BOA being sued by USA...

[magley64]

http://finance.yahoo.com/news/u-s--sues-bofa-for--1-billion-over-mortgage-losses-24401588.html

The federal government filed a civil lawsuit against Bank of America Corp. (BAC), alleging the second-biggest U.S. bank by assets saddled taxpayers with losses by misrepresenting the quality of home loans it sold to mortgage-finance firms Fannie Mae (FNMA) and Freddie Mac (FMCC) .

The action, filed Wednesday in federal court in Manhattan, seeks at least $1 billion in damages. The filing represents a novel effort by the government to defray costs tied to the 2008 bailout of Fannie and Freddie, and potentially opens a new front against a banking industry already dealing with hefty legal costs.

[Disclaimer]

$1B compared to the total amount received is a laughable slap in the face to governmental regulations.

[Casper]

$1B?

Drop in the bucket.

[magley64]

it's a start...

[Cheech]

So we don't have to de-fund PBS, since PBS only takes up 450 million in budget revenue with an extra 550 million for debt reduction? I thought debt reduction was a good thing, no?

[Casper]

So we don't have to de-fund PBS, since PBS only takes up 450 million in budget revenue with an extra 550 million for debt reduction? I thought debt reduction was a good thing, no?

Not sure I care that much about PBS. I think I'd rather it go to NASA or education.

[Cheech]

Not sure I care that much about PBS. I think I'd rather it go to NASA or education.

I'm merely remarking on the "ZOMG we have to defund these things to help balance the budget!" and then the collective "meh" when Treasury's about to take in a billion dollars in revenue, which is more than double the amount of the things that the more militant conservatives want to defund to begin with.

I too would like to see NASA get a little bump.

[Casper]

I'm merely remarking on the "ZOMG we have to defund these things to help balance the budget!" and then the collective "meh" when Treasury's about to take in a billion dollars in revenue, which is more than double the amount of the things that the more militant conservatives want to defund to begin with.

I too would like to see NASA get a little bump.

Oh, I didn't care about the PBS thing then either. Kind of a, "meh" thing all the way around.

[jester3681]

Don't you dare ask if they can afford to pay the loan. That's discrimination.

:fastforward:

Hey' date=' how come all of these houses have 3 mortgages and nobody inside has a job? You evil, evil corporation!![/quote']

I wish this weren't true...

[Disclaimer]

Don't you dare ask if they can afford to pay the loan. That's discrimination.

:fastforward:

Hey' date=' how come all of these houses have 3 mortgages and nobody inside has a job? You evil, evil corporation!![/quote']

Verifying income is part of the loan process... regardless of your race, creed, or sex.

Regardless, two wrongs = right??

[jblosser]

Being forced to lower standards in order to meet the CRA guidelines (assuming you ever want to open another branch), and then forcing Fannies Mae and Mac to buy that crap was "all part of the process", too.

Everyone deserves a house, don't they?

[serpentracer]

fucking obama... he can't leave his gov hands out of businesses pockets..

[jester3681]

Verifying income is part of the loan process... regardless of your race, creed, or sex.

Regardless, two wrongs = right??

I think the real issue was with the issues that were going on at the height of the housing boom. People were getting approved for loans regardless of income. A lot of housing companies were using "funny numbers" on the interest rates and buying points on houses to make them appear more affordable. People were getting approved for way more house than they could afford, and to be honest, there were a lot of people not fit to be home owners getting approved for loans as well.

[Disclaimer]

So... who's fault is that for approving them? I guess that's where I stand.

I'm not saying the "homeowners" didn't make bad decisions, but considering the avg. level of intelligence in America is a HS diploma, they aren't exactly fiscal geniuses.

[jester3681]

So... who's fault is that for approving them? I guess that's where I stand.

I'm not saying the "homeowners" didn't make bad decisions, but considering the avg. level of intelligence in America is a HS diploma, they aren't exactly fiscal geniuses.

Agreed. The issue is, at the height of the boom, financiers as well as government oversight entities were turning a blind eye to what was going on. HUD and FHA were given money by the banks to finance these loans that were no good on their face. When it started to collapse, everyone stood there pointing the finger at everyone else. Yes, homeowners were at fault - it was too good to be true, and they should have known it. Yes, banks were at fault - someone making $8/hr flipping burgers at Mac Donald's cannot afford a $175k house. And yes, the government was at fault, because ultimately it was their checks and balances that were modified to let this all transpire, all the while congressmen were smoking cigars and drinking scotch and smiling about how many of their constituents had the "American Dream!" (all rights reserved) of home ownership. Too bad it became a nightmare when they realized that payment was a shitload bigger than they thought and the lease on this apartment is for 30 years. And that $175k house is really only worth $115k and now everyone knows it. So now it's only worth $85k because there are ten more on your street for sale, and now it's only worth $50k since nine of those ten are foreclosed bank sales...

[Disclaimer]

Follow the money... who stood to profit? Banks.

You can fault the gov and the individuals all you want, but that's not how I see it. If the banks didn't think they'd make money doing it, they wouldn't.

[jester3681]

Follow the money... who stood to profit? Banks.

You can fault the gov and the individuals all you want, but that's not how I see it. If the banks didn't think they'd make money doing it, they wouldn't.

Every loan that FHA or HUD subsidizes has a fee that goes back to that bureaucracy. Don't assume that the government acted out of the kindness of their hearts in all this.

And little Jimmy Flips-a-burger gets to live the high life in his sweet new digs until he realizes he's not a Hollywood star and should really be living in the crawlspace above his parents garage. He's not innocent either.

Blame the banks if you insist, and trust me, I'm not saying they're innocent by any means, but they are also not the boogeyman that orchestrated this mess either. Everyone got a little something they wanted.

Banks (The Wealthy) got money, which they wanted.

Jimmy Flips-a-burger (The Unwealthy) got to feel like "The Wealthy," which they wanted.

Government (The Power-hungry) got control over the process, which they wanted.

It all worked out fine until the Ponzi scheme collapsed.

[Casper]

Don't you dare ask if they can afford to pay the loan. That's discrimination.

:fastforward:

Hey' date=' how come all of these houses have 3 mortgages and nobody inside has a job? You evil, evil corporation!![/quote']

http://en.wikipedia.org/wiki/Mortgage_discrimination

In 1993 President Bill Clinton made changes to the Community Reinvestment Act to make mortgages more obtainable for lower and lower-middle class families. The changes ushered in during the Clinton Presidency encouraged banks to make mortgage loans to people who otherwise would not have qualified for them.

This, ladies and gents, was the start of the housing market crash.

[Disclaimer]

You missed quoting the rest of the wiki... in context

While, "Closing the Gap" was not an industry-wide mandate, it illustrates the efforts banks took to meet public pressure to overcome perceived mortgage discrimination. Under the Clinton administration community organizers pressured banks to increase their loans to minorities even though many minority applicants could not qualify for traditional 30-year fix mortgages. Karen Wegmann, the head of Wells Fargo's community development group in 1993 told the New York Times, "The atmosphere now is one of saying yes." [11] The same New York Times article echoed "Closing the Gap," writing, "The banks have also modified some standards for credit approval. Many low-income people do not have credit-bureau files because they do not have credit cards. So lenders are accepting records of continuously paid utility bills as evidence of creditworthiness. Similarly, they will accept steady income from several employers instead of the length of time at one job."

Because of looser loan restrictions many people who could not find themselves qualifying for a mortgage before now could own a home. Under pressure from activist organizations such as ACORN, then President Bill Clinton, and influential Democrats in Congress like Barny Frank,[12], banks began loans to people who should not have qualified for loans. Because banks were pressured to loan to minorities and low income applicants, and because the applicants were low-income who had rented homes for generations the banks could reap profits by selling products loaded with fees because the applicants did not either know, or care to read the fine print that would eventually raise their mortgage payments [13]

Reverse redlining...The phenomenon occurs when a lender or insurer particularly targets minority consumers, not to deny them loans or insurance, but rather to charge them more than would be charged to a similarly situated majority consumer, specifically marketing the most expensive and onerous loan products.

Follow the money.

It should probably also be noted that Mortgage Discrimination was about denying loans based on race, creed, or sex... not income.

Edited October 25, 2012 by JRMMiii

[Casper]

You missed quoting the rest of the wiki... in context

Follow the money.

It should probably also be noted that Mortgage Discrimination was about denying loans based on race, creed, or sex... not income.

Clinton's additions were about income. You can bold type anything you want in there. The fact remains Clinton encouraged the lowering of financial requirements so low income families (regardless of race, creed, sex, etc) could purchase houses which they could not afford.

Under the Clinton administration community organizers pressured banks to increase their loans to minorities even though many minority applicants could not qualify for traditional 30-year fix mortgages.

Because of looser loan restrictions many people who could not find themselves qualifying for a mortgage before now could own a home. Under pressure from activist organizations such as ACORN, then President Bill Clinton, and influential Democrats in Congress like Barny Frank banks began loans to people who should not have qualified for loans.

Minorities willingly entered sub-prime mortgages in far greater numbers than whites and represented a disproportional percentage of foreclosures. The resulting wave of minority foreclosures tipped a fading housing market into a dive and contributed to the economic fall of 2008/2009.

[magley64]

Verifying income is part of the loan process... regardless of your race, creed, or sex.

Regardless, two wrongs = right??

NOW it is... during the late 90's early 00's, the income verification was waived for a bunch of these loans.

[Casper]

NOW it is... during the late 90's early 00's, the income verification was waived for a bunch of these loans.

Income verification was never waived. However, they did allow stated income. This allowed people to lie about how much they made in order to be qualified for loans they shouldn't.

[Disclaimer]

I'd like to know exactly what they were "pressured" to do? Like, "Here, take a hit of this"-pressure? Or, "All the other banks are doing it"-pressure? Or, "the president will personally come in here and sodomize all the women-folk in your family in front of you while he shuts this bank down"-type pressure? The wiki you quote said it wasn't an industry mandate, so no bank was FORCED to do anything.

I encounter pressures and incentives everyday that I can CHOOSE whether or not they'll be beneficial to my financial, social, or professional well-being... but in the end, it's still MY choice.

NOW it is... during the late 90's early 00's, the income verification was waived for a bunch of these loans.

Granted, I'm not a big "got get a loan for 'isht'" guy, but every loan I have ever taken out either required knowledge of my stellar credit history, or verification of my income.

[Casper]

I'd like to know exactly what they were "pressured" to do? Like, "Here, take a hit of this"-pressure? Or, "All the other banks are doing it"-pressure? Or, "the president will personally come in here and sodomize all the women-folk in your family in front of you while he shuts this bank down"-type pressure? The wiki you quote said it wasn't an industry mandate, so no bank was FORCED to do anything.

I encounter pressures and incentives everyday that I can CHOOSE whether or not they'll be beneficial to my financial, social, or professional well-being... but in the end, it's still MY choice.

Granted, I'm not a big "got get a loan for 'isht'" guy, but every loan I have ever taken out either required knowledge of my stellar credit history, or verification of my income.

Reading comprehension fails you.

In 1998 the Federal Bank of Boston issued a report entitled “Closing the Gap: A Guide to Equal Opportunity Lending." The 30 page document was intended to serve as a guide to loan officers to help curb discriminatory lending. "Closing the Gap," instructs banks to hire based upon diversity needs, sweeten the compensation structure for working with lower income applicants, encourages shifting high risk, low income applications to the sub prime market, by saying "the secondary market [subprime Market] is willing to consider ratios above the standard 28/36," and "Lack of credit history should not be seen as a negative factor."

While, "Closing the Gap" was not an industry-wide mandate, it illustrates the efforts banks took to meet public pressure to overcome perceived mortgage discrimination.

The Community Reinvestment Act is what you're trying to debate here, not the report.

[Disclaimer]

The Community Reinvestment Act is what you're trying to debate here, not the report.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act#Regulatory_changes_1995

and...??? Where did Clinton completely wreck it?

It's also funny to me that Clinton is to blame for crashing the housing market based on something he did MORE THAN a decade ago. Like, all of a sudden in the 13th year of your mortgage you just can't afford it.... the first twelve years, we're all good, but that 13th... gosh, just took them and so many others' down too.

Where do I find one of these 13yr ARMs?