BOA PAYING $335 MILLION TO MINORITY HOMEOWNERS FLIM-FLAMMED BY BOGUS MORTGAGES

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EDITOR’S COMMENT: OK think about it. BOA is going to pay hundreds of millions to those minorities who were steered into either high interest rate loans or sub prime loans that were loaded with exotic features, including high interest rates. ” High Interest” means an interest rate that was significantly higher than the one the borrower was qualified to receive. Countrywide targeted the least sophisticated Borrowers in order to get away with these shenanigans. The higher the interest, the higher the payments. The higher the payments, the more likely the loan would fail. And by definition these were loans that SHOULD have been given to these people at more affordable rates and terms.
WHY WOULD A TRUE LENDER PRESS UNSOPHISTICATED BORROWERS INTO LOANS THAT WERE MORE LIKELY TO FAIL THAN THE LOAN TERMS THOSE SAME BORROWERS WERE QUALIFIED TO RECEIVE?
Now when some minority homeowner is in court, the Bank will say that the matter has been settled or at least partially paid through the settlement. The answer from the homeowner should be that they did receive some money from the DOJ action but that didn’t cover their damages or their case. In fact, it goes to corroborate their argument that the amount demanded is wrong and that the lien very likely never attached to their real property, leaving the “creditor” with nothing more than an unsecured loan that could be discharged in bankruptcy. Such litigants should hope and prey that the Bank makes that argument.
If the Bank argues payment in a collateral case from a collateral source (remember that the forecloser is mostly the so-called trusts, not the Banks) the homeowner’s response should be that the Bank has now admitted that third party and collateral source payments should be counted, to wit: such payments are (a) subject to an accounting and (b) do set off the amount due to the extent paid.
THAT MEANS PAYMENTS RECEIVED FROM INSURANCE, CDS, AND CREDIT ENHANCEMENTS MUST OFFSET THE AMOUNT DUE FROM BORROWER TO THE EXTENT THAT SUCH MONEY WAS RECEIVED BY THE CREDITOR OR ON BEHALF OF THE CREDITOR. THIS ASSUMES THAT THAT THERE IS EVEN A CREDITOR IN EXISTENCE BECAUSE REPORTS RECEIVED BY LIVINGLIES INDICATES THAT THE SPVS (trusts) HAVE BEEN DISSOLVED LEAVING HALF, AT BEST, OF THE TRUSTS STILL IN EXISTENCE, WHICH MEANS THE INVESTORS HAVE SETTLED OUT.
THE CREDITOR HAS BEEN PAID BUT THE BANKS KEEP ASSERTING A CLAIM AGAINST THE BORROWER FOR THE FULL AMOUNT WITHOUT SET OFF FOR PAYMENTS RECEIVED FROM BAILOUT, INSURANCE, CREDIT DEFAULT SWAPS ETC.
BUT WHY DID THEY WANT TO MAKE LOANS THAT WERE TOXIC TO ANYONE, LET ALONE MINORITIES? Because that is where they made their money, the really big money, that is hiding off shore now, siphoned off from the the U.S. Economy, from consumers, homeowners and borrowers without any accounting because the government decided that ” balance sheet” transactions were both legal and did not need to be disclosed.
They took a loan that was nominally valued at $200,000 and sold it to the investor pools for $300,000 and called it ” trading profits.” In truth it was pure theft. It’s like allowing them to sell your own car to you, take a profit, and then tell you that you have a loss, now, which is their profit.
They took the investor’s money, bought crap, slapped a value on it that was inconceivably wrong, and then sold it back to the investor for 100 cents on the dollar that the investors gave them. Their cost for the crap (a bad $200,000 loan that over valued, and used an overvalued appraisal to establish a false value of the collateral) they funded (from investor money) was $200,000, and it was only worth $100,000, so the investor put up $300,000 and got at best a $100,000 asset. After that it went down from there diminished by falling markets, fees from the intermediaries etc.
The investment Bank took the difference between the amount the investor paid for the bogus mortgage bonds and the amount actually used for funding mortgages and booked the transactions as trading profits and fees.

Maybe someday the government experts will understand what we already know —- we were all lied to and screwed —- taxpayers, insurance companies, investors, and homeowners. But because the learning curve is so steep and the path so convoluted, by the time government actually publishes how we were screwed and why the foreclosures were totally wrong, the tsunami of foreclosures divesting at least 12 million families of their homes, their lifestyles and even their lives, the economy will be down the drain. Stop the foreclosures, and we stop the drain. Allow these illegal, improper and foolish foreclosures and you are sealing the fate of America and all it’s citizens.

NAACP, NCLR laud Bank of America for Countrywide settlement

by Kerri Panchuk, HousingWire

SEE FULL ARTICLE ON HOUSINGWIRE.COM

Bank of America’s (BAC: 5.3893 +3.05%) $335 million fair-lending settlement with the Justice Department drew praise from two groups who applaud the banking giant for resolving inherited issues from Countrywide Financial Corp.

The bank agreed to pay millions in restitution to compensate Hispanic and black borrowers who were steered into subprime mortgages and home loans with higher fees during the origination process.

“To its credit, Bank of America — which was not named in the investigation — immediately shut down Countrywide’s harmful practices when it acquired the company in 2008,” said the National Council of La Raza in a statement.

The National Association for the Advancement of Colored People also released a statement saying Bank of America “takes one more important step toward creating a fairer lending environment for consumers.”

The NAACP went on to say that BofA’s acquisition of Countrywide allowed it to rectify what the organization considers Countrywide’s “most egregious practices.”

“These included ending: no documentation loans, pay option adjustable-rate mortgages and exploding adjustable rate mortgages,” the NAACP said. “Additionally, in March 2011, Bank of America became one of the first financial institutions to endorse the NAACP’s responsible mortgage lending principles, which deal directly with the issues in the lawsuit by setting standards of non-discrimination, fairness and transparency in ways that help ensure our nation and all our communities will continue to move forward towards a day of greater shared economic strength and stability.”

The lawsuit resolved by Wednesday’s settlement is the result of Countrywide lending practices that occurred between 2004 and 2008, impacting more than 200,000 black and Hispanic borrowers.

Write to: Kerri Panchuk.

27 Responses

  1. You’re a really useful site; could not make it without ya!

  2. @ cubed2k;
    Compound interest was introcuced around the time of Ancient Rome. Although the moneychangers were driven from the Temply by Jesus, and the word “Usury” was removed from the dictionary for a time, the practice of charging interest on principle plus interest enjoyed a comeback in 1825 in the United States.
    By 1873, influential men were able to lobby congress and get the coinage laws changed, which essentially assasinated silver. The gold standard was implemented. Silver has always been the people’s money, and gold the rich man’s money. Gold was in short supply. It became hoarded, although tons of it left the country. Demonitizing silver, allowed the rich men to implement fiat or paper currency, backed by nothing but thin air, since silver was only allowed for transactions under $5.00 in value.
    With the passing of the federal reserve act, we allowed the term “usury” to take on new meaning, because this private cartel of banks took over the issuing of money, thus controlling both the supply and the interest rate. Financial collapse, which is inevitable, can be postponed by simply printing more money under the paper system.
    While I’ve never ready anything that credtis a specific individual with the creation of compound interest, you can bet it was a banker.

  3. Bank Of America(Countrywide) Settlement for charging higher interest rates to minorities. WOW!
    Do the math. $335,000,000 settlement divided by 200,000 homeowners = $1,675 per homeowner.
    On an average loan of $150,000 per homeowner if the interest rate was 2% higher, lets say instead of 7%, the minority homeowners were charged 9%.
    Over the the life of the loan (30 years) the bank will make approximately $75,000 more on the minority loan.
    Do the math! 200,000 homeowners times $75,000 =
    $15,000,000,000. Read it again, $15 BILLION DOLLARS.
    The Bank will make $15 Billion minus the settlement amount of $335 million.
    They’ll still make over $14,665,000,000.
    By the way, the homeowners’ interest rates will stay the same.

  4. Bank Of America(Countrywide) Settlement for charging higher interest rates to minorities. WOW!

    Do the math. $335,000,000 settlement divided by 200,000 homeowners = $1,675 per homeowner.

    On an average loan of $150000 per homeowner if the interest rate was 2% higher, lets say instead of 7%, the minority homeowners were charged 9%.
    Over the the life of the loan (30 years) the bank will make approximately $75,000 more on the minority loan.

    Do the math! 200,000 homeowners times $75,000 =
    $15,000,000,000. Read it again, $15 BILLION DOLLARS.
    The Bank will make $15 Billion minus the settlement amount of $335 million.
    They’ll still make over $14,665,000,000.

    By the way, the homeowners’ interest rates will stay the same.

  5. “Chump change” the attorneys will get 50%…..and what about the 8B multi-state CW settlement back in 2008 with the AGs?

    Did anyone see a dime or at the very least get a Mod. that wasn’t later resinded?

    “Justice Department” = toxic waste! What a joke.

  6. When did compound interest start?

  7. Who started compound interest?

    When did it start?

    Anybody?

  8. The public do not get compound interest on savings,,,,,,,,,,,,only the banks get compound interest,,,,,,,,,

    everything you borrow gets compounded against you,,,,,,,,,,,

    your savings now earn very, very , very little compound interest

    So you think your money in a bank gets lent to others?

    What a joke……………

    I am laughing my ass offf

  9. Neil………..

    it’s all money making money on money,,,,or compound interest—-banking,,,,,,,,but where is the actual product or service exchanged…………why it all gets lost thru leverage and securization of cash flow……nowadays….and all that exchanging of money of interest and promise to pay,,,,,,,,,,but the actual product or service has a certain value at a certain time and a new component, called compound interest and time to pay back at a certain rate of interest………….and it is all time. Time payments or cash flow, hence money making money on money, compound interest. Do away with compound interest.

    Do away with compound interest and securization,,,,,,,,,and all might be well.

    Consider, do a google search for who started compound interest, Nothing shows up,———-it is a big secret…………….when did it start? Do a google search? When did compoind interest start and who thought of it? I would like to know. Anybody out there reading this? Have an answer?

    Who came up with the idea of compound interest:

    http://en.wikipedia.org/wiki/Compound_interest.

  10. @Anonymous,

    I must be a tad thick… Tell me again how those “predatory lending” lawsuits allow for avoidance of criminal investigations?

    Criminal investigations are initiated by different branches of government: SEC, JOD, AGs, etc. Predatory lending lawsuits can be initiated by… pretty much anyone, individually or as class actions.

    How does one exclude the other? How does civil exclude criminal and vice versa?

  11. Enraged,

    No No NO — although minorities were targeted, the issue is not the “target” — the issue is the fraud in the refinance itself. When is anyone going to get it??? These were NOT valid mortgages and not valid refinances. “Predatory lending” is letting the perpetrators off easy. The so-called loans were fraudulent from the onset. Although perpetrators may have targeted certain victims to complete their fraud, the fraud lies in the “non”-mortgage itself. There was no valid mortgage. There was no valid refinance. The subprime “mortgages” never legally existed.

    Predatory lending settlement allows avoidance of criminal investigation.

  12. The NAALCP (National Association for the Advancement of Liberal Colored People) are the biggest racists.

  13. who are the racists now?

  14. @Carie,

    Colorted folks, colored people, that’s whom NAACP stands for, right? And I also referd to old folks. Folks, people, big difference!

  15. What about the asians who got sucked into this deal? This administration are racist.

  16. “Colored folks”? Wow—the fifties are back!

  17. @Java,

    Something just crossed my mind…

    It’s called “predatory lending” for a reason. Predators go after the weakest elements of the herd, not after the strongest ones. Banks went after colored folks, knowing that they were not as well-educated as others or that they didn’t understand English well enough. They went after the old folks, knowing that they have integrity, money (depression era people saved a lot) and that they could never have imagined anyone acting like the banks did. They were trusting.

    They went after single mothers, knowing that fear for the kids was their guiding motivation.

    Find your weakness and you’ll have your angle of attack.

    Banks were real bastards!

  18. @Java,

    White folks did too but the object of that action was discrimination. It’s a good angle for those who are not white and were screwed and I won’t take it away from them. The more we progress into discovery of the extent of the fraud and the motivations behind banks actions and the more angles will become very clear and available to attack them. At some point, everyone might end up having the choice between which allegations to bring forth and which ones are best to raise in order to obtain vindication.

    That being said, $1,675 is still grossly inadequate to right that kind of a wrong.

  19. So no white people received sub prime loans……..I did not know that !!!

  20. @tnharry,

    You put the finger on one of my pet peeves… From the very beginning, I have said: “No” is a full sentence. I raised a while back the issue of people who had accepted to be modified upwards and still signed on the dotted line… to be foreclosed on a few months later. From what I understand, it happened a lot!?? How can that be? If someone couldn’t pay the @1,200 mortgage they already had for loss of a job, overexpending, medical bills and what not, what kind of thinking allowed them to agree to paying… $1,500?

    I am not judging anyone and everyone faced different circumstances but accepting to be modified upwards would never have been an option for me. The common sense aspect of it lacks completely. I personally take some responsibility in the fact that I ran into difficulties with my own mortgage: I had no down payment (in Europe, I would never have been given a loan and I knew it), I assumed my job would last forever (it didn’t) and s%#@ happened. So, in the big scheme of things, I would agree that I probably bear… 25% of the responsibility. Luckily for me, the state I am in is a state of comparative negligence.

    But to claim that “the banks made me do it” goes a little too far. In fact, I think that kind of an argument is detrimental for everyone and I believe it is one of the reasons banks and media have had such a trip with blaming the homeowners…

    Guys, at least take some responsibility for where you are.

  21. @lies is all they tell.
    I could afford my home. I over paid the payments, I was beating that principal down to a pulp. I never treated it like an ATM, I never drew any equity from it.
    Mine was stolen. I got less home than I could afford.
    I went over the papers at closing, and read them again within 3 days to see if I needed any questions answered.
    A business I’d never contracted with demanded money, and my bank had decided to ‘disappear’ (poof!).
    To me that’s what happened but behind the scenes were SEC filings where there was some takeovers that I was not aware of. The bank was taken over first and the servicer a year later, but in the process a new servicer/new name surfaced.

    With no assignment I didn’t trust them. There is a maxim in Law that if you pay someone and don’t owe them you can’t claim an injury or something like that. Let me find it.
    Cujus per errorem dati repetitio est, ejus consulto dati donatio est.
    Whoever pays by mistake what he does not owe, may recover it back; but he who pays, knowing he owes nothing; is presumed to give.

    If you saw papers where the interest rate was too high, and you saw your monthly payments were unaffordable, you really should have walked away.

    You have a right to the ‘pursuit of happiness’, but it’s not guaranteed you can reach all pursuits all the time.

    Having property meant insurance, taxes, utilities, and your children are still growing and you may have had transportation that had it’s own requirements for upkeep, and then the unexpected expenses of illnesses, or visits away from home, or visitors to your home, birthday parties, holiday celebrations, gifts, charities, etc..

    You always leave yourself room to live your life with the income you receive. I love you and I want for you and your family to be safe always. I want for you and others to teach our children these things that have happened because without them learning this, it will happen again.

    The people from the time of the depression remembered what was done to them. They were very frugal and did not trust anyone. The system have people that live a long time. They live long enough to put plans in place that will be implemented a hundred years later. They are patient and live a long time.

    As this plan falls apart, they look it over to see what they could have done differently and they make another 100 year plan. Teach your children like the ancient civilizations did. They taught through story telling and did not rely on writings that could be destroyed, or stolen, or lost.

    Trespass Unwanted, corporeal, life, Free and Independent People

  22. How nice $1675 per black or hispanic homeowner – if the number was a firm 200,000 black and hispanic borrowers; but the last line says ‘more than 200,000’.

    Oh the distortion behind these truths.

    LOL. Yeah, tell them they settled with the DOJ and now it’s time to settle-up with the real party on the other side of that settlement.

    No one is made whole by that decision except a bank that can get a zero interest loan from the Federal Reserve has turned around and given it to the government.

    Am I the only one seeing through this paradigm?

    Light and much Love,
    Trespass Unwanted, corporeal, life, Free and Independent People, jure divino (by divine right), in jure proprio (in one’s own right)

  23. @lies – i’m sorry but i don’t understand how they “put” you in a mortgage you couldn’t afford. what kind of gun were they holding to your head when they did it? what i really mean is that you could either afford it or not afford it, and what was listed on the loan application as your income is irrelevant to that issue. unless the repayment terms on the pile of papers you signed were blank, redacted, or you were forced to sign while wearing a blindfold, that argument doesn’t work…

  24. Doesn’t matter…have they EVER paid a dime for anything they’ve agreed to by stipulation or other? Billions they’ve been fined and yet to pay a dime. Same will be here…at most a bad headline, nothing new…won’t hurt them a bit and once again won’t cost them a thing compared to the profit they made regardless of all the whining about how much they’re “losing”…as if…

    Yep, continue to be screwed and tatooed…the game continues…

  25. cha cha (sorry i am all choked up) so boa says ok to do that non minority people? i am just not getting this whole scam the people because they dont know any better attitude. see we all choose to use services in but are only educated to do our particular job. how many of us can deliver our own babies and resusitate an newborn gasping for breath, or do surgery on one self, or know how to extract a tooth from a human???? we all use services of other humans wether we are minority or not we all use services and none of us deserve to have any scams done to us . we trusted banks with our info. our paycheck stubs with our ss#’s and what do they do scam us all qualify us for high intrest rates then we should have, put us in homes we could not afford by lieing about out income. come on people this has been done to everyone by all banks everyone please wake up. this is just a smoke screen so judges think boa is doing somehting good.

    but let me tell wells fargo in florid put me and my husband in home we could not afford. he was unemployed and i had 19 years of verifiable income. to put us in a they chose stated income loan. for what reason. if i could not afford this house i would like to have know and bought a house i could afford instead of waiting for an entity to steal it from me to collect credit default swap insurance. why not say sorry mr and mrs your salary is to low fo rthis home. there arhomes to choose from. ahhh to bad my boys would have had to share a bedroom or maybe not have a pool. you know my kids are now 6 years old and they are not using it anyway. why do that to hard working folks. they did this to everyone why not compensate all race and people we were all scamed into these homes.

  26. I don’t want to poopoo this settlement but, frankly, it sucks (pardon my French)! $335,000,000 : 200,000 = $1,675.

    What is the likelihood that the people involved overpaid largely in excess of $1,675? I would think… pretty high! And for those among them who ended up losing the house, it doesn’t even cover a decent foreclosure defense attorney…

    It is progress, granted. But isn’t that kind of progress inadequate at best? True progress means going after the heads and prosecuting them, dismantling the banks, seizing their assets and redistributing among everyone who suffered.

  27. What about Whitey? He/she werent screwed? What about the Asians? What about the Arabs? What about the Eskimos? What about he Martians?

    Discrimination Sucks. This is reverse discrimination.

    NEVER AGAIN

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