Reuters: Calls Mount to Break Up Bank of America


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Weakness of BOA Poses Threat to Entire System

Editor’s Comment: When I proposed it 4 years ago, it was dismissed as the ravings of a fringe lunatic. Now it’s mainstream. BOA, Citi, JPM et al are in no better shape than the banks that were allowed to fail. In fact, they are in worse shape than some of them and should be allowed to fail because they are not viable businesses and represent a large black hole through which taxpayer money, debt and revenue is poured with regularity.

Now leading groups of consumer advocates, academics and economists are calling for the dismantling of the megabanks, some for the reasons expressed here, and some because from a specific financial perspective — it is too dangerous to leave a tottering giant riddled with cancerous lesions to lead the financial markets. It makes no sense. A “run on the bank” is almost inevitable and when it happens the result will be catastrophic, the group says, and I agree with them.

See Full Story on Reuters

(Reuters) – A group of consumer advocates, academics and economists want to end “too-big-to-fail” banks, starting with Bank of America Corp.

The group, led by consumer advocacy organization Public Citizen, plans to file a petition with the Federal Reserve Board and other regulators on Wednesday asking them to carve the bank into simpler, safer pieces.

The Fed and the coalition of regulators known as the Financial Stability Oversight Council have the authority to take such action under the Dodd-Frank financial reform law passed in 2010, the group said.

Nearly two dozen professors and groups have joined the effort.

… the petition is a dramatic criticism of regulators who have so far done little to shrink giant banks after the 2007-2009 financial crisis.

“Bank of America currently poses a grave threat to U.S. financial stability by any reasonable definition of that phrase,” the 24-page petition said.

It said Bank of America, the nation’s second-largest bank, is too large and complex, and that its financial condition could deteriorate rapidly at any moment, potentially causing the market to lose confidence in the bank.

“An ensuing run on the bank could cause a devastating financial crisis,” the petition said.

David Arkush, director of Public Citizen’s Congress Watch division, said a lot of the group’s concerns apply to other large banks, but that Bank of America is the institution most exposed to the housing crisis.

“Regulators need to get ahead of this and act proactively to reform Bank of America,” Arkush said.

Bank of America has had a tough time emerging from the financial crisis, particularly because of mortgage losses tied to its 2008 Countrywide Financial purchase.

The bank’s stock slid 58 percent last year as investors expressed disappointment with the speed of a turnaround and fear about the bank’s ability to comply with new capital rules.

Bank of America, the Fed and the Treasury declined to comment on the planned petition.

Some community groups decided to pass on signing the entreaty. Janis Bowdler, an official with the National Council of La Raza, said the letter was distributed on a list-serve for a coalition called Americans for Financial Reform, but her group decided not to join up.

“I don’t want to downplay the concerns that were raised,” said Bowdler, “but for now, a strong housing market and cleaning up Countrywide is the priority for us.”

NCLR is a national Hispanic civil rights organization. It receives financial support from Bank of America.

The Center for Responsible Lending, which has been critical of banks for mortgage lending practices, has also declined to participate. CRL president Mike Calhoun declined comment.

Bank of America was one of the large banks that received a government bailout during the financial crisis. It paid back the $45 billion in 2009, but analysts say it still needs more capital to absorb mortgage-related losses and to meet new international standards.

(Reporting By Rick Rothacker; Additional reporting by Dave Clarke in Washington and David Henry in New York; Editing by Phil Berlowitz)


26 Responses

  1. chas404,

    Of course not. Issue, again, is the MORTGAGE.

  2. Thanks for the post Joann. Seems like judges should be forced to review your examples as it supports our attempts to seek the real owner of the debt.

  3. Anonymous,

    I will go to the county and get a copy of my mortgage satisfaction letter on refi. I never got copy of the paid off note ofcourse.

    with many small bank commercial loans i had i got copies of the notes returned and crossed out/stamped etc.

    I just don’t know really where to completely go with this.

  4. iwantmynpv

    You are right on reissue discount for policy on a few year old refis. Some agents in Florida got sued for not giving the discount. In my case I don’t believe policy was ever purchased.

  5. hello Im wondering if anyone has has a notory David McCall (notary in CA # 1925272) He signed on my mortagage assignment recently and heard this was a robo signer anyone no about this???

  6. DCB- in a post earlier this week, you alluded to the FBI wanting to see “patterns” (of fraud, or illegalities,or collusion,I guess). Is this common knowledge, or are you in touch with them? I have an idea, which has evolved after 3 years of reading everything in sight and mulling it over when I wasn’t reading……….

  7. kac

    give them a taste of their own medicine, just forge any signature you like and call yourself the V.P.

  8. ANONYMOUS- thinking along your lines, I realized that if the ‘satisfaction of mortgage’* recorded in the courthouse and sent to the borrower, was released by a Trust with no loans in the PSA’s mortgage loan schedule, then that, in and of itself, would corroborate that there was no mortgage to satisfy. Indeed, the satisfaction of mortgage is an illusion. Furthermore, again, where’s the note? The note should be returned marked paid in full. Not a copy, the wet ink real mcCoy. And they aren’t being returned. Thoughts on this?

  9. You guys know very little about title insurance. The refi policy comes with a reissue premium instead of the full policy amount because the last policy was issues within 10 years.

    The refinance policy only insures back to the date of when YOUR original lender policy was issued. They are not re-insuring the owner policy they are re-insuring the a new lender policy until the date that the last lender policy was issued.

    Mutual indemnification takes care of the rest through ALTA. Sorry guys, the greedy insurance guys have their own scams going but they won’t touch this one with a ten foot pole.

    Imagine all these years we worried about the American Indian making a claim on stolen land. The banks destroyed 200 years of land records inside a decade. This is all going to unwind badly.

  10. @ Anonymous, do you have a link to that TARP footnote quote? I searched for it a while back but there are a whole bunch of TARP documents. I got lost.

  11. Yes, ANONYMOUS…and still the courts say: “All that fraud stuff doesn’t matter—what matters is you signed a note saying you would pay this back…pay no attention to the fraud, and that man behind the curtain…”

  12. Gotta love it….the ad at the Reuters story on breaking up B of A was sponsored by B of A in the ad box. Die you son of a bitch, die!

  13. Too much focus on the note. Focus on the mortgage.

  14. chas404

    Nothing paid off by refinance. Just a transfer of servicer to collection rights. The bigger the better to them. Mortgage remains — not discharged.

    Bifurcation. But, not of a valid mortgage and note. Mortgage invalid at refinance. As TARP Inspector General wrote in November 2010 (footnote 35) — “Without the note, a mortgage is unenforceable, while without the mortgage, a note is simply an unsecured debt obligation, no different from credit card debt.”

    Robo-signing goes way back. And, we thought we had a valid Discharge/Satisfaction of Mortgage? All did.

    Get back. Go back.

  15. Other issue is the HUD shows lenders title policy plus specific Florida endorsements for stuff like the lot survey etc. These all have separate charges on the HUD.

    It is not as simple as Stewart now saying well if WF wants a lender policy now and it was not issued we can issue one.

    NO. I was specifically charged for detailed insurance items on the HUD. These were disclosed to me as I was signing off on the $300k deal. If the policy was not paid for then it is insurance fraud.

    I would like to argue that this makes the entire deal fraud and should be rescinded.

    To top it off this all goes to my QWR to WF saying I dont have title insurance on a deal that you WF and FannieMae won’t disclose who the real owner of the obligation is!!!!!!!!!!!!!!!!

    If Anonymous’ theory of buying collection rights to the original note is true we need to prove it and make it stick.

    I am bumbling around here but i think the Anonymous theory proof is in the original settlement possibly via title insurance issue.

    They obviously felt they were covered via the original purchase title policy and/or only advanced $50k to $100k on a $300k deal and felt they were covered.

  16. Ian and Enraged and Anonymous thanks! Keep comments coming.

    I can’t get my head around it either.

    I did have $250k purchase owners policy in 2003 with SAME Stewart. I later refied in 05 at $300k and paid off 1st $200k nonMERs note/ servicer and small $50k 2nd. So new refi was $50k cash out.

    Get this even though I never asked for it I had SAME title agent for 2003 purchase as 2005 refi. And Stewart Title insured $250k purchase at 2003 and SUPPOSEDLY did $300k lender’s policy.

    My theory is somehow loan broker picks up that it was ABC title and $250k Stewart title policy then steers refi to same ABC title and Stewart again.

    2 yrs later obviously if there were 2003 policy then only $50k extra for new policy not much risk and I guess they figure we pocket the premium (either WF/Stewart/ABC title).

    I think that WF/Stewart just nevers funds the 2nd policy.

    Not sure how Anonymous theory of taking over the collection rights to the original $200k loan never paid off etc fits in.

    But my question to the FL Dept of insurance is simple. I paid $1500 on the HUD where is the policy? WF says we have policy just look at the HUD. Stewart says we dont have policy in our records but we can issue one when WF asks for one so why do u bother us?

    The $1500 plus interest for 7 yrs has been STOLEN. It was either funded or it was not!

    And my contention is that if WF was behind the scenes with ABC title and Stewart it was nevery disclosed and is fraud. I would never have refied.

    This leads me down the track of Anonymous but how can I prove it? I have seen the original release of original $200k non-MERS loan and it says ‘paid off’ but I am becoming an Anonymous believer.

    I have a defense lawyer but I am not attacking yet.

    I am hoping I can open up this can of worms to force the ABC title agent (which may be now defunct) to prove all accounting of the settlement.

  17. @kac,

    Don’t know where you are but you need an attorney.

    I had a similar problem and I requested my entire insurance file. I realized than that the current servicer (via assignment since 2006 but unrecorded) simply requested form the insurer that the names be corrected to reflect the assignment… without producing anything! Just a simple lettre to the insurer.

    I was livid! And to top it off, since the very beginning, all the payments to the insurance company and the local tax assessors have been processed through CoreLogic. I can verify it. My servicer has never made on payment directly and I don’t even know if they paid CoreLogic. As I said a few days ago, CoreLogic appears to be to money what MERS is to records.

  18. @Chas,

    Your theory is not farfetched. When I started searching through my paperwork, right before I filed suit, I started googling everything in sight: robo signers, companies, officers, every single entity and individual involved in my house since day one.

    Well, come to realize, the lender who handled my refi was also… the title company. In fact, the attorney who created both started out opening the title company first in the late 90s and moved on to double his profit by opening the mortgage lending firm. He is stii an officer/director of both.

    The problem I have is that, every time I study any piece of paper in my file, I uncover a new breach, whether it be of ethics or of law. Writing the systhesis of all those breaches in a coherent and meaningful way is what takes the longest. It’s almost a full time job!!!

    I simply can’t wait to be deposed.

  19. chas404- a neighbor of mine owned an insurance agency, and over a 4 year period pocketed 7 million dollars in premium for which he never placed the policies for the business owners. Two cars of FBI agents arrested him at his house fall 2010. Don’t know what came of it.
    Local chiropractor and father, both chiropractors, fleeced insurance cos. and medicare(i think) out of 6.5 million dollars by billing for work which was never done, or overbilling. Arraigned, released, back at work again.
    If your title co took the premium they charged you, never wrote a policy, that is definitely fraud. As ANONYMOUS keeps reminding us, if it was a refi, then the only money the servicer (debt collector) is out, is the cash out at closing. It is not as if they have to collect on the lender’s policy to pay off the mortgage. There is no mortgage, and the collection rights only cost 2-10cents on the dollar. They have no risk. They don’t need the lender’s policy. They just wanted the 1500 bucks.

  20. This is great. My GF and I are at the point now where she is about to pay off the second mortgage and shop the first one, demanding to see the original note before she shops it. We gave them the option of just giving her a decent interest rate but they balked at a loan mod and they balked at a refi, offering insane excuses each time by and through some guy who first said he could only do refis, but who now says he can only do mods. LOL now she will attach this report when she demands to see the original, I’ll be there with a jeweler’s glass hahahahaa…..



    KingCast/Mortgage Movies updates on Martha Coakley mortgage fines and Anderson v. Burson Motion for Reconsideration.

    To be hand delivered 26 January 2012.
    First up:

    Dear Attorneys Coakley and Abdeljaber:

    As anticipated in this 25 October 2010 journal entry, the Comptroller of the Currency (who reads my journals as noted in the Bethany Hood/Fein, Such Kahn robosigning journal entry) has no clue regarding what your office did with the fines you have assessed against mortgage companies with whom you settled cases. It only makes sense to me that someone in your office maintains that information. I am entitled to the information by law so please provide it so that the taxpayers are spared the cost of litigation. Thank you.
    Next up is Anderson v. Burson (listen to my prior interview with Hosea Anderson at bottom), to be followed by the Reconsideration Motion to be linked in the next day or so. Soon there will be an in person interview as well. Says Mr. Anderson:

    “They lied to the Bankruptcy Trustee and to the Court…. It was just a servicer at the onset, Saxon. Deutsche was nowhere around…. There are two different Deutsche entities, after a while they claimed it was Deutsche America — but it wasn’t…. They then filed a bogus allonge some 9 months later, saying it was Deutsche National.

    “Now they have already sold the house and ratified this, but they have made the same mistake all the other courts have. The Court of Special Appeals and the next court have both issued wrong opinions, so they are going to have to address that. We’ve got them all in a box, they can’t issue contradicting affidavits in BK and in the Court of Appeals.”

  21. When I took banking in college a wee back, I recall that banks were chartered and can only operate in certain territories. I think it was done that way to avoid the situation we have today. I was really stunned to see BOA, Chase etc all over the country!!

  22. a little off base, but I have a question. I had a countrywide mortgage, inflated appraisal, couldn’t refi, promised a rework, didn’t happen, applied for HAMP, investor wont participate, resigned to foreclosure–this was in 2008-09. Back then after I read the docs, I realized no lien was ever recorded, and I didn’t recv two notices to rescind–so I rescinded loan. Never got a response. As of today, still no lien recorded. In 2010, BoA started paying my homeowners ins, I called ins co, told them to take BoA off as lien holder. Now I find, two years later, they put themselves back on my insurance with State Farm–two weeks ago I had a fire that burned down a barn and damaged my house. State Farm is putting insurance check in my name and BOA’s–despite my insistence that no lien exists. How do I get my house fixed if they won’t sign the check?

  23. OK friends it seems many of you have interesting theories regarding how these loans and refi’s were done. I don’t want to be left out so here’s my little conspiracy I am investigating.

    Not to be left out I have uncovered an interesting angle myself. PLEASE HELP.

    My loan 2005 Florida refi later to be Fannie Mae etc. In Florida.

    Interestingly, I think I found out that the local defunct title agency pocketed the $1500 lender policy title insurance premium listed on the HUD.

    I have contacted Stewart Title Insurance Company directly and have emails from them confirming that there is no policy. She thinks it is no big deal and contact servicer Wells Fargo (who owns 22% of Stewart).

    Hmmm. WF says go pound sand Chas it is lender’s policy.

    My conspiracy is….. Wells Fargo involved from the beginning of refi (like you all say) and because they own 22% of Stewart they essentially just pocket the $1500 premium or split between Stewart, WF, and title agent and never fund policy and just self-insure if a claim comes up.

    However, I filed complaint with FL dept of financial services and am sticking to my guns. I am demanding copy of the commitment and insurance policy and when it was put in place.

    I have no claim other than i paid $1500 for indirect benefit of lender’s title ins policy and I want to know that it was funded. I am also claiming that I would never have refinanced if the deal had not been issued lender’s title insurance.

    I think it is insurance fraud. They either funded the policy or they did not.

    If they had an undisclosed deal NOT to title insure then they should have not charged me or discounted me accordingly.

    I can’t wait to see how this unfolds.

  24. I talked with Wells today after filing a complaint with the newly formed and headed Consumer Protection Bureau. Same BS, same refusal to reimburse me for the bogus HAMP mod payments I made two years ago. They have the paperwork right in front of them which shows their culpability and it doesn’t matter. They really don’t answer to anyone. So, folks, I do not expect much from the new Consumer Protection Bureau in the way of actual protection.

  25. DUH!!!

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