Category Archives: Advocates and Actions

More Evidence of Home Invasions by Zombie Bank Criminal Conspiracy

New Orleans   Evidence of the death march of the zombie bankers continues as they desperately try to shore up balance sheets based on non-existent assets with continued predatory cannibalization of homeowners through blatant home invasions and foreclosure seizures.  Two more stories provide more evidence of both the criminal conspiracy and the banks blatant lying that has won them sweetheart settlements with the government to let them steal with impunity.

The recent deal with the banks that stopped their self-supervised investigation of their own wrongful foreclosures because they lacked documentation or had used robot signatures or other faulty paperwork for a sweetheart deal seems now – to no surprise! – to have been uncovering MORE faulty foreclosures than previously disclosed.  The sweetheart deal, as you will remember, had also made the banks judgment proof on these issues in the future.  Once again the government caved in and seems to have been snookered.

News breaks today that indicates that, “Wow, yes the banks evicted people by mistake!”  Seven hundred (700) military veterans lost their homes this way according to a story by Jessica Silver-Greenberg and Ben Protess in the New York Times.   Dan Petegorsky with the Campaign for a Fair Settlement correctly called the earlier sweetheart deal a “step backwards, which is an understatement if anything.  Can the deal be unraveled and really negotiated?  Unclear to me from anything I’ve seen.  At the least perhaps there are other cases still out there where a real settlement might finally be reached to provide relief for those facing foreclosures and the millions of victims crippled already.

Having ranted for years about the work of Arizona Advocates & Action winning the case of Frances Gomez in Phoenix when Bank of America stole her house, were forced to admit the theft, and then still wouldn’t return the house for years or give her a fair settlement, none of this is a surprise, but an open sore wound that the government keeps allowing to fester.

How about a break here, Mr. President?


Bank of America’s Countrywide Ghoul Strikes Again

Nebank of americaw Orleans Reports from Bloomberg News and the Los Angeles Times are raising the specter of Bank of America filing for bankruptcy for its Countrywide mortgage unit detonating the “nuclear” option to save the parent company and run from the toxic mortgage load bought in 2008.  I wonder if this doesn’t finally give another explanation to Bank of America’s continued resistance to rational modification of mortgages to allow mortgage holders to stay in their homes.

According to these reports, Bank of America, its lawyers and strategists have spent time and money making sure that they contained the Countrywide operation as a separate entity.  The Bloomberg report notes:

“Countrywide has $11 billion in assets that could be depleted through demands to repurchase defective mortgages,” Jonathan Glionna of Barclays Plc said in an Aug. 31 note. After that, Bank of America may not have any obligation to pay claims from Countrywide’s creditors, he said.

Typically, a corporation that acquires another firm’s assets isn’t liable for the seller’s debts, unless the transaction is considered a de facto merger or there was fraud in the takeover, Robert M. Daines, a Stanford Law School professor, wrote in a legal opinion prepared for BNY Mellon, trustee for the Countrywide mortgage bonds. Daines analyzed whether Bank of America would have to pay bond investors if Countrywide couldn’t.

American International Group Inc. (AIG), the insurer that sued Bank of America last month to recoup more than $10 billion in losses on Countrywide mortgage bonds, argued that the bank is a legal successor to the unit. New York-based AIG cited a series of transactions by Bank of America in 2008 that “were structured in such a way as to leave Countrywide unable to satisfy its massive contingent liabilities.””

Obviously one reason all of the big whoops suing Bank of America from Freddie to Fannie are making sure in any litigation or settlement that BofA is on the hook for Countrywide is their fear that the company will finally jettison this toxic nightmare.  But for poor, working homeowners the problem in getting modifications and preventing foreclosure is that Bank of America clearly has to continue to play pretend and pump up the fake value of Countrywide mortgages that are still on the books at the loan terms rather than the underwater value.

In Phoenix where values have been halved and Arizona Advocates and Actions has been mired in the modification process with Bank of America few if any modification offers make financial sense for homeowners because the bank continues to pretend that houses now worth little more than $100,000 are still holding the $250,000 loan value of the original mortgage.  Restating the mortgage to the actual value would save millions of homeowners.  Unfortunately, injecting reality might bring the whole house of cards down, not just the Countrywide unit, but all of the nation’s largest financial institution, Bank of America.

What a mess!