Source: Daily Bail Despite the wishes of Sheila Bair and Chris Whalen, I don't see BAC being nationalized and restructured. They have too much political power behind their godforsaken franchise of usury. This deal with Fannie is an outrage. Now taxpayers are on the hook for any and all lawsuits associated with the fraud. This was a transfer of liability more than anything else. Details on today's taxpayer pillaging are below. --- NEW YORK (TheStreet) -- The official bailout of the financial system may be over, but the government is apparently far from finished propping up big banks, as evidenced by the news that Bank of America has struck a deal to dump a bunch of near-worthless home loans on U.S. taxpayers. According to a report in The Wall Street Journal Bank of America has sold the rights to process and collect payments on 400,000 home loans to Fannie Mae, the government-controlled mortgage giant. The loans have an unpaid principal balance of $73 billion, but are being sold for $500 million, according to the report. Doesn't sound like a bad deal for the government,unless that $500 million price tag will soon be too steep, which is what "a person familiar with the deal," told the Journal. According to the WSJ, Fannie Mae spent $500 million to buy the servicing rights to a big chunk of the "seven million loans still causing the most problems." Although the $500 million is a paper loss to BofA, in that the rights were "originally worth more," it looks like BofA is still getting a good deal because the portfolio's "value is expected to deteriorate further."
Before we get to the story from the WSJ and The Street.com, a few BofA links from today:
16 September 2011
Bank Of America's Backdoor Bailout - Dumping Mortgage Trash Onto Taxpayers Via Fannie Mae - BlackListedNews.com
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