'What In The World Is Going On Inside Bank Of America?'

[geckosfeet]

Froomkin recaps some of what Black and Wray have been up to with regards to BOA's mortgage fraud machine. As most DUer's probably know, Black and Wray teach economics at the University of Missouri-Kansas City, and Black was a regulator during the S&L scandal of the 1980s during the reign of busH the first. But that's all in Froomkins piece.

Glad to see that not all journalists are dropping the ball on this, what with the rethugslicans taking over the world and all. BOA would like nothing more than for this to go away and my guess is that they are lobbying the new rethug congress bums hard for some cover.

Not sure how bullet points fit into the four paragraph rule but here goes.

Read more: What In The World Is Going On Inside Bank Of America?

What In The World Is Going On Inside Bank Of America?

In the second part of their response to Mairone, Black and Wray called on Bank of America to come clean. And in that post, they raise some fascinating questions that all of us should be asking. Among them:

• How did you determine the losses in Countrywide's assets?


• How large were the market value losses at that time?


• How large are the market value losses now?


• Which members of the due diligence team were assigned to determine the incidence of fraud in various loan categories? What did they find?


• How large a sample of subprime and liar's loans did BofA's due diligence team review?


• What likely mortgage fraud incidence did BofA's due diligence team discover?


• What did they report to BofA with regard to fraud incidence?


• What changes in lending and personnel did BofA implement in response to these findings?


• What actions did BofA take in response to finding the incidence of mortgage and accounting/securities fraud?

Ambac Assurance sued Bank of America in September, saying Countrywide had fraudulently induced Ambac to insure bonds backed by loans that they knew had been improperly made. This came after Ambac's review of the underlying loans. Black and Wray ask:

• Ambac reviewed Bank of America's assets and reported a 97 percent rate of false reps and warranties. Has Bank of America done such a review?


• If so, who conducted the review, and what rate of false reps and warranties did they find?


• Does Bank of America agree that liar's loans have extremely high fraud rates?


• Does Bank of America agree that an honest secured lender would never seek to inflate an appraisal?


• Does Bank of America agree that a competent, honest secured lender would prevent others from frequently inflating appraised values?


• Does Bank of America agree that appropriate home mortgage underwriting can minimize adverse selection and produce a positive expected value to home lending?


• How many fraudulent mortgage loans made by Countrywide has Bank of America identified?


• What is Bank of America's procedure when it finds suspicious evidence of a fraudulent loan?


• How many fraudulent mortgage loans, by year, since 2000, have Countrywide and Bank of America identified.


• Has Bank of America reviewed Countrywide's nonprime loans for fraud incidence, fraud losses, and the incidence of lender fraud and fraud by the lender's agents? Please provide the results.


• What has Bank of America done to remedy the injuries that borrowers suffered through loan or foreclosure fraud by them or Countrywide?


• Does Bank of America agree that Countrywide's nonprime lending was often conducted in a manner that was unsafe and unsound?


• Does Bank of America agree that Countrywide's record keeping was not adequate and required substantial improvement?


• At current market value of its assets, just how insolvent is Bank of America?


• How much can the bank sell its toxic assets for in today's market?


• What is the value of mortgages and mortgage backed securities held by Bank of America for which it has no clear title?


• How many mortgage-backed securities has the bank sold to investors for which it does not hold the notes that are required?


• What is the bank's current estimate of losses it will suffer in court due to lawsuits by investors?


• The top four banks are holding $434 billion in second liens (good only if the first lien -- the mortgage -- is paid), and carrying these on their books at 90% of face value. What are Bank of America's reasonably expected losses on second liens against properties that are delinquent, in foreclosure, or likely to go into foreclosure?

I have always suspected that BOA was in bed with Countrywide and that someone on the Countrywide side was going to blow a loud shrill whistle unless large sums of money were passed under the guise of buying them out.


Read more: What In The World Is Going On Inside Bank Of America?

Previous analysis from Black and Wray
Foreclose on the Foreclosure Fraudsters, Part 1: Put Bank of America in Receivership
Foreclose on the Foreclosure Fraudsters, Part 2: Spurious Arguments Against Holding the Fraudsters Accountable

[HCE SuiGeneris]

1. K & R

[gratuitous]

2. What's with all these questions?

It's not like Bank of America is going to take it in the shorts. They're heavily insured against loss. By us. Isn't that nice? For them, I mean?

[geckosfeet]

3. The questions relate to BOA's activity around fraudulent loans, resulting foreclosures,

fancy book keeping around losses associated with the aforementioned, and the shady circumstances under which BOA 'bought' Countrywide.

[DJ13]

4. This is what happens when the government lets corporations self regulate

Their interests arent in disclosure, or in correcting potentially illegal acts, no, their interests are in saving face and covering up illegal acts.