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Bank of America Kisses Fannie - $10 Billion Illusion

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bank of america by Rueters

photo- Rueters

Bank of America has announced this week its latest act of supposed public sacrifice; it will pay Fannie Mae $3.6 Billion to buy back loans it "sold" to the US government from 2000 to 2008. As B of A pats itself on the back and CEO Brian Moynihan takes a bow to accept the latest banking award for martyrdom, the banks stock shares actually rose to $12.25.

The bank stated that the buy back and acquisition of the loans will result in the spending of approximately $10 billion dollars. But is B of A really kissing Fannie with this deal?

B of As last remarkable and monumental act of suspicious public sacrifice was when it purchased Countrywide Mortgage in 2008. B of A and Countrywide have been entangled in numerous settlements and lawsuits due to questionable mortgage practices, and the dust from the explosion of those documents has still not settled.

In March of 2012, B of A agreed to slash mortgages for 200,000 borrowers, as their part of a $26 Billion dollar settlement with the Attorneys General of 49 states. Other banks involved in that previous settlement were Chase, Wells Fargo, Ally, and Citicorp. At that time, the loans "sold" to Fannie Mae and FHA were not part of the settlement.

However in July of 2012, the bank had previously stated that it had $40 billion tied to faulty loans and foreclosure risk properties, and most of those loans had been unresolved for a lengthy period -- many since 2008.

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In October of 2012, B of A announced it had approved approximately $16 Billion in customer relief programs under the National Mortgage Settlement, which also improved its share gains on the market. Those relief programs included equity relief, principal forgiveness, and interest rate reduction.

The outstanding principal balance for the recently acquired Fannie Mae loans by B of A is stated to be an estimated $300 billion. The bank has also agreed to pay an additional $1.3 billion in compensation for Fannies servicing fees. Bank of America additionally plans to transfer servicing rights to other mortgage servicers this year for about 2 million of those loans. The swapping will continue.

The ping pong game of shuffling hundreds of billions of dollars of faulty loans, and agreements to hundreds of billions in settlements has been staggering. The confusion involving the financial activities of the top 5 banks in the US, has left the average taxpayer in the dark concerning the true condition, and the future effect and outcome of the debacle.

Taking into account that the fed has subsidized Bank of America untold billions of dollars since 2008, the recent settlement by B of A to buy back loans from Fannie Mae seems ludicrous. The transfer of re-swapped loans and bailout money since 2008 appears intentionally confusing, if not deceptive. The real sacrifice is being made by the taxpayers, who bear the task of confronting the impending financial crisis due to the printing of trillions of US dollars used as a crutch.

For B of A, who utilizes its super powers to manipulate, and reinstates its ability to be "too big to fail" and "too big to jail", it's consistently a win-win situation. But there is no Bank that is a hero here; there is only a continued illusion.

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Joey Piscitelli is a 56 year old writer and child abuse victims advocate in the S.F. Bay Area. Joey is also a pagan witch, and a member of Mensa. Joey wrote the non-fiction book "A Witch Wins Justice" concerning his unprecedented jury court victory (more...)
 

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