Tuesday, February 15, 2011

BofA reaches settlement with Fannie Mae, Freddie Mac

NOTE: So settlements to government and the home owner gets the shaft once again. When are they going to address those wrongfully targetted for toxic loans, fraudulent foreclosure and fix the problem. Sure, - protect the banks from angry consumers; but profit from it - if you are government???? What is wrong with this picture?

BofA reaches settlement with Fannie Mae, Freddie Mac: "The claims stem from mortgages sold to Fannie and Freddie by former mortgage giant Countrywide Financial, which Bank of America bought in 2008. The two government-backed agencies buy mortgages from lenders and resell them to investors. They want banks to buy back mortgages that had incorrect information about the income and other qualifications of borrowers.
During the housing boom, lenders such as Countrywide routinely gave mortgages to people who ultimately couldn't afford them. This lit the fuse for the financial meltdown in 2008. Most of the mortgages that Fannie and Freddie want to sell back to the banks are in default.
By removing this as an issue, Bank of America CEO Brian Moynihan hopes investors will buy his message of focusing on customers and building its traditional banking business. But Bank of America has several big challenges remaining, including lawsuits from other investors who are trying to recoup losses.
There are also questions related to Monday's deal. The settlement contained two parts: Bank of America paid $1.3 billion in cash to Freddie Mac. In turn, Freddie Mac won't force Bank of America to buy back the faulty mortgages. In the second par"

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