Bank of America 8.4bil restructure
The bank said in astatement the program was designed to help borrowers who financed their homes with high-risk subprime loans serviced by Countrywide,which it acquired in July. The announcement came after Countrywide Home Loans reached alandmark settlement with 11states after being sued for"predatory"lending practices. "With this settlement,homeowners will receive direct relief from the catastrophic damage caused by Countrywide,"California Attorney General Jerry Brown said in astatement. "Countrywide's lending practices turned the American dream into anightmare for tens of thousands of families by putting them into loans they couldn't understa nd and ultimately couldn't afford." The statement said Countrywide deceived borrowers by misrepresenting loan terms,loan payment increases,and borrowers'ability to afford loans. The California Attorney General's statement said the settlement was the largest predatory lending settlement in history,eclipsing the 484million-dollar payout by the Household Finance Corporation in 2002. The lawsuit against Countrywide was launched on June 30,prior to its acquisition by Bank of America. Barbara Desoer,president of Bank of America's mortgage,home equity and insurance services,said the restructuring of the loan portfolio would"put borrowers back on the path to sustained home ownership." Bank of America serves more than 59million consumers and small businesses in the United States and has more than 6,100retail banking offices in the country. Countrywide's woes at the time of its purchase reflected the troubles of the overall US housing market and the lender is exposed to losses in the subprime mortgage market,which catered to borrowers with weak credit histories. Last October,the company posted its first quarterly loss in 25years amid surging mortgage defaults.this video run in 60minutes 10-05-08.This segment briefly explains what happened to Wall Street,pay attention to the term"credit default swaps".rumor of abankrun on BAC in past 2days.Let me try to make all these BS in an easier way to understand.This is nothing but ascam and it has been going on for over 50years in the US,but this time is is just too big. Back in the 1950s and 1960s and 1970s,a bunch of really smart guys from the big American banks were making huge loans to dictatorships in South America.They knew damn well that the loans could never be paid back.See,they knew that every time they loaned$100million to acountry run by General So and So,within 2months awoman who happened to be General So and So's wife would show up at their local branch in Miami,and her bodyguard would be carrying$10million in cash to be deposited in their bank accounts.And afew days before that,his mistress would show up with one suitcase.And amonth after that,the Vice President would show up with asuitcase.So they knew damn well the money was being stolen,and thus could never be paid back(though the South American countries would eventually try,and hyperinflation would be the result). But nobody really care because the defaults came 10,20,and 30years later,and the"smart"guys who made the loans had long been promoted by then with the 3decades worth of promotions and bonuses never had to be paid back,and the scamsters on the other side,the dictators were also long gone by then. The more interesting crooks are the ones who came later that still in the business of getting promotions and bonuses from making the loans 10to 30years after the scam started.Many of these crooks assumed that if it was working in the past,it would continue to work now and in the futures.Let me put it this way,most scamsters are as duped as the people being scammed.They are now doing it to themselves as they were buying up their own scams.The smart and lucky ones get out long before(Paulson).What complicates the current scams(relative to the scam of loaning money to dictators)is the time frame was compressed.Instead of decades,we are talking years now. What make this more tragic is not that abunch of scamsters that defrauded themselves and abunch of marks.What makes this atragic is that the bills ended up getting paid by athird party who didn't participated in the scams. The real reason is simple,the really guilty,the one who cook up all these scams never pay aprice,ever. If we want to prevent scams like this from ever happen again in the future,we need to prosecute all the former heads of every investment bank and every other organization that participated in the craps,and that includes our current Treasury Secretary.We need to charge them with"financial terrorism."Lock these criminals in Guantanamo Ba yfor the duration of the economic problem and for however long the ripples may be moving through the economy and make them give up all other financial terrorists. You can't stop smart and lucky scamsters from dreaming up more scams,especially the ones that get out on time.But bailing the ones who were too slow and too stupid to get out on time?This will just guarantees that the next bunch of thugs joining in and thus grow to abigger proportions. Capitalism doesn't work,and it is not capitalism,if people don't ever have to pay aprice for failure.With the tax payers flipping the bill on this scam,you will see the next scam will be 10to 100times bigger. Good luck to us all. |
