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Tag Archives: Bank of America/Countrywide

Bank of America and Freddie Mac Settle Repurchase Claims

Bank of America has agreed to pay Freddie Mac $404 million to be released from existing and future repurchase claims on approximately 716,000 loans originated in the last decade by BofA and sold to the GSE. The payment also compensates Freddie Mac for past and future mortgage insurance-related losses on the loans, but doesn't cover loan servicing obligations or private-label securities.

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Long Liquidation Times Ramp Up Loss Severities Despite Rising Prices

While home prices have risen 14 percent nationally since their trough a few years ago, Fitch Ratings points out that loss severities on residential mortgage-backed securities have only 5 percent over the past year. The slow rate of improvement is primarily the result of prolonged liquidation timelines which hit an all-time high in the third quarter. Currently, 32 percent of seriously delinquent homeowners have not made a payment in more than four years.

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JPM Settlement Means Banks May Need to Increase Litigation Reserves

JPMorgan Chase's $4 billion settlement with the Federal Housing Finance Agency (FHFA) reached late last week ""sets a relatively high bar"" for the 13 other banks still facing litigation from the federal agency, according to Fitch Ratings, which suggested Tuesday that some of the banks may need to increase their litigation reserves before settling. The $4 billion is about 12 percent of the original face value of the private-label mortgage-backed securities for which FHFA sought damages.

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Jury Returns Decision of Liability in BofA-Countrywide-Mairone Case

A 10-person panel of jurors is holding Bank of America and a mid-level manager liable for high-risk mortgages originated by Countrywide through a program known as Hustle and then sold off to Fannie Mae and Freddie Mac. After hearing arguments for four weeks in a Manhattan federal court, the jury returned a decision finding BofA liable on one charge of fraud in the civil case and finding Rebecca Mairone, former COO of one of Countrywide's lending divisions, liable on the one civil fraud charge she faced.

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Countrywide Counters MBIA Fraud Claims

The long-running legal proceedings between MBIA Insurance Corporation and Countrywide Home Loans (acquired in 2008 by Bank of America) turned into a blame game Friday as the companies battled over liability for insurance losses on bad loans.

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Walnut Place Withdraws from $8.5B Countrywide Settlement

A major player in the ongoing Countrywide settlement dropped its suit against the defunct mortgage unit on Monday. According to news services, Walnut Place, otherwise known as Baupost Group, withdrew objections to a proposed $8.5 billion settlement currently under way with Bank of America, which bought Countrywide in 2008. Several reports held that a tentative deal had been reached by institutional investors last year to settle allegations of systematic misrepresentation.

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Report: Countrywide Used ‘VIP’ Loan Deals to Influence Lawmakers

Lawmakers released a damning report Thursday that found Countrywide Mortgage deployed 17,979 loans to peddle influence with elected officials, stall GSE reform, and solicit exclusive access for Fannie Mae and the ultimately doomed mortgage unit over the course of more than a decade. The 136-page report ties off an investigation into the so-called ""Friends of Angelo"" circle that in some cases allegedly supplied mortgages free of upfront fees, origination points, and default penalties to influential insiders and power-brokers.

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In Addition to $25 Billion Settlement, Nevada’s AG Wins More

In addition to the $25 billion settlement between the five largest servicers and 49 states, Nevada's Attorney General Catherine Cortez Masto reaped more for Nevada homeowners through an additional settlement with Bank of America. Masto won Nevada $750 million in relief for lien principal payments and short sales from BofA and $30 million for consumer protection efforts. That's on top of the $1.5 billion that will go to the state from the nationwide settlement reached with all five servicers.

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Justice Department Reaches Settlement for Discriminatory Lending

The Justice Department announced Wednesday a $335 million agreement to settle allegations against Countrywide of discriminatory lending from 2004 to 2008. This settlement is the largest the department has ever reached regarding fair lending. Countrywide allegedly discriminated against 200,000 minority borrowers by charging them higher interest rates than white borrowers with matching creditworthiness and financial status. The money will go to those borrowers harmed by Countrywide's practices.

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Politicians Allegedly Participated in Countrywide’s VIP Loan Program

Rep. Darrell Issa of California sent a letter to the chairman and ranking member of the Committee on Oversight and Government Reform to inform them that he has found evidence that four current members of the House of Representatives received loans through a VIP loan program that has been under investigation since 2008. The loan program was operated by Countrywide as the ""Friends of Angelo"" program, named for CEO Angelo Mozilo.

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