Co. may pay $2.4 billion and Citigroup Inc. $1.2 billion. The estimates exclude the FDIC’s plan to boost the assessment rate by 3 cents per $100 in deposits in 2011 or the agency’s assumption that bank deposits will increase by 5 percent annually.

FDIC Is Bankrupt

Last month I wrote As of Friday August 14, 2009, FDIC is Bankrupt.

Although that is a realistically correct headline (Please see You Know The Banking System Is Unsound When…. for a justification), I did overlook things FDIC did to temporarily stay in the game.

Prepaid fees is yet another attempt to keep the game going. How much longer this can last is anyone’s guess. Those prepaid fees are going to hurt bank earnings 100%


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The Big Banks Have Gotten Bigger

This moving through space and time pie chart will warm your heart, if too-big-to-fail troubled you before…

The Big Banks Have Gotten Bigger

Courtesy of Washington’s Blog

In a post called "Break Up the Big Banks", Rolfe Winkler provides a nice graphic showing that the too big to fails have gotten bigger:

The big have gotten even bigger since the start of the financial crisis. At the end of 2007, the Big Four banks — Citigroup, JPMorgan Chase, Bank of America and Wells Fargo — held 32 percent of all deposits in FDIC-insured institutions. As of June 30th, it was 39 percent.

create animated gif

In total, they had $3.8 trillion worth of deposits as of June 30th. Compare that figure to the FDIC’s Deposit Insurance Fund, which showed a balance of just $10.4. billion on the same date.

 


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Judge Rejects Sweetheart Deal Between SEC and BofA; NY Attorney General Cuomo Sharpens Axe

Judge Rejects Sweetheart Deal Between SEC and BofA; NY Attorney General Cuomo Sharpens Axe

sweetheart dealCourtesy of Mish

The sweetheart deal between the SEC and Bank of America is surprisingly under attack today as a Federal Judge rejects deal between SEC, BofA over bonuses.

A federal judge on Monday rejected a $33 million settlement between the Securities and Exchange Commission and Bank of America Corp., saying the SEC’s accusations of inadequate disclosure by the bank over bonuses paid at Merrill Lynch must now go to trial.

The SEC announced last month that it had settled its civil charges against BofA, which agreed to buy the New York investment bank last year, without the bank admitting or denying guilt in the case. BofA has said it didn’t violate disclosure rules.

U.S. District Judge Jed Rakoff held up his approval of the settlement, however, and ordered the SEC last month to explain why it didn’t pursue charges against specific executives at Bank of America over the accusations.

After receiving additional statements from the SEC and BofA last week, Rakoff ruled Monday that the proposed $33 million settlement "cannot remotely be called fair," and ordered that the case go to trial beginning Feb. 1.

Rakoff, in his ruling, found that the proposed settlement "suggests a rather cynical relationship between the parties: the SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger, the bank’s management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth."

Cuomo Sharpens Axe

Related to the above decision, inquiring minds are reading Cuomo preparing charges against BofA.

The New York Attorney General’s office is preparing charges against several high-ranking Bank of America executives over the bank’s alleged failure to disclose details about its acquisition of Merrill Lynch, according to a person familiar with the investigation.

Attorney General Andrew Cuomo’s office is likely to file civil charges against the executives over their role in failing to alert shareholders to mounting losses as well as accelerated bonus payments at Merrill, said the person, who requested anonymity because no charges have been filed yet.

Bonus Issue Should Be A Sideshow

The issue of a civil lawsuit


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THE SHORT SQUEEZE RALLY IS BACK

THE SHORT SQUEEZE RALLY IS BACK

short squeeze rallyCourtesy of The Pragmatic Capitalist

One of the most evident characteristics of the recent 50% stock rally has been short squeezes.  Skepticism regarding the quality of the rally kept the shorts confident that stocks would retrench.  And day after day we got short squeezes in the banks that generated market rallies.  As summer rolled around the trend appeared to die and the financials went through a 3 month lull.  That has all changed in the last 4 weeks, however, as 5 (mostly meaningless) stocks dominate NYSE trading.  BofA, Citi, Fannie, Freddie and AIG have accounted for more than 30% of NYSE volume in the last month and are again generating overall stock market optimism today as all 5 stocks rally on no news or news that is totally irrelevant to the rest of the market. Will the shorts ever learn their lesson?

 THE SHORT SQUEEZE RALLY IS BACK

 


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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743"

Thank you for you time!

 
 

Zero Hedge

Futures Levitate As FOMC Begins Two-Day Meeting

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Overnight markets have been a continuation of the relative peace observed yesterday before the onslaught of key data later in the week, with the biggest mover standing out as the USDJPY, which briefly touched 102 before sliding lower then recouping losses. This sent the Nikkei 225 up 0.57% despite absolutely atrocious Japanese household spending data, coupled with a major deterioration in employment: at this rate if Abenomics doesn't fix the economy it just may destroy it. Aside from that the last 24 hours could be summed as having a lot of noise but not a lot of excitement. This was best illustrated by the S&P500’s (+0.03%) performance which was the second smallest gain YTD. And while the SHCOMP is starti...



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Phil's Favorites

Ukrainians Ordered to War, Women Burn the Military Writs

Courtesy of Mish.

The war in Ukraine is going so well that soldiers are unpaid and men are ordered to serve whether they want to or not.

Hats off to a group of women who confront a Ukrainian soldier and burn military writs right in front of the soldier's face.



Writ Burning Video



Video link: Ukrainians Burn Writs

Transcript

  • Woman to Ukrainian soldier: Who are you?
  • Soldier: I am the head of the local recruiting center.
  • Woman: Why are you bringing military writs?
  • Soldier: It's an order from above. I c...



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Insider Scoop

Report: IBM Rejects Offer For Chip Operations

Courtesy of Benzinga.

Related IBM Blackberry Attempts To Rebound From IBM/Apple Deal The 10 Most-Respected Corporate Brands Can the iRally Endure? (Fox Business)

International Business Machines (NYSE: IBM) rejected an offer for part of its semiconductor manufacturing operations, according to unnamed sources cited by ...



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Chart School

What happened the last time someone teased a bear?

Courtesy of Read the Ticker.

Time for a funny, can't be serious all the time!

Is it really smart to poke a Russian bear ?? Seriously!!




NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net Investing Quote...

.."One of the most helpful things that anybody can learn is to give up trying to catch the last eighth – or the first. These two are the most expensive eighths in the world. They have cost stock traders, taken together, enough millions of dollars to build a concrete highway across the continent."..

Jesse Livermore
..“It’s not what you own that will send you bust but what you owe.”..

Anon


...

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Option Review

Kellogg Call Options Active Ahead Of Earnings

Shares in packaged foods producer Kellogg Co. (Ticker: K) are in positive territory on Monday afternoon, trading up by roughly 0.20% at $65.48 as of 2:20 p.m. ET. Options volume on the stock is well above average levels today, with around 12,500 contracts traded on the name versus an average daily reading of around 1,700 contracts. Most of the volume is concentrated in September expiry calls, perhaps ahead of the company’s second-quarter earnings report set for release ahead of the opening bell on Thursday. Time and sales data suggests traders are snapping up calls at the Sep 67.5, 70.0 and 72.5 strikes. Volume is heaviest in the Sep 72.5 strike calls, with around 4,600 contracts traded against sizable open interest of approximately 11,800 contracts. It looks like traders paid an average premium of $0.37 per contrac...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Sabrient

Sector Detector: Bold bulls dare meek bears to take another crack

Courtesy of Sabrient Systems and Gradient Analytics

Once again, stocks have shown some inkling of weakness. But every other time for almost three years running, the bears have failed to pile on and get a real correction in gear. Will this time be different? Bulls are almost daring them to try it, putting forth their best Dirty Harry impression: “Go ahead, make my day.” Despite weak or neutral charts and moderately bullish (at best) sector rankings, the trend is definitely on the side of the bulls, not to mention the bears’ neurotic skittishness about emerging into the sunlight.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, incl...



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OpTrader

Swing trading portfolio - week of July 28th, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW in the comments below each post. 

Our weekly newsletter Stock World Weekly is ready for your enjoyment.

Read about the week ahead, trade ideas from Phil, and more. Please click here and sign in with your PSW user name and password. Or take a free trial.

We appreciate your feedback--please let us know what you think in the comment section below.  

...

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Digital Currencies

BitLicense Part 1 - Can Poorly Thought Out Regulation Drive the US Economy Back into the Dark Ages?

Courtesy of Reggie Middleton.

An Op-Ed piece penned by Veritaseum Chief Contracts Officer, Matt Bogosian

This past weekend (despite American Airlines' best efforts), Reggie and I made it to the Second Annual North American Bitcoin Conference in Chicago. While there were some very creative (and very ambitious) ideas on how to try to realize the disruptive Bitcoin protocol, one of the predominant topics of discussion was New York Superintendent of Financial Services Benjamin Lawsky's proposed Bitcoin regulations (the BitLicense proposal) - percieved by many participants at the event as an apparent ...



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Market Shadows

Danger: Falling Prices

Danger: Falling Prices

By Dr. Paul Price of Market Shadows

 

We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about." 

All three major indices gave up some ground with the Nasdaq composite taking the hardest hi...



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Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

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And get this…had you done nothing b...



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