BOA DEATHWATCH: MEMORANDUM OF UNDERSTANDING IN PLACE FOR TWO+ YEARS

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EDITOR’S NOTE: Put BOA on the endangered species list. The regulators entered into secret “MOU” in May, 2009 where the Bank was put on notice that it was operating without sufficient capital and that its management was not meeting standards of the industry. With the upcoming slew of “defaults” and BOA’s balance sheet showing assets that are either non-existent or vastly overvalued, the time is nearing for government action. The minimum is a psinoff of Merrill Lynch, but the writing is on the wall and the Bank is headed for extinction because it cannot raise minimum capital requirements to offset the write down of the mortgages it is claiming or the buy-backs demanded by Fannie and Freddie.

The effect on the housing market and foreclosures in general is difficult to measure at this time. BOA is resisting compliance with the MOU and the OCC Consent decree, which are interrelated. If the mortgages they claim on their books don’t actually belong to BOA (which many don’t, in my opinion) then their capital will plummet and the only answer will be nationalization or resolution under the Dodd-Frank Act. Whatever hope they had to survive is being diminished by their arrogance.

It will be especially interesting to see what happens to Quality Loan Service which is controlled by BOA. QLS serves as the “Substitute trustee” in tens of thousands of foreclosures in non-judicial states. It is the equivalent of BOA declaring by fiat that it is the creditor when they never loaned any money nor did they buy the loans, and then naming itself as the “independent trustee” on the deed of trust. Plenty of problems with that scenario. Whoever takes over that function will have a Madoff-like mess on their hands potentially requiring reversal of tens of thousands of foreclosures.

WSJ: BofA warned by regulators

From the WSJ: BofA Warned to Get Stronger

Bank of America Corp.’s board has been told that the company could face a public enforcement action if regulators aren’t satisfied with recent steps taken to strengthen the bank … The nation’s second-largest lender has been operating under a memorandum of understanding since May 2009 … In recent months, regulators met with Bank of America’s board and said they wanted to see more progress … Otherwise the informal order could turn into a formal and public action …

This would be a huge addition to the “Unofficial” problem bank list (We only include banks operating under a formal action on the list). A formal action would mean greater restrictions – and would bring more negative publicity to the bank.

Earlier:
• Existing Home Sales in October: 4.97 million SAAR, 8.0 months of supply
• Existing Home Sales: More on Inventory and NSA Sales Graph
• Existing Home Sales graphsE

Tags: bankruptcy, BOA, borrower, capital requirements, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, memorandum of understanding, modification, OCC consent decree, Quality Loan Service, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |