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BANK OF AMERICA MAY BE FALLING

Posted by on Aug 5, 2012 in Blog | 2,912 comments

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GIVE A MAN A GUN AND HE CAN ROB A BANK- GIVE A MAN A BANK AND HE COULD ROB THE WORLD
BANK OF AMERICA IS HAVING PROBLEMS
UPDATE- AUGUST 31, 2012- Bank of America asked a federal court to dismiss a lawsuit filed against the banking giant by investors who claim BofA failed to disclose litigation risks stemming from AIG‘s  purchase of mortgage-backed securities prior to the subprime meltdown.
Investors in the suit allege BofA — which acquired mortgage exposures tied to Countrywide and Merrill Lynch — failed to disclose to its shareholders the possibility that AIG would file a major lawsuit over mortgage-backed securities sold to the insurer by firms now linked to Bank of America.
AIG filed the suit on Aug. 8.
In it, BofA shareholders claim BofA misled its investors by not disclosing that the bank owes AIG as much as $10 billion.
BofA is pushing back against the shareholder suit, claiming in court filings that public information was already available on the mortgage litigation risks facing BofA.
“The securities filings of the major issuers of MBS, including BofA, Countrywide, and Merrill Lynch, had made the volume of MBS they had issued a matter of public record,” BofA noted in its motion to dismiss with the U.S. District Court, Southern District of New York.
“As a result, the universe of MBS that might result in potential exposure for BofA was already in the public domain prior to the class period.”
Bank of America also noted in its motion to dismiss that news agencies, including The New York Times, published articles as far back as April on BofA’s exposure to potential litigation from AIG through its acquisitions of Countrywide and Merrill Lynch
UPDATE-AUGUST 26, 2012- Florida- I just wanted to provide all of you with an update. Many things have happened since I filed my original complaint in December 2010 against Bank of America. As time went by, the fraud became more and more noticeable and other evidence surfaced especially after I had a forensic audit done on my mortgage a few months ago. Less than a month ago, another fraudulent act surfaced. I noticed that Erla Carter-Shaw was the endorser on my Note and she signed as Vice President for Taylor, Bean and Whitaker. I decided to investigate her signature and to my astonishment, I found different signatures for the “so-called” TB&W Vice President who endorsed my Note. In addition to this discovery, I also found Assignments of Mortgage in which Erla Carter-Shaw has signed as MERS Vice President. F-R-A-U-D!!!! These documents are filed in county records and it not only fraud against me but fraud against the court.

In light of the many revelations of fraud throughtout our mortgage origination, securitization and servicing, we have been working on a “new” lawsuit against Bank of America, TB&W and MERS. We have now filed this new lawsuit in state court on August 15th. Bank of America and MERS have already been served. I have added these new defendants (TB&W and MERS) because they are a big part of the fraud committed against us. I have added new counts against Bank of America as well. My Federal lawsuit is still pending and we have just submitted our Joint Pretrial Statement. BofA’s attorneys are actually surprised at how long our lawsuit has taken. Bank of America filed a Motion for Summary Judgment almost 2 months ago and there has not been any recent orders by the judge. Of coarse, if our federal case gets dismissed, we will appeal it. Yes, Bank of America will have to deal with not one but two lawsuits from us
UPDATE-JULY 16, 2012-NEW YORK (Reuters) – Bank of America Corp agreed to settle a lawsuit alleging that its unit Countrywide Financial fraudulently misrepresented mortgage-backed securities insured by Syncora Guarantee, sources close to the settlement said.

The terms of the settlement were not immediately available.

In a filing in state court in New York on Tuesday, Syncora Guarantee, a unit of Syncora Holdings Ltd , said it had agreed to discontinue the lawsuit.

Syncora was among bond insurers, including MBIA Inc , that sued Bank of America over representations made by Countrywide, a mortgage lender bought by Bank of America in 2008.

Syncora Guarantee sued Countrywide and Bank of America in 2009 to recover losses on billions of dollars of home loans made by Countrywide. Syncora claimed it was duped into insuring the mortgage-backed securities, saying Countrywide misrepresented the underlying mortgages.
“Countrywide, consistent with its business practices at the time, systematically ignored its own underwriting guidelines and made imprudent loans that no reasonable underwriter would have made,” Syncora said in its complaint.
Donald Hawthorne, an attorney for Syncora, declined to comment on the filing. Jonathan Rosenberg, an attorney for Bank of America, did not immediately return a call for comment.

The case is Syncora Guarantee Inc. v Countrywide Home Loans Inc., New York state Supreme Court, New York County, No. 650042/2009.

UPDATE-MAY 15, 2012- (Reuters) – MBIA Inc claimed it has new evidence of “widespread mortgage-origination fraud” at Bank of America Corp’s Countrywide unit, hoping to bolster its $1.4 billion lawsuit accusing that unit of fraudulently inducing it to insure risky mortgage-backed securities.
The insurer made its claim in a letter on Wednesday sent to New York State Supreme Court Justice Eileen Bransten seeking to force Countrywide to turn over a variety of documents.
Countrywide replied on Thursday that MBIA’s request was part of the insurer’s strategy to “pre-try” the case “based on nothing more than hyperbolic rhetoric and falsehoods.”
The battle over evidence intensifies litigation in which MBIA accused Countrywide of misrepresenting the quality of underwriting for about 368,000 loans backing 15 financings it insured between 2005 and 2007.
MBIA said it would not have provided the insurance had it known how the loans were underwritten.
In the February 15 letter, MBIA asked for “many” documents that “relate to recently-uncovered evidence of widespread mortgage-origination fraud at Countrywide. Countrywide appears determined to withhold this evidence from MBIA despite its clear relevance to several of MBIA’s claims.”
The request came after Countrywide produced what MBIA called an “incomplete” set of loan records backing MBIA-insured securities from a Countrywide fraud-tracking database, known as FACTS, that was “not previously known to exist” to the insurer.
In their response, lawyers for Countrywide said their client was “surprised” at MBIA’s request and had “promptly and voluntarily produced all records contained in the FACTS database” used by its fraud risk managers concerning the loans.
Separately, Bank of America on February 15 asked Bransten to block MBIA’s request to depose its chief executive, Brian Moynihan.
“A chief executive officer of a major corporation may only be deposed when he has unique information that is not available through other means,” Bank of America spokesman Lawrence Grayson said in an email. “The discovery process remains fully available to MBIA, including through the numerous current and former executives that MBIA will be deposing.”
As to the alleged new evidence of mortgage origination fraud, Grayson referred to the letter by Countrywide lawyers. An MBIA spokesman declined to comment.
MBIA’s prospects in the case brightened last month when Bransten ruled that to establish fraud, MBIA need only show Countrywide misled it about the $20 billion of securities it insured, not that such misleading caused its losses
UPDATE APRIL 23, 2012-Bank Of America After Earnings: What Happened?
After showing positive earnings along with the other major banks, what happened to Bank of America (BAC)? Here we have a large bank stock that possibly could double in value in a few years with a strong dividend building. Banks, after a period of intense scrutiny by the U.S. government, have never been more transparent. Common sense would tell the average investor activities such as the stress test and the overly ambitious Dodd-Frank have created an arguably overly capitalized banking sector, as opposed to the hideously leveraged monster that existed pre-Lehman.
JP Morgan, Morgan Stanley (MS), US Bancorp (UBS), Goldman Sachs (GS), and Capital One Financial (COF) have beaten EPS estimates by sizable margins, the post-earnings valuation multiples stand to be even more attractive.
However, CLSA analyst Mike Mayo downgraded his rating for BAC to a “Sell” from “Underperform” with an $8 price target. His position is that the bank’s first quarter report is going to be as good as it gets for the year. It is true Bank of America reported adjusted earnings of 31 cents a share last Thursday morning, besting the Street’s estimate of 11 cents a share by a significant margin. It joined JP Morgan, Morgan Stanley (MS), US Bancorp (UBS), Goldman Sachs (GS) and Capital One Financial (COF) by beating EPS estimates by sizable margins. However, Mr. Mayo believes the stock is expensive and does not believe it can reduce long term expenses anymore without hurting the company. Expenses have dropped 5.6% since the fourth quarter of 2011, but it isn’t enough. And projecting the company’s profits in 2013 will not be near what is expected of a company with (Bank of America + Merrill Lynch).
One of the key elements of this negative report is the Bank’s Valuation Adjustment. A major part of Bank of America’s accounting practices (and a regular for most banks) is the mention of the “Negative Valuation Adjustments of $4.8 Billion Pretax.”
This means the bank took a $4.8 billion hit from an accounting adjustment. If a bank’s debt securities are losing value, this means its liabilities (the amount it owes) are not worth anything. This is good for accounting. It can be put on the income statement as a gain. Some of the banks debt securities in the first quarter gained in value, which means those liabilities increased in value and produced a loss of $4.8 billion in earnings.
How does falling debt prices (a sign that investors do not trust the bank’s credit) lead to a gain in profit? Are we supposed to ignore the loss when calculating core earnings? Its long term debt rose to 2.99% the first quarter of this year, up from 2.8% the last quarter of 2011. It appears debt markets may not like Bank of America after all.
UPDATE- APRIL 12, 2012- Bank of America CEO Moynihan must testify in MBIA lawsuit: judge

REUTERS — 10:01 PM ET 04/12/12- NEW YORK (Reuters) – A New York judge has ruled that Bank of America CEO Brian Moynihan must testify in a lawsuit brought by bond insurer MBIA Inc.which claims the bank fraudulently induced it to insure risky mortgage-backed securities.

The judge said Moynihan could provide relevant testimony in the case due to his position as CEO, former president of investment banking and the fact that he oversaw the process of integrating Countrywide into Bank of America.
Bank of America acquired mortgage lender Countrywide in July 2008. MBIA filed a Countrywide later that year. In 2009, MBIA claimed Bank of America was liable for Countrywide’s conduct.
Bank of America, the second-largest U.S. bank by assets, is fighting several legal cases following the global financial crisis and had sought to block MBIA efforts for Moynihan to give evidence.
MBIA was once the largest U.S. municipal bond insurer. It announced a restructuring in 2009 after incurring large losses insuring mortgage debt.
Bank of America had asked New York Supreme Court Justice Eileen Bransten to rule that Moynihan did not need to testify, arguing that MBIA was seeking his deposition only to harass the bank and that Moynihan had no unique knowledge about the case.
But the judge on Wednesday denied the request, according to court papers made public on Thursday.
“The knowledge Moynihan gained as part of the (Countrywide) Steering Committee is unique, and it is material and necessary to MBIA’s successor liability claim,” the judge said.
Moynihan was involved in “high-level decisions regarding the Countrywide transaction” and his testimony will not duplicate that of lower-level employees, she said.
MBIA declined to comment and Bank of America did not immediately respond to requests for comment.
The cases is MBIA Insurance Corp v. Countrywide Home Loans Inc et al, New York State Supreme Court, New York County, No. 602825/2008.
BANK OF AMERICA WON’T ACCEPT CASH PAYMENTS FOR MORTGAGE SEE VIDEO AT http://www.youtube.com/watch?v=5FPAYqU5Pj0
MARCH 7, 2012- Whistleblower says BofA defrauded HAMP
Bank of America NA prevented homeowners from receiving mortgage-loan modifications under a federal program in order to avoid millions of dollars in losses while benefitting from financial incentives for participating in the program, according to a complaint unsealed in federal court Wednesday.
The suit is the second whistleblower complaint unsealed so far with apparent ties to the $1 billion False Claims Act settlement announced by Bank of America and the U.S. Attorney’s Office for the Eastern District of New York on February 9.
The Bank of America settlement is also part of the sweeping $25 billion agreement reached between state and federal authorities.
Final settlement documents have yet to be filed in the BoA settlement, which the U.S. Attorney’s Office said was the largest ever False Claims Act payout related to mortgage fraud.
The settlement resolved claims that Bank of America’s Countywide Financial subsidiaries defrauded the Federal Housing Administration by inflating appraisals used for government-insured home loans, as well as claims involving the Home Affordable Modification Program, a federal program to help American homeowners facing foreclosure.
The complaint unsealed Wednesday was filed by whistleblower Gregory Mackler, a Colorado resident who said he worked alongside Bank of America executives while an employee at Urban Lending Solutions, a company to which Bank of America contracted some of its HAMP work
While working at Urban Lending, Mackler said he saw BofA and its loan servicing subsidiary, BAC Homes Loans Servicing LP, implement “business practices designed to intentionally prevent scores of eligible homeowners from becoming eligible or staying eligible for permanent HAMP modification.”
The bank and its agents routinely pretended to have lost homeowners’ documents, failed to credit payments during trial modifications and intentionally misled homeowners about their eligibility for the program, the complaint alleged.
BoA let through just enough HAMP modifications to avert suspicion and allay congressional critics, while not enough to incur any substantial losses to its own bottom line, according to the complaint.
“In other words, BoA has had it both ways. BoA has continued to maximize the value of its mortgage portfolio with anti-HAMP modification practices and managed to make money by committing fraud on homeowner,” the lawsuit said.