Who Wants To Sue Bank Of America?

Author:: Bess Levin
Updated:: Jan 14, 2019
Original:: Oct 19, 2010

So far those on Team "I'm here for the gang bang" include PIMCO, BlackRock, MetLife, TCW Group and the NY Fed but there is always room for one more. Surely someone else out there is feeling incensed about some stuff that went down at Countrywide and is looking to take action.

In related news, I know this must seem like bad news for Bank of America and maybe it is. But let's focus on the positive-- it's great news for someone and that someone is [drum-roll please]...ANGELO MOZILO, PROVEN ORACLE! For those whose memories don't go back further than last night, recall that on June 26, 2008, His Orangeness had this to say at the last CFC shareholder meeting:

Bank of America “will reap the benefits of what we have sowed.”

I.e. the greatest veiled threat ever, and the short version of: "Those suckers don’t even have a clue what they’re in for. Seriously, the long-term effects, merely taking lawsuits into account, will be not unlike having a scalding hot poker violently inserted where the sun don’t shine. [pauses for effect] They might as well have bought an asbestos company. In fact? Probably would’ve been better off doing so. Honestly, though, this deal is like getting a very expensive answer to the question, ‘what does it feel like to be ass-raped for an eternity?’ [shakes head at the thought, stiles laughter].

So he's got to be feeling prettay prettay prettay good right now.

NY Fed Part of Group Suing BofA Over Mortgage Securities [CNBC]

August was kind of rough for Bank of America on the legal front, to the point that we once said in Write-Offs "Everybody who hadn’t yet sued BofA did today, or will soon." But that turned out to be wrong! Or at least, it underestimated the continuing appeal of suing Bank of America, because now not only is everyone who is not Bank of America suing Bank of America, but so is Bank of America: [I]n Florida's Palm Beach County alone, Bank of America has sued itself for foreclosure 11 times since late March, according to foreclosure fraud activist Lynn Szymoniak, who forwarded one such foreclosure filing, dated March 29, 2012, to The Huffington Post. ... In the March 29 filing, Bank of America is seeking to foreclose on a condominium and names the condo owner and Bank of America as defendants in the suit. The company is literally seeking damages from itself in order to foreclose on the condo owner. Ha ha ha but why is Bank of America a delinquent condo owner? Because of course it's not; it's the second lien holder:

Remember when Bank of America bought Countrywide in 2008 and CFC Chief Executive Officer/Oracle Angelo Mozilo said they wouldn't be sorry and it wouldn't be long before BofA would "reap what Countrywide hath sowed"? He wasn't kidding and now, finally, BAC and Ken Lewis, the guy who had the foresight to do the deal, are having their vision and skills recognized. Bank of America thought it had a bargain four years ago when it paid $2.5 billion for tottering mortgage lender Countrywide Financial Corp. But the ill-fated decision has already cost the Charlotte, N.C., lender more than $40 billion in real-estate losses, legal expenses and settlements with state and federal agencies, according to people close to the bank. "It is the worst deal in the history of American finance," said Tony Plath, a banking and finance professor at the University of North Carolina at Charlotte. "Hands down." Bank Of America's $40 Billion Mistake [WSJ]

And then decided that sticking with the "worst deal in the history of American finance," which has cost it $40 billion in cleanup so far, made them at least look like responsible adults, facing the consequences of their actions, rather than deadbeats trying to take the easy way out. Long before Sanford Weill suggested last week that big banks should split up, Bank of America executives and directors considered the idea and then decided against it, said people close to the nation's second-biggest bank by assets...Chief Executive Brian Moynihan and his team looked at a possible bankruptcy of Countrywide Financial Corp., the troubled mortgage operation it purchased in 2008. Management also studied whether it made sense to break off Merrill Lynch, the securities firm it purchased in 2009. Mr. Moynihan ultimately recommended to his board that neither action made sense. The company decided Merrill had become too big of a profit center and splitting it off could expose the brokerage firm to the sort of funding problems that killed off other Wall Street firms in 2008. Meanwhile, it felt bankruptcy of Countrywide might invite more legal and reputational troubles for Bank of America while exposing other subsidiaries to problems. Bank Breakups, Not So Fast [WSJ]