We've had a look at the latest lawsuit aiming to geld Countrywide. This latest backhand seeks an order compelling Countrywide to purchase at par every mortgage loan that went into a rather large group of securitization vehicles and modify some 50,000 loans before April of 2009.
Using a figure of $200,000 in unpaid principal per loan as an average, and figuring that 400,000 loans will eventually modified, plaintiffs calculate that Bank of America might find itself on the hook for $80 billion (before any intervention).
Countrywide Class Action Complaint.pdf
Posted by guest , Dec 01, 2008 4:45PM
So $80 bil to make the banks whole, but the homeowners themselves get $0 in aid? Explain how this helps Main Street rather than Wall Street?
Posted by guest , Dec 01, 2008 4:47PM
It teaches main street that they need to work for wall street.
Posted by guest , Dec 01, 2008 4:48PM
Dear Ken Lewis,
Why would buy a company with this potential overhang?
Thanks
John Q Shareholder
Posted by guest , Dec 01, 2008 4:49PM
too legal, didn't read.
Posted by guest , Dec 01, 2008 4:52PM
Hello, I'm Countrywide!.......Fuck off!!
Posted by guest , Dec 01, 2008 4:56PM
@3...Too big to fail
Posted by Anal_yst , Dec 01, 2008 5:01PM
@1
$80 bil would be for investors who were too lazy to do their own diligence (most likely relied on S&P/Moody's). Honestly in a perfect world they'd get to pay for their lethargy and fiduciary irresponsibility, but I'm sure they'll get some recourse (mostly wrongly).
Also, as goes Wall Street, so goes Main Street. If Wall Street burns (slash is burning) so goes Main Street. I went into Best Buy this weekend and got a nice new Macbook with a nifty little 18-month no-interest loan from HSBC, despite being able to pay cash, it'd be stupid for me not to take advantage of free OPM. On the contrary, many buyers of the various toys Best Buy (or whichever store) sells can't pay cash for their purchases and rely on credit to live above their means. If, to again use your overgeneralization, "Wall Street" goes down, this credit will completely dry up, hence people can't live above their means, hence the retailer can't sell as much, hence they lay off workers who then themselves can't buy as much...
...and so you see, the reason "Wall Street" is getting $ is because it is the cornerstone of our modern economy. Unless you want to go back to a system where you offer your skills (if any) in exchange for that new plasma screen TV, you're gonna have to accept that.
Otherwise, I hear Zimbabwe is nice around this time of year.
Posted by guest , Dec 01, 2008 5:02PM
This is going to drag on for awhile then appealate courts then in 30 years it will be all fixed.
Posted by guest , Dec 01, 2008 5:08PM
Ken Lewis said on 60 minutes that the thought of being fired had never crossed his mind.
What world is he living in?
Posted by guest , Dec 01, 2008 5:13PM
Last I checked BAC hasn't consolidated CFC or guaranteed any debt/liabilities.
Posted by guest , Dec 01, 2008 5:19PM
@7- Well played sir, well played.
Posted by Investorcluzo , Dec 01, 2008 5:24PM
why do people insist on frivolous lawsuits? do they really think bofa would pay the nearly $80 billion that is being suggested? c'mon, this screams ambulance chaser. not to mention, bofa could let countrywide go bk before losing anything close to that sum (they ring fenced this one pretty good). remember, they paid $5 billion for the whole and people argued that it was too much/little (depending on who's shares you owned). to add insult to injury, kenny boy is getting an award from the bankers' association for this deal on wednesday...great. perhaps he should stay off the tv shows and get back to work – comparing bac price performance to c is not a redeeming quality.
Posted by guest , Dec 01, 2008 5:36PM
When the comments section includes Main St vs Wall St you know this website jumped the shark. Where have all the analysts gone?
@10 - I thought BAC took on $16 bln of CFC debt.
Posted by guest , Dec 01, 2008 7:25PM
@13
"Where have all the analysts gone?"
They are looking for work.
Posted by guest , Dec 01, 2008 9:37PM
We are now called "unemployed bloggers" - the term "analyst" is pre-bubble thinking.
http://tinyurl.com/6jldft
"And that means we lose to the market by, you know, over a half a trillion dollars, year after year after year. And investors have to know about that, because it speaks to a real flaw in our system, where the financial system is consuming an excessive share of the economy’s resources…it turns out the financial sector subtracts value from society."
Posted by guest , Dec 02, 2008 10:01AM
@ 15, Memo from the department of "DUhhhh"
Since when did finance ever "add value" to anything other than the kind of speculative "bubble" value which has destroyed trillions in "real" savings.
Finance adds value like Used Car Salesmen "add value." They just do it in fancier suits.