DEATH WATCH: BOA TO CUT 10,000 JOBS — RUMORS OF RESTRUCTURING FORECLOSURE PROCESS

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EDITOR’S NOTE: There also reports that BOA is going to or already has appointed a czar to restructure the entire foreclosure process. Of course any employee of BOA must protect the corporate assets, so out of corporate loyalty the czar will be required to assume the assets on the balance sheet are real.

What BOA and the other banks need is an effective way to clear title using conventional means. Getting the signatures of the appropriate people in the title chains through payment is the obvious way although it is expensive — but not more expensive than going out of business.

CHARLOTTE, NORTH CAROLINA (BNO NEWS) — Bank of America Corp. is cutting at least 3,500 jobs by the end of next month as part of a major restructuring effort which could see as many as 10,000 job cuts, the Wall Street Journal reported on Friday.

The report, citing people familiar with the situation, said the 3,500 positions to be cut this quarter are spread across the bank, including investment banking and trading. It said some employees have already been notified.

But thousands more could be laid off at the Unites States’ largest bank by assets as part of an aggressive and major restructuring plan. Executives at the bank are still discussing the total number of job cuts, but one source told the newspaper that at least 10,000 jobs are likely to be eliminated.

Brian Moynihan, CEO of Bank of America, is seeking to reduce the bank’s expenses by as much as $1.5 billion per quarter. “I know it is tough to have to manage through reductions,” Moynihan said in a memo to top managers on Thursday night, according to the Journal. “But we owe it to our customers and our shareholders to remain competitive, efficient and manage our expenses carefully.”

The Bank of America, which was founded in 1904 and has relationships with nearly all U.S. Fortune 500 companies, did not immediately comment on the report. The Wall Street Journal said a final decision about the number of job cuts is not expected until early next month.

BAIR: INDUSTRY COULD BE REELING FOR YEARS TO COME

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EDITOR’S NOTE: They report this like $20 billion is a big number. The Banks caused tens of trillions of dollars in damages, stole $13 trillion from investors, stole some $5 trillion worth of property from homeowners who legally still probably own the property but don’t know it, and they are making a big deal out of $20 billion. That number is a rounding error on the real numbers.

 

Foreclosure Fraud Price Tag: $20 Billion

Foreclosure Crisis

First Posted: 06/ 6/11 09:52 PM ET Updated: 06/ 6/11 09:52 PM ET

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WASHINGTON — The nation’s largest mortgage companies are operating on the assumption that they will have to pay as much as $20 billion to resolve claims of widespread foreclosure abuse, an amount four times what they had originally proposed, the top federal official overseeing the discussions told state officials Monday, according to people who participated in the conversation.

Associate U.S. Attorney General Tom Perrelli told a bipartisan group of state attorneys general during a conference call that he believes the banks have accepted the realization that a wide-ranging settlement to the months-long probes will cost them much more than the $5 billion offer they floated last month, according to officials with direct knowledge of the call. Perrelli said he’s basing his belief on his recent conversations with representatives of the five targeted firms: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

Three unresolved issues remain, these people said. State and federal officials have not agreed on the scope of banks’ release from liability that would accompany such a deal; negotiators continue to hammer out how much of the money pot will be split between restructuring borrowers’ mortgages and bank fines, and officials are not yet near an agreement on how the coalition of state and federal government agencies will monitor and enforce bank behavior in the wake of a settlement agreement.

The settlement talks are the result of state and federal investigations launched last autumn after widespread reports that the five largest mortgage handlers illegally seized the homes of an unknown number of homeowners and improperly accelerated foreclosure proceedings by failing to amass required paperwork, in some cases allegedly lying about it to local judges. Over the past couple months, government officials have been in discussions with the banks to resolve claims of past abuses and set new standards to govern bank dealings with distressed homeowners.

The banks seek a quick resolution, according to sources who have participated in settlement talks, as falling home prices, a continuing high rate of delinquent borrowers, stagnant home sales, rising unemployment and slower economic growth batters bank stocks. Shares of Bank of America, the largest mortgage servicer, hit a two-year low Monday. Citigroup fell more than four percent. The 24-company KBW Bank Index has fallen nearly 11 percent over the past three months.

Top officials in the Obama administration, like Treasury Secretary Timothy Geithner, have said they want a quick settlement, too. Bank regulator Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, told a Senate panel last month that a settlement must be reached due to “significant” damages the banks face from “flawed mortgage banking processes [that] have potentially infected millions of foreclosures.”

The industry could be reeling for years, Bair warned.

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