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More Bad News For Moynihan: Arizona Sues BofA For "Consistently Misleading Consumers" About Home Loan Mod Process

Tyler Durden's picture




 

At this point it appears Bank of America can't wait for the alleged Assange secret fraud trove to finally be released and put the bank out of its misery: not a week passes without someone suing the bank for gross mortgage fraud. One would almost think that if we had a functioning legal system in which perpetrators of crime, instead of those protesting it, were arrested that BofA may actually be a sell on the f#&^@!g dip. The latest reason why the best job in the world these days is to be BofA's outside counsel, is that as Reuters just reported, Arizona has sued the bank as a result of the latter "consistently misleading consumers about its home loan modification process." Perhaps a greater crime is BofA's consistently misleading the SEC into settling every single case of multi-billion bonus dispersal at or about the time the banks receives a $15 billion taxpayer funded TARP bailout. And while this latest case will also be settled promptly and quietly, to not give some other plaintiffs the idea that such a thing as equitable compensation exists, in the meantime the actual damages sought by Arizona AG Terry Goddard is $25,000 per violation. Ball park estimate of 500,000 of those countrywide (not just Arizona) , and there goes the firm's Christmas Bonus.

From Reuters:

The state of Arizona has sued Bank of America Corp <BAC.N>, alleging that the bank has consistently misled consumers about its home loan modification process, a source familiar with the situation said.

The lawsuit, filed on Friday by Arizona Attorney General Terry Goddard, accuses Bank of America of violating the state's consumer fraud act, according to a draft copy of the lawsuit obtained by Reuters.

The state also says Bank of America violated a consent judgment over its loan servicing, and is seeking a $25,000 penalty per violation, according to the lawsuit.

 

 

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Fri, 12/17/2010 - 14:04 | 813340 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

So they give the TARP/STIMULOUS/QE Light/QE2 monie back now or what?

Fri, 12/17/2010 - 17:03 | 813874 Problem Is
Problem Is's picture

Funny... I just blew white powder from my donette all over the key board...

Fri, 12/17/2010 - 14:04 | 813346 Bearster
Bearster's picture

I certainly agree with the sentiment: our system today enables and protects a wholesale lotting of the productive sector.

But lawsuits by a state against a private company for alleged wrongdoing??

Sheesh, this is up there with policy by leak and innuendo!  What happened to the good old days of jurisprudence when you had to have standing in order to sue?

If BAC did something wrong, then the government should press CRIMINAL CHARGES.  Not sue, that is at best craven and at worst horrible policy, horrible precedent, and in any case makes for a perfectly lousy environment for growing or starting a new business (we all want someone, somewhere, somehow to add jobs, right??)

Fri, 12/17/2010 - 14:33 | 813442 jmc8888
jmc8888's picture

ROFL, it isn't perfect, so let's take our toys and go home.

Are conservatives that think in such zero sum ways really this stupid?

Yes they should go after them criminally.  Yes they are pussies for not.

But the ideal way, is to go after them BOTH ways.

1 out of 2, isn't good.  But it is better than nothing.

Terry "I lost to a fascist, dumb fuck drunken whore- Jan Brewer" Goddard, still doing at least something for the people, even though he lost the governorship race.  Jan? Too busy being conservative whacko and instituting death panels, while giving money to her private prison supporters.  Every AZ that voted for that fascist whore in a perfect world would decide not to vote anymore in fears of contaminating America with their dumbassness.  You can't be serious about the United States, and vote for Jan Brewer.  It's like voting for Palin, or Bachman, or some other idiot fascist.  Like Rand Paul.

Now back to this, it's pretty fucking stupid, to want the banksters to pay for what they did, and here is a guy doing it, but 'he's doing it wrong', so he shouldn't do it. Or the laws should change so he couldn't do it?  That's asinine.

It's like a f-1 driver saying, well I didn't put on the seatbelt the first lap, why start now?

It isn't perfect, it isn't ideal.  Criminal cases would be much more poignant.  But this is still something.

Republicans need to learn many times in this world, it's shades of grey.  Many times in this world it's not either/or it's BOTH.  This is a case of BOTH.  You need both types of suits.  1 isn't 2, but 1 also isn't 0.  I mean with sophistry being more important than the right thing as mentioned by our most likely conservative friend above, I can see how regulation, or lack there of certainly could never of happened. 

So awesome he's doing one.

Shitty he's not doing the other.

 

Fri, 12/17/2010 - 14:06 | 813351 Careless Whisper
Careless Whisper's picture

it's just one fraud after another with these banks.

Fri, 12/17/2010 - 14:15 | 813385 Widowmaker
Widowmaker's picture

Its fraud from top to bottom in their executive leadership and through systemic corruption being bailed out by the Federal Reserve racket.

END THE FED and PROSECUTE THE CRIMINALS!

Fri, 12/17/2010 - 16:16 | 813753 Drag Racer
Drag Racer's picture

speaking of fraud. I came acros this blog and she had some good info.

http://parallelforeclosure.blogspot.com/

Fri, 12/17/2010 - 16:55 | 813856 caconhma
caconhma's picture

Banks just own the country. The rest is just a side-show.

Fri, 12/17/2010 - 14:07 | 813352 astartes09
astartes09's picture

Why should they mod the loans when the payout on the PMI is so ridiculously more valuable?

 

BofA (countrywide) takes a loan out on a house in 2004 worth $500,000.  Includes private mortgage insurance in the loan.

 

Owner defaults.  House value drops to 300k.

 

BofA forecloses on house, evicts former owner.

 

Changes locks, submits insurance payout request to HUD.

 

HUD approves 100% of payout amount to BofA.

 

BofA sells REO on market for $200,000 claiming its a steal at this price.

 

BofA loss on Loan: $500,000 minus a few years of payments at variable interest rates.

 

BofA gain on loan:  $500,000 PMI payout + $200,000 resale price.

If you think BofA has any legit reason to modify ANY of its loans, you are crazy.  They are making a killing right now, and no one has a clue about it.

Someone needs to find out who Countrywide's original PMI provider was.  I almost guarantee it goes back to AIG.

 

Fri, 12/17/2010 - 14:35 | 813477 dussasr
dussasr's picture

Astartes, I think you are misinformed on how PMI works.  PMI only covers the first 20% (sometimes 30%) of the loss.  The lender is responsible for losses greater than that so it's not like the bank is making money on these foreclosures. 

Also, many of the Countrywide loans that BofA is foreclosing on are non-conforming loans that have no PMI.

Fri, 12/17/2010 - 15:31 | 813633 TheProphet
TheProphet's picture

And, you can count on the truly conforming loans not having PMI at all (any loan with 80% or less LTV at origination; basically anyone who put down 20% on a fixed loan or an ARM that hasn't yet reset).

Fri, 12/17/2010 - 15:46 | 813668 -Michelle-
-Michelle-'s picture

Don't forget the 80/20 loans that were used to circumvent PMI.

Fri, 12/17/2010 - 14:07 | 813354 velobabe
velobabe's picture

suing does seem like a joke, under these circumstance. let's press

CRIMINAL CHARGES, b i t c h

 

Fri, 12/17/2010 - 14:09 | 813358 Cdad
Cdad's picture

More Bad News For Moynihan: Arizona Sues BofA For "Consistently Misleading Consumers" About Home Loan Mod Process

OK, as a reminder, the drill is to figure out how to turn this headline into a stimulus package for the Roach Motel [SPY] or for BAC which should probably be referred to always now as Blight Upon America...or BUA.

 

Hmmmmm?  Thinking.....

 

 

Fri, 12/17/2010 - 14:09 | 813360 aint no fortuna...
aint no fortunate son's picture

Aren't they PD's? That should take care of the XMAS bonuses.

Fri, 12/17/2010 - 14:13 | 813379 Fearless Rick
Fearless Rick's picture

"equitable compensation" now there's a fun term.

How about this:

Google, "Bank of America sued"

About 708,000 results

X rough estimate $200,000 per unit = $141,600,000,000.

They have that in petty cash, don't they?


Fri, 12/17/2010 - 14:22 | 813409 66Sexy
66Sexy's picture

for christs sake, die already... "doing gods work" would be to pull the plug on this piece of shit.. and america's pain dies with it

Fri, 12/17/2010 - 14:24 | 813433 Dick Darlington
Dick Darlington's picture

Nowdays every time i hear someone mentioning BofA I start hearing Iron Maiden's "Afraid to shoot strangers" in my head. Great guitar in that song btw.

Fri, 12/17/2010 - 14:28 | 813448 damnitalready
damnitalready's picture

and there goes the firm's Christmas Bonus

maybe the underlings, but the big pigs at the top will still get theirs, guaranteed.

Fri, 12/17/2010 - 14:35 | 813482 Kyron95131
Kyron95131's picture

if they pull this lawsuit off, i would expect nevada to file against them next

they are in even worse shape

Sat, 12/18/2010 - 04:06 | 815214 OldPhart
OldPhart's picture

Nevada did, just afterwards, for the same charges.

Fri, 12/17/2010 - 14:49 | 813518 Barb Dwire
Barb Dwire's picture

And BAC is up again today after the news. Still, I'm pretty sure my March puts will pay off nicely. C'mon Wikileaks!!!

Fri, 12/17/2010 - 15:04 | 813553 Kaiser Sousa
Kaiser Sousa's picture

fucking bankers...bullets for all of them...

i aint paying another fucking cent to those mother fuckers...if everyone did the same the shit would end TODAY.....

Fri, 12/17/2010 - 17:31 | 813965 iDealMeat
iDealMeat's picture

If you have any business with BofA in terms of a CC or line of Credit, run it up and file BK.

Best to do it strategically when you don't need to, then doing it desperately when you do..

It's all just paper work anyway..  bfd..

Then buy $ 599 worth on PMs / mo and put the rest in your community bank.

Fri, 12/17/2010 - 15:17 | 813588 curbyourrisk
curbyourrisk's picture

Burn baby....BURN!!!

Fri, 12/17/2010 - 15:26 | 813614 Prof Gulliver
Prof Gulliver's picture

Big nothing, unfortunately. That suit was filed by AZ's outgoing AG, a Dem. The new AG, a Repub., will soon get a call from the Bernank.

Fri, 12/17/2010 - 16:12 | 813646 Technichel
Technichel's picture

.

Fri, 12/17/2010 - 15:49 | 813675 Tic tock
Tic tock's picture

Primary dealer Outside Counsel (whatever that is) = Freddy Krueger.

also, how do 90% gun ownership..and all those wierd patriot hicks...not manage to end up blowing the swwet fuck out of 'any' nightmare bank!? WTF was the point of shaving their heads and buing an open-top jeep if when the SHTF -for two years mind- ...whta, did they decide to retrain as lawyers?

Rest of the world burns their capitols over two years extension to the working age, Americans lose their houses and their jobs, the government robs them fucking blind and say nothing!...these are the same soldiers who will kill a hundred thousand (iraqis) for no reason whatsoever!..you so don't deserve to have Paris Hilton.   

Fri, 12/17/2010 - 15:56 | 813697 MakeMineADouble
MakeMineADouble's picture

+1  +you funny lol

Fri, 12/17/2010 - 16:47 | 813796 flattrader
flattrader's picture

I understand your confusion.

Following the Enron implosion, I often wondered how/why Ken Lay could walk the streets with impunity.  Jeezus, everyone and their dog is armend in Texas!

The guy died of a heart attack while on vacation in Colorado awaiting sentencing.

Given the careers, portfolios, families and lives he destroyed the only thing I can assume is that Texans are pussies.

And you're right.  We don't deserve Paris Hilton.

Please come take her off our hands ASAP.

Fri, 12/17/2010 - 16:51 | 813845 caconhma
caconhma's picture

The state of Arizona is just trying to raise some revenues by milking banks.

Bank of America Corp has nothing to worry. The FED and Congress will protect and bail them out.

Fri, 12/17/2010 - 17:59 | 814040 gwar5
gwar5's picture

I can't wait for the BAC Wikileak. Unleash the hounds already.

Fri, 12/17/2010 - 18:21 | 814086 Monday1929
Monday1929's picture

It will rally after the Wiki release as the "uncertainty" is removed. Because Wall Street hates uncertainty. It will rally before the wiki release in anticipation of the removal of uncertainty following the release. In other words, it will rally and my Feb Puts will expire worthless.

It will rally if the Wiki release reveals that BAC execs cooked and ate babies in the executive dining room, because at least the worst of the news is now behind us. Wall Street likes to look ahead, not behind. Wall Street hates uncertainty.

Fri, 12/17/2010 - 19:30 | 814240 Tic tock
Tic tock's picture

It's pretty basic - when you know's screwing you over, you get even... how do you guys figure on being able to cope with colonizing the stars if you can't even sort out a group of suits?

Fri, 12/17/2010 - 19:31 | 814241 greenewave
greenewave's picture

Screw suing the bastards..get the guillotine out!!

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