YES !!!!!!!!........BOA Sued Over Mortgage-Backed Securities

[dixiegrrrrl]

Talk about cracks in the ice dam..............



Sept. 29 (Bloomberg) -- Ambac Assurance Corp. sued Bank of America Corp. over $16.7 billion of mortgage-backed securities, saying the bank’s Countrywide Financial Corp. fraudulently induced Ambac to insure the bonds.

Ambac found that 97 percent of 6,533 home mortgage loans it reviewed across the 12 securitizations sponsored by Countrywide didn’t conform to the lender’s ( Countrywide, now BOA ) underwriting guidelines, according to the complaint filed in New York state Supreme Court. Many of the loans were made to borrowers with limited or no ability to meet their payment obligations, Ambac said.

Ambac has paid hundreds of millions of dollars in claims connected to defaults in the securities, according to the suit filed yesterday. At the same time, Countrywide has refused to comply in a timely fashion with its obligations to repurchase the out-of-guideline loans or bring them into compliance, the lawsuit claims.

Snip......

Over the last two years, the loans in the transactions have defaulted at what Ambac calls “extraordinary rates.”
To date, the suit claims, more than 35,000 loans with a total principal balance of more than $1.95 billion have defaulted or been charged off. As a result, the suit says, Ambac has been forced to make more than $466 million in claim payments.

http://www.businessweek.com/news/2010-09-29/ambac-sues-countrywide-over-mortgage-backed-bonds.html

[louis-t]

1. BoA deserves this, but they will just raise fees

to cover any losses. They just raised fees again, and found a few new fees they could get away with.

[markbark]

2. Why not do a little "rescission"

Health insurance mobsters do it all the time.

[Mira]

3. Recommendation number 5 on a very important story n/t

[tk2kewl]

4. I knew banks were writing bad loans, but 97%

:wow:

[dixiegrrrrl]

6. Turns out this is how they did it.

those bundles ( "tranches") of Mortgage bonds were made up of some good and some bad mortgages, right?
Of course the investors ( pension funds and the like) who bought the "guaranteed" bonds had no idea which mortgages were in which bundles.
Well, those bundles got "shuffled" over time, and more and more "bad" mortgages were included as the housing bubble burst, so that eventually ( note the story covers 2006 thru 2009) the bundles were full of garbage.

Now, if this story is reflecting 97% of ONE insurance portfolio of SOME Countrywide ( now BOA) mortgages,
what about all the millions of mortgages that were stuffed into millions of bonds by dozens of other banks?

[girl gone mad]

8. Do you remember Deninger covering this last year?

I don't remember the specifics, but the gist was that one of his readers in FL was doing research and discovered evidence of fraud in virtually every mortgage he looked at. Basically, the banks were taking a lot of short cuts to get these deals through as quickly as possible.

[dixiegrrrrl]

9. Yes. And he is covering this a lot, this month.

I read him daily. Have learned tons of information, tho cannot say I am the happier for it.
reality sucks.

:hi:

[toddwv]

5. I'll bet that this is all Barney Franks fault....

somehow.

/EndSarcasm

[westerebus]

7. Hey Ben! Fire up the press!

Push the button!

Add a few digits to the balance sheet!

What ever it is you do, just DO IT!

This is gonna leave a mark!

And we all know BoA can't write a check for it.

Talk about over draft fees?

:rofl:

[econoclast]

10. Alternate headline ....

Ambac admits it wrote insurance on billions of dollars of loans it never bothered to examine!

I switched homeowners insurance companies a while ago. The new insurer sent someone around to make sure the property was as described on the app and worth the amount I wanted to insure it for. Guess that simple philosophy was too much for Ambac.