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22 Dec 2011 01:03

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U.S.: Countrywide will pay massive settlement over subprime crisis

  • $335 million settlement over discrimination charges source
  • » They allegedly steered minorities towards bad mortgages. The company, something of the focal point of the subprime housing scandal, now has to face the music. Bank of America, the parent of Countrywide Financial, had to settle claims from before it purchased the company, a four-year period during the housing boom when loans were handed out very easily. In the case of Countrywide, however, there is evidence that while white homeowners got offered normal mortgage, black or Latino homeowners of similar stature received a subprime mortgage instead, meaning that they were given higher interest rates and unfavorable terms for loans, making it easier to default. As part of the settlement with the Justice Department, the company denied the charges, while Bank of America distanced itself from the housing-boom-era actions
Posted by Ernie Smith • 0 Comments • Permalink

01 Dec 2011 14:36

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Biz: Massachusetts Attorney General Martha Coakley moves on foreclosures

  • 5 major banks sued by Massachusetts over unlawful home foreclosures source
  • » The deluge of home foreclosures that the U.S. has suffered since the financial crisis has been a crippling blow to the general economy, land value rates in high-foreclosure areas, and most of all the families who’ve found themselves unceremoniously cast out. A notable amount of these foreclosures appear to have been fraudulently engineered, rife with examples of flat-out false documentation, as well as “robo-signing,” a practice in which foreclosure documents are fast-tracked with (in some cases) fraudulent signatures and without the signee ever having read them. This was the impetus for Massachusetts Attorney General Martha Coakley filing suit against five major banks — BofA, JPMorgan Chase, Wells Fargo, Citi, and Ally Financial.
Posted by Chris Tognotti • 0 Comments • Permalink

28 Nov 2011 11:28

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Biz: Bloomberg: Banks scored sneaky profits on emergency loans

  • $13 billion earned by banks via roundabout loans source
  • » How they worked: These banks took advantage of a set of emergency loans from the Federal Reserve distributed between August 2007 and April 2010. Bloomberg Markets magazine did the math on the numbers and figured out that, by looking at the companies’ net interest margin, you could see how the companies took advantage of the below-market rates they got on the loans to earn a profit. The companies that scored the biggest paydays? Citigroup, which earned $1.8 billion, and Bank of America, which earned $1.5 billion.
Posted by Ernie Smith • 0 Comments • Permalink

01 Nov 2011 14:30

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Biz: Bank of America terminates their debit card fee plan

  • $5 Bank of America debit fee to end over consumer outrage source
  • » Nickel and diming: You may remember that last month, Bank of America indicated they were going to start charging a $5/month fee for all their banking customers with debit cards. The ostensible justification for this was new regulation imposed by the Dodd/Frank financial reform bill, which some banks warned would result in hidden fees moving out into the open. This upset a great deal of people, though (the massive profits BofA continues to reap in a bad economy does make it seem questionable whether these are fees of necessity), and now the fee plan has been eliminated. Other banks considered following suit, then backed down, leaving BofA out in the cold.
Posted by Chris Tognotti • 0 Comments • Permalink

28 Oct 2011 08:35

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Biz: Not every financial outlet trying Bank of America’s debit card fees

  • cause Last month, Bank of America decided that it would start charging monthly for the use of debit cards. Some companies (including SunTrust and Regions) followed suit. Consumers freaked out and totally got up on arms.
  • reaction With some time and distance away from the original decision, a number of large banks have chosen not to follow suit — among them J.P. Morgan Chase, which tested them for months and found that they weren’t working. source
Posted by Ernie Smith • 0 Comments • Permalink

05 Oct 2011 01:01

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Biz, Tech: Could Bank of America’s debit card charge push us to digital wallets?

  • It may be too early now to talk about the Law of Unintended Consequences, but years from now, we may owe a debt to reforms like Dodd-Frank for finally weaning us off the physical wallet and encouraging us to experiment with the new technologies helping to create the Digital Wallet.
  • The Washington Post’s Dominic Basulto • Arguing that Dodd-Frank’s side effects — such as Bank of America‘s decision to start charging people for the right to use a debit card — will be great in the long run, because it will push consumers and businesses to stop relying on banks for these sorts of services, instead going for phone-based options, provided by companies such as Google or Square, instead. Basuito compares Bank of America’s controversial move to Netflix‘s price-raising scheme, and suggests it will hurt them long-term. source
Posted by Ernie Smith • 0 Comments • Permalink

01 Oct 2011 16:16

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U.S.: Why the anti-Bank of America “Take Back Boston” protests worked so well

  • Much credit to these protesters: In some ways, these protests were arguably more effective in one quick burst than the Occupy Wall Street protests have been in one long, slow-moving one. With a specific target (Bank of America) and a specific reason (their overly harsh handling of foreclosures) the result is a protest that plays well for the cameras and effectively encapsulates the point of what’s going on. People got arrested, but they did peacefully. It took a while to draw some reaction from Occupy Wall Street; Bank of America was forced to dismiss the protests as a PR stunt right away. But the fact they had to say anything at all is a big deal. source
Posted by Ernie Smith • 0 Comments • Permalink
 

25 Aug 2011 10:31

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Biz: Warren Buffett invests a ton of cash in struggling Bank of America

  • $5 billion investment from Warren Buffett to Bank of America source
  • » Giving it to the needy: Our boy Warren Buffett, who recently took the U.S. government to task for not raising taxes on the rich, is giving a big cash infusion to a company that’s struggling build confidence in investors. It’s taken a hit on the stock market — its shares are down nearly 30 percent since the beginning of August and it just announced some huge job cuts — and it owns a couple of properties, Countrywide and Merrill Lynch, noted for their spectacular combustions during the financial crisis. Buffett’s deal is pretty sweet — a 6 percent annual dividend and a 5 percent premium if he buys back the stock — but he nonetheless sounds like he’s doing it out of respect for the company. “I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them,” Buffett said in a statement. “Bank of America is focused on their customers and on serving them well. That’s what customers want, and that’s the company’s strategy.”
Posted by Ernie Smith • 0 Comments • Permalink

19 Aug 2011 01:57

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Biz: Bank of America dropping some assets. By “assets,” we mean people.

  • 10,000+ number of workers expected to lose their jobs in a company restructuring; that’s 3.5 percent of the workforce
  • 3,500 workers could get laid off this quarter alone, which is happening in efforts to stage a company turnaround source
Posted by Ernie Smith • 0 Comments • Permalink

08 Aug 2011 11:10

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Biz: AIG sues Bank of America claiming they got massively defrauded

  • Defendants were engaged in a massive scheme to manipulate and deceive investors, like AIG, who had no alternative but to rely on the lies and omissions made.
  • A legal complaint filed by AIG • Revealing that the company, which still has a freaking massive taxpayer bill to pay off, plans to sue Bank of America for $10 billion dollars, claiming “massive fraud” on the mortgage debt AIG insured while the companies Countrywide and Merrill Lynch were still independent. (To put it simply, AIG feels that the companies lied about the quality of the debt, making them sound better than it was.) AIG is still working on paying back roughly $182.3 billion in bailouts, so the $10 billion would help. source
Posted by Ernie Smith • 0 Comments • Permalink
 
 
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