There’s always something to howl about

A new year and the looting of the American people continues unabated.

BofA Settles GSE Buyback Requests for Pennies on the Dollar

According to this MND article, Obama appointee, FHFA acting director Edward DeMarco just handed Ally bank, formerly GMAC Bank and Bank of America potentially a total $300 billion windfall. Freddie Mac and Fannie Mae, wholly owned subsidiaries of the US Treasury Dept. are foregoing the opportunity to put hundreds of billions worth of  mortgage backed securities  back to these banks in return for $3 billion cash which, no doubt came from the TARP and shadow earnings as a result of regulatory forbearance. The mortgage backed securities have a refund clause by which the originator is obligated to repurchase the securities if there were specific deficiencies in the origination of the underlying mortgages. As we saw in “foreclosuregate”, even the chain of title for some of these securities is defective. I think we can safely assume that there is probably more than $3 billion of refunds to be had with aggressive defense of the taxpayers’ interests.  Why does this matter?  Bonuses, baby.  Every dime coughed up by Ally or Bank of America reduces profits which shrinks the bankster bonus pool.  Apparently the Administration cannot stand the idea of those nice banksters riding in last year’s Maybach.  Especially after they made all those generous campaign  donations.

Maybach Laundalet

Wells Fargo, CitiBank and Chase have yet to cut their pennies on the dollar deals with Mr. DeMarco.  As the article points out, there are many purchasers of these same mortgage backed securities such as public and private pension funds and insurance companies who will probably go to the mat for a lot more than a couple pennies on the dollar.  The pension trustees and the insurance companies have a fiduciary duty to recover as much as possible for their beneficiaries.  It is a trillion dollar shame  that the administration doesn’t take its obligation to the taxpayer as seriously.  It will be interesting to see if there will be any Congressional oversight forthcoming in the new Congress regarding the Obama Administration’s magnanimous gift to the banksters.

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    6 Comments so far

    1. [...] This post was mentioned on Twitter by Real Estate Feeds and others. Real Estate Feeds said: A new year and the looting of the American people continues unabated.: BofA Settles GSE Buyback Requests for Pen… [...]

    2. michael Urbanski January 4th, 2011 12:30 pm

      This is why my New Years resolution is to stop watching the nightly news for a month. I am guessing that in the 30 days off the news cycle I will not have missed anything.
      Am I alone on this?

    3. TJ Harris January 4th, 2011 1:00 pm

      Unbelievable, no what am I saying. . duh of course it’s believable. What do they think we are all idiots. It’s so frustrating because no one seems to be able to stop these kind of back door deals. We are just left to read about it after the fact

    4. Jim Klein January 4th, 2011 2:09 pm

      >Congressional oversight

      LOL…good one! I’ve got two words for that, “Fox. Hen.”

      Thanks for this tidbit, Tom. Too bad it would take about a million posts to cover all the like instances, large and small. My thing is philosophy and at least I finally understand what fundamental principle is guiding most everyone these days, especially those in charge of matters such as you write about here. Naturally it’s epistemic and naturally it’s awfully simple: “Maybe logic doesn’t hold.” We all learned that in college—Intro to Philosophy, I think it was called.

      It’s common to respond to a solipsist or subjectivist with something like, “Step in front of a speeding Mack Truck and see if there’s any objective reality.” So all the talking heads are rambling about the light at the end of the tunnel; I wonder when they’ll wake up and notice that it’s an oncoming train!

      My much bigger concern is, “When will Joe Doe?” Thanks again for the info; it’s a rich example indeed.

    5. Robert Worthington January 4th, 2011 6:53 pm

      Michael, I love you comment. Seems like everytime I turn on the news, people killed, the economy is horrible, and obama administration spent more money. Grrrr.

    6. Craig Bosse January 11th, 2011 11:10 pm

      I can’t stand hearing about things like this knowing that the common man in the one footing the bill!