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BofA, Big Foot and Black Helicopters

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I’m not one for conspiracy theories. Roswell, N.M. has kitsch, nothing more. Despite Oliver Stone’s magic bullet, Oswald did in fact kill Kennedy. But the recent BofA mortgage disaster has me wondering. Gumshoe detectives don’t like coincidences, and neither do I.

The administration didn’t get the foreclosure stall they originally wanted, but I’m sure they’re happy with this instead. And it is October, the month of the notorious election surprise. If the mortgage paperwork was pre-sorted, and it required nothing more than a signature, then it would follow that not every page of identical legalese would be read before closing. J.P Morgan Chase and Citigroup appear to have engaged in the same practice, but have managed to avoid the level of acrimony thus far directed at BofA.  If it is a short-term cynical play (which, truth be told, I don’t really believe) it will have long-term consequences. From the Wall Street Journal:

“But Bank of America also has to address investors' biggest concern—whether the foreclosure issues reflect deeper problems with loans' legal status. If that were the case, banks could face a big risk from private investors demanding repurchases of securitized mortgage bonds. Banks are already facing repurchase demands from Fannie Mae, Freddie Mac and mortgage-insurance firms, for bad loans made during the housing bubble. In the first half of this year, Bank of America took $1.7 billion in charges because of such requests, while outstanding repurchase demands at the bank totaled $11 billion.” [Emphasis mine.]

We might be sticking it to BofA for bad behavior now, but we’ll all pay in the form of delayed economic recovery. After considering all the facts and getting past the sensational populist outrage, ask yourself if it’s really worth it.


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