Bank of America Continuing To Reap What Country Wide Hath Sowed

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June 29, 2009: Countrywide Chairman and CEO Angelo Mozilo utters greatest veiled threat ever when he tells CFC shareholders at their final meeting that Bank of America “will reap the benefits of what we have sowed.”

October 25, 2012: Analysts estimate the benefits of acquiring Countrywide have so far cost Bank of America $40+ billion in "write-downs, legal expenses, and settlements."

October 8, 2013: Still reaping:

Already saddled with mounting regulatory scrutiny, Bank of America Corp. may see what looked like a closed case reopened as an objection filed by the U.S. government could derail a proposed $500 million settlement the lender struck earlier this year over allegedly defective mortgages. Late Monday, the Federal Deposit Insurance Corporation filed an objection against the settlement Bank of America announced in April regarding allegations it sold billions of dollars of securities backed by defective mortgage loans originated by Countrywide, which Bank of America purchased in 2008. The plaintiffs said that by late 2008, virtually all of those certificates were downgraded to junk-bond status.

Countrywide in November 2007 had been sued by several pension funds involved in the case. Other pension firms were later added to the case, including the Maine State Retirement System in January 2010. Bank of America had said that the settlement—which is subject to court approval—would resolve 80% of all the claims filed against Countrywide mortgage-backed securities alleging securities-disclosure issues, and 70% of the claims filed against Bank of America-created loans over such issues.

Bank of America Mortgage Settlement Faces New Hurdle [WSJ]

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Bank Of America Wins (Unofficial) Deal-Making Award For Remarkable Achievement

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]

Bank Of America Briefly Considered Unburdening Itself Of The Drunken Mistake That Was Countrywide

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]