Drudge Retort: The Other Side of the News
Friday, August 22, 2014

As part of the settlement, the Justice Department has issued a 30-page "Statement of Facts" signed by Bank of America detailing the actions it took that cost it a $17 billion settlement. Jacob Davidson of Money explains, "Here's what happened. In the years leading up to the financial crisis, Bank of America and Merrill Lynch sold various securities based on home loans. If the buyers paid their loan back, investors made money, but if too many defaulted, investors lost. To make sure investors knew what they were getting into, the two companies were required to report to investors on how safe these loans actually were. The problem? Both BoA and Merrill, the statement says, knew with increasing certainty that many of their loans were troubled or at least likely to be risky, and didn't fully disclose this.

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"So what did Countrywide do about it? Sell the products on the secondary market, and keep only the mortgages given to more qualified buyers.

According to the settlement document, Countrywide's public releases "did not disclose that certain Pay-Option ARM loans included as collateral were loans that Countrywide Bank had elected not to hold for its own investment portfolio because they had risk characteristics that [Countrywide Financial Corporation] management had identified as inappropriate for [Countrywide Bank]."

#1 | Posted by Corky at 2014-08-22 12:13 AM | Reply | Flag: | Newsworthy 1

The justice dept is doing a fine job of painting BofA as the evil man in the black hat, all while letting them to enjoy their freedom.

#2 | Posted by 726 at 2014-08-22 08:16 AM | Reply | Flag:

"The problem? Both BoA and Merrill, the statement says, knew with increasing certainty that many of their loans were troubled or at least likely to be risky, and didn't fully disclose this."

What a straightforward explanation that even a right-winger can understand.
Clearly it's all Barney Frank's fault.

#3 | Posted by snoofy at 2014-08-22 08:12 PM | Reply | Flag: | Funny: 4 | Newsworthy 1

Good thing there are enough regulations to force them to pay $17B back.
I will wait for the libertarians to explain how the market would punish their behavior, or does that only work in free market fantasy land.

#4 | Posted by bored at 2014-08-22 08:50 PM | Reply | Flag: | Funny: 1 | Newsworthy 1

I will wait for the libertarians to explain how the market would punish their behavior, or does that only work in free market fantasy land.

Umm, if it was up to Libertarians, B of A would not have receive a multi-billion dollar bailout a couple of years ago and allowed to go bankrupt.

#5 | Posted by Daniel at 2014-08-22 08:56 PM | Reply | Flag:

Umm, if it was up to Libertarians, B of A would not have receive a multi-billion dollar bailout a couple of years ago and allowed to go bankrupt.
#5 | Posted by Daniel

In other words, libertarians favor some form of collective punishment, where every business who relies on Bank of America for their banking needs is also dragged into insolvency.

Do libertarians wonder why nobody takes them seriously, or are they content to live apart from the rest of us in their outmoded ways, sort of like the Amish?

#6 | Posted by snoofy at 2014-08-22 09:17 PM | Reply | Flag: | Newsworthy 1

Daniel is right, sorta. The first crime was targeting unqualified and indigent borrowers. This is the lenders responsibility not the borrowers. The second crime was bundling and reselling toxic mortgage securities as if they were a secure investment, which is why they are being fined. The third crime was betting the securities would fail, because they knew they would fail. The fourth crime was bailing Wall Street out to the tune of $17 trillion, at taxpayer expense.

Countrywide and Merrill-Lynch are deeply involved in the first three crimes. BofA, no refuge of morality, had its arm twisted by the Federal Reserve to buy the two criminal organizations. BofA then went on another crime spree, aka robo-signing and illegally foreclosing, on properties where title and ownership were not filed with the appropriate counties, to cheat counties out of fees. But according to the rightie-tighties, its all the Gubment and borrowers fault.

#7 | Posted by nutcase at 2014-08-22 09:22 PM | Reply | Flag: | Newsworthy 2

The BOA share holders got slaughtered when the mortgage crisis hit. Form
$50++ a share to about $6 a share. A lot of good folks IRA's and 401k's took a beating.

#8 | Posted by SammyAZ_RI at 2014-08-22 09:29 PM | Reply | Flag:

"How Bank of America Ripped Off the Public"

They took the American people to the cleaners.

#9 | Posted by Tor at 2014-08-22 10:24 PM | Reply | Flag: | Funny: 1

The whole thing was caused deliberately by the 'federal' reserve. Perpetual linear growth is not possible in a spherical world. Thus the people must be fleeced every once in a while, and then the illusion of prosperity can be continued as the people slowly get back some of what they lost.

Hope and change morons.

#10 | Posted by Shawn at 2014-08-23 02:11 AM | Reply | Flag:

-The whole thing was caused deliberately by the 'federal' reserve.

Delusions 'R Us!

#11 | Posted by Corky at 2014-08-23 12:33 PM | Reply | Flag:

It is delusional to think that the Fed could not see a $6 trillion real estate bubble. But, it is more plausible that Greenspan was simply pumping the economy in order to help Shrub win re-election. Follow the money and it takes you straight to Wall Street AGAIN.

#12 | Posted by nutcase at 2014-08-23 09:55 PM | Reply | Flag:

The pumping has been going on since the middle east oil crisis.

It is about money and power, and nothing else.

Partisan politics is a shell game.

#13 | Posted by Shawn at 2014-08-24 07:56 PM | Reply | Flag:

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