I wonder what has taken so long? The buyers of JUNK mortgages via the magic of Fraud Street (read: alchemy) have finally had enough: they want out of the fraudulent investments. It is called a "put back" as the putrid mortgages would be put back to the offending banksters. It reminds me of a scene from Young Frankenstein, click here to watch
From Bloomberg...
Oct. 19 (Bloomberg) — 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.
Trustee Duties
“The letter states a demand directed to Countrywide to cure the defaults,” said Kevin Heine, a spokesman for BNY Mellon. “It does not ask BNY Mellon to take any action. BNY Mellon will continue to perform its duties as trustee.” Charlotte, North Carolina-based Bank of America will “defend our shareholders” by disputing any unjustified demands it buy back defective mortgages, Chief Executive Officer Brian T. Moynihansaid today. Most claims “don’t have the defects that people allege,” Moynihan said on Bloomberg Television, referring to so-called putbacks, in which guarantors or investors in mortgage-backed securities ask to return bad loans. “We end up restoring them, and they go back in the pools.”
“We continue to review and assess the letter, and have a number of question about its content, including whether these investors have standing to bring these claims,” Bank of America Chief Financial Officer Charles H. Noski said today on a conference call with analysts. “We continue to believe the servicer is in compliance with the servicing obligations.”
Bank of America cannot withstand this. It did not keep enough money on hand for a "Put ze' mortgage back!" mass action.
Will the government take down BofA via the FRBNY?
Will the Fed truly defend its "customers" - the TAX payer? After all, the Fed has purchased mountains of this garbage to help these fraudulent banksters, but the "investments" are now stinking like 10-day old fish in the sun, which is packed to the gills in the Fed's Maiden Lane funds. Will JPM take over BofA?
...Or will the government actually make the banksters fend for themselves for a change? If so, there is probably only one reason: it knows there is a much bigger problem on the horizon it will need to bail out...State, county, and municipal bankruptcies across the country.
From Bloomberg...
Oct. 19 (Bloomberg) — 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.
Trustee Duties
“The letter states a demand directed to Countrywide to cure the defaults,” said Kevin Heine, a spokesman for BNY Mellon. “It does not ask BNY Mellon to take any action. BNY Mellon will continue to perform its duties as trustee.” Charlotte, North Carolina-based Bank of America will “defend our shareholders” by disputing any unjustified demands it buy back defective mortgages, Chief Executive Officer Brian T. Moynihansaid today. Most claims “don’t have the defects that people allege,” Moynihan said on Bloomberg Television, referring to so-called putbacks, in which guarantors or investors in mortgage-backed securities ask to return bad loans. “We end up restoring them, and they go back in the pools.”
“We continue to review and assess the letter, and have a number of question about its content, including whether these investors have standing to bring these claims,” Bank of America Chief Financial Officer Charles H. Noski said today on a conference call with analysts. “We continue to believe the servicer is in compliance with the servicing obligations.”
Bank of America cannot withstand this. It did not keep enough money on hand for a "Put ze' mortgage back!" mass action.
Will the government take down BofA via the FRBNY?
Will the Fed truly defend its "customers" - the TAX payer? After all, the Fed has purchased mountains of this garbage to help these fraudulent banksters, but the "investments" are now stinking like 10-day old fish in the sun, which is packed to the gills in the Fed's Maiden Lane funds. Will JPM take over BofA?
...Or will the government actually make the banksters fend for themselves for a change? If so, there is probably only one reason: it knows there is a much bigger problem on the horizon it will need to bail out...State, county, and municipal bankruptcies across the country.
Previous Day's Trading Room Results:
Trade Date: 10/19/10
E-Mini S&P Trades*
(before fees and commissions):
Trade Date: 10/19/10
E-Mini S&P Trades*
(before fees and commissions):
1) No "Secrets" trades filled today.
2) Algorithm positions (5)
3) “Reading the Tape” positions (13) combined Secret’s, Algo, & “Reading the Tape” total +14.25
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