Bank of America to Create Unit for Toxic Loans

[alp227]

Source: The New York Times

Bank of America said Friday that it would create a unit to handle 1.3 million soured mortgages as Brian T. Moynihan, the bank’s chief executive, tried to distance the company from the fallout of the mortgage crisis.

The entity, known as Legacy Asset Servicing, will become the repository for tens of billions of dollars in troubled assets, including many subprime products that are no longer offered by Bank of America but continue to hang over the company.

Most of the loans were picked up when Bank of America bought Countrywide Financial in 2008.

Read more: http://www.nytimes.com/2011/02/05/business/05bank.html

[DCKit]

1. Who could have seen this coming? Series!!! nt

[tomm2thumbs]

2. is this pre-Wiki leak? damage control?

[dixiegrrrrl]

3. And that is how BOA avoids being sued.

That is what PG%E did in Ca. over the Enron thing, to avoid paying damages.
they created a "subsidiary" that held all the bad debt but none of the money, the money went to PG$E.

Those "Toxic loans" actually do not exist on paper, it has been proven.
So BOA now has this handy subsidiary that holds garbage, off BOA books.

Clever.

[ocd liberal]

4. Oh , to be a fly on the wall

in a Legacy Asset Servicing office...
How could you NOT answer the phone, "Toxic Assets, how may I destroy you?"

[sarcasmo]

5. Kick.

[bemildred]

6. And that unit will then go bankrupt, and get a government bailout. nt