The People vs. Bank of America: B of A Giveth and It Taketh Away [View All]

[McCamy Taylor]

Since the administration still has not found its 21st century Ferdinand Pecora to let the public know what the Banksters have been up to, I decided to do some investigating myself. The usual disclaimers. My specialty is health care. If anyone knows more about banking and economics and wants to add or correct anything, please do so. I am just tired of not hearing more specifics about these banks which are robbing us blind.

Did you know that Bank of America is one of the big culprits in the predatory lending scandal? It is currently up to its eyeballs in toxic mortgages. That used to be a bad thing. In 2008, owning a lot of bad mortgages became cause for celebration in the U.S., because that meant that you qualified for billions of dollars in taxpayer bailouts for the crime of redlining---targeting minorities and other vulnerable folks to receive adjustable rate mortgages when they qualified for fixed rate mortgages. Only America under Bush-Cheney would reward corporate criminals with such large sums of money.

And, did you know that Bank of America is also involved in vulture funds? That means it buys (through its partner corporations ) huge packages of so called toxic mortgages (also known as the homes of American taxpayers) for a fraction of their value after they have been foreclosed, because some bank like Bank of America or one of its subsidiaries sold the homeowner an adjustable rate mortgage that the owner could never possibly repay?

That is why this journal is subtitled Bank of America Giveth and It Taketh Away .

If what Bank of America is doing is not a crime, it ought to be.

I. Bank of America Has ALWAYS Been a Mortgage Predator

They will claim that everyone was doing it. They will say Bush-Cheney created a climate of corruption . They will blame Phil Gramm. They will say that they only recently got involved in the mortgage mess, as a public service to their country, when they bought Countrywide to save it from going under. Don’t believe them. Bank of America was notorious for its deceptive and illegal lending practices even before Bush was selected by the Supreme Court in 2000.

Note that in 2000, Bank of America was already the largest subprime lender in the country

http://www.nhi.org/online/issues/109/bradley.html

at a time when minorities were being offered a disproportionate share of the subprime loans, even though a study done by Freddie Mac and Standard and Poors indicated that 63% of these home buyers qualified for an A grade or A minus mortgage. The mortgage writers responded by claiming that it was not their job to give mortgage buyers the best deal. The implication was that it was their job to stick them with the worst possible mortgage that they could possible trick them into signing, even if it meant that the mortgage would go into default. Federal regulation under Clinton was lax. Under Bush it would become worse than lax. The Bush administration would actually make it illegal for state attorney generals to go after those who engaged in deceptive of fraudulent lending practices.

http://www.broadbandreports.com/forum/r21707830-How-the-Bush-Administration-Protected-Predatory-Lending

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

Eliot Spitzer Washington Post 2008

With no one to regulate them, folks like Bank of America continued to prey upon minorities during the Bush years.

For first liens in 2004, within this BofA, African Americans were 2.27 times more likely than whites to be confined to higher cost, rate spread loans. African Americans were denied by BofA 1.91 times more frequently than whites. Latinos were 1.93 times more likely than whites to be confined to higher cost, rate spread loans. Latinos were denied by BofA 1.87 times more frequently than whites.

http://www.innercitypress.org/bofa.html

Note that B of A did not actually deal in mortgages. Instead, it sold bonds. Kind of like selling the smell of food instead of selling the food itself. From Greg Pallast.

Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup’s Citibank made mortgage usury their major profit centers. They did this through a bit of financial legerdemain called “securitization.”
What that means is that they took a bunch of junk mortgages, like the Grinning's, loans about to go down the toilet and re-packaged them into “tranches” of bonds which were stamped “AAA” - top grade - by bond rating agencies. These gold-painted turds were sold as sparkling safe investments to US school district pension funds and town governments in Finland (really).

http://www.gregpalast.com/elliot-spitzer-gets-nailed/

Now, we have paid shills like Santelli with his not so subtly racist message on the floor of the New York Stock exchange trying to convince Americans that banks were justified in ripping off minority home buyers, presumably because it isn’t really a crime if it is white on Black or white on Brown crime But what about all the whites who are about to lose their homes? And elderly Americans? And women? And the disabled? Are only young, straight healthy white males protected from predatory mortgage schemes? And what about the teachers and firemen who invested their pensions in those mortgages? Suddenly teachers and firemen are not protected either? Is the new lesson supposed to be that home ownership is bad in 21st century America?



II. Connect the Dots

Dot number one. Bank of America buys Countrywide in early 2008

http://www.msnbc.msn.com/id/22606833/page/2/

January, 2008, the Bush administration, which never met a merger it did not like (except for the one Qwest wanted, but then Qwest said “no” to domestic spying) had nothing to say when Bank of America acquired the largest mortgage lender in the nation, Countrywide for $4 billion and stock.

The acquisition will make Charlotte-based Bank of America Corp. the nation’s biggest mortgage lender and loan servicer.

Snip

While there are some regulator hurdles to close the deal, they are hardly insurmountable. The buyout would require approval from the Federal Reserve, and possibly other agencies, but analysts believe regulators are more concerned about a Countrywide collapse than industry consolidation.

Recently, Bank of America has tried to position itself as some kind of knight in shining armor, because it agreed to foot the bill for the $8.68 billion settlement between Countrywide and eleven states which sued the mortgage company for its fraudulent practices.

http://www.consumeraffairs.com/news04/2008/10/countrywide_settlement.html

Yes, eight billion dollars sounds like a lot of money for Bank of America to pay for a company that it bought. However, as this article from CNN Money points out, Bank of America’s purchase of Countrywide is being subsidized by the U.S taxpayer, because Bank of America can write off all of Countrywide’s losses from B of A's own taxes for the next five or more years.

http://money.cnn.com/2008/01/11/news/companies/sloan_countrywide.fortune/index.htm?section=money_topstories

And do not forget, that Bank of America gets taxpayer bailout billions for all the so called toxic mortgage debt that it has acquired through its mergers.

Dot number two. Bank of America buys Merrill Lynch.

Bank of America grew even more behemoth by acquiring Merrill Lynch, the proud possessor of “billions of dollars in assets tied to mortgages that have plunged in value.” Note that there is a truism which claims that banks do not want to own property. I have always wondered why this is so. Apparently it is no longer true, as I will discuss in more detail in a moment. This deal took place last September. MSNBC does not comment on the best part of the deal, because they did not know (but I will bet you a nickel that B of A did) that Merrill Lynch’s dowry would include billions of dollars in free federal bailout money for all those supposedly “worthless” assets.

http://www.msnbc.msn.com/id/26708958/

Again, Bank of America was portrayed as a hero for rescuing another failing bank, when in fact it was taking advantage of a situation that it helped to create to fashion itself into a dangerously large corporate giant---and rob the tax payers to the tune of $45 billion.

Dot number two and a half. Bank of America acquires a controlling interest in BlackRock (a major vulture fund) through its acquisition of Merrill Lynch)

Since MSNBC did not talk about BlackRock as one of Merrill Lynch’s assets, I will do it. People forget that there is money to be made from the misfortune of others. A few years ago, one of the biggest businesses in this country was paying winos to pretend to be home buyers so that you could buy up real estate at inflated prices, to inflate the values of your other properties, sell them to people at outrageous prices and make a quick profit. Now, one of the biggest business opportunities in this country is snatching up whole parcels of foreclosed real estate for a fraction of the true market value. Really savvy real estate investors who drove the market prices up through the first scam will now be reaping rewards as people who bought high are having to bail out as their values tumble back to normal.

Here is an article about what BlackRock does.

http://www.mortgagelawnetwork.com/vulture-funds-buy-residential-mortgages/

Basically, it buys up property that has been foreclosed. That is why it is called a vulture fund . It was owned by Merrill Lynch and its own employees. Now, it is controlled by Bank of America, which has indicated that it will continue to allow BlackRock to prey on foreclosed properties.

http://www.bullishbankers.com/blackrock-navigating-financial-markets/

In late January, directors at both Bank of America and BlackRock made large purchases of their own stocks.

http://www.gurufocus.com/news.php?id=46266

All of this leads me to believe that Bank of America expects BlackRock to be a money making division for the banking giant. Now consider. The nation’s largest generator of toxic mortgages, a bank which claims that all its bad loans came from Merrill Lynch but which actually generated 25% of them itself

http://www.innercitypress.org/bofa.html

is also in the business of buying up properties which are about to be foreclosed for a fraction of their value. There is something wrong with this picture. Can you figure out what it is?

A bank which knows that one of its partners can snatch up foreclosed properties no longer has anything to fear if a home buyer defaults. It can write as many subprime loans as it likes, take all the risks that the market will allow, rake in profit, watch people lose their homes and then turn the property over to its resale division, which will sell it again through the bank’s mortgage division. And, if the taxpayers are paying the difference between what the mortgages used to be worth and what the property can fetch now (or a few years from now) on the real estate market, it is a win-win scenario for B of A. There is no way that they can lose.

Indeed, the only ones who will lose are the American tax payers who will end up owning nothing for their billions of dollars thrown down the banking drain, since B of A will almost certainly write off any property sold to its partner, BlackRock as a “loss”.

In this way Bank of America turns into one great big Worm Oroborous, swallowing the country’s home buying dollars in its greed. Since any American who owns a home outright is an outrage to the hungry beast, it desires an economic climate in which people will be forced to take out a mortgage in order to pay their medical expenses or send their kids to college or pay their credit card debt.



III. Bank of America Donated As Much $$$ As Usual Last Year to Politicians. How Did They Manage That?

With all the banks in the United States holding out their hands to the U.S. tax payers, demanding bailouts, you would think that they would have had to tighten their belt buckles. But no, banks like B of A gave just as much to politicians and spent just as much on lobbying last year as any other year. Makes you wonder where those bailout dollars went.

http://www.charlotteobserver.com/business/story/307073.html

A tough year for the banking industry hasn't stopped Charlotte's biggest banks and their employees from spending millions of dollars on lobbying and political contributions.
Bank of America Corp., largely through its political action committees, gave candidates and parties $3.7 million this election cycle, according to an analysis of Federal Election Commission reports. Wachovia Corp. PACs gave $1.2 million.
Wells Fargo & Co., which bought Wachovia last month, gave out nearly $1 million through its PAC.
For Bank of America and Wachovia, the donations were roughly the same as the previous two-year cycle. All that is over and above what the banks spent on lobbying.
Bank of America spent $6.5 million lobbying federal officials over the same period, according to CQMoneyLine, an arm of Congressional Quarterly. Wachovia spent $2.7 million and Wells Fargo, $3.6 million.

If these guys had millions to throw around to politicians (and for bonuses and planes and the Super Bowl), why were we giving them billions? In the next couple of years, they will be able to give even more than they have given during the Bush administration, when they knew that they could count upon federal regulators to help them out. There is enough money in the bailout slush fund to buy all the Senate Republicans and dozens of Santellis. Remember the strategy session called by Bank of America three days after it got billions in bailout money to coordinate a contribution strategy to defeat a labor bill and keep Coleman and other Republicans in the Senate?

http://www.huffingtonpost.com/2009/01/27/bank-of-america-hosted-an_n_161248.html

"If a retailer has not gotten involved in this, if he has not spent money on this election, if he has not sent money to Norm Coleman and all these other guys, they should be shot. They should be thrown out their goddamn jobs," Marcus declared.

Just for the record, there have been three Bush Rangers among the top brass at Bank of America (but we could have guessed that). And their campaign spending in the past has been slanted towards the Republicans.

http://www.sourcewatch.org/index.php?title=Bank_of_America_Corp.

As if that was not enough to endear then to Bush-Cheney, they have been big financial supporters of the coal industry especially the process of extracting coal by mountaintop removal . However, now that Obama is the President, they have vowed to phase out their support for the latter activity. I guess they figure it will not endear them to him the way it did to Dick Cheney.

We know that all politicians require large sums of money to get elected and re-elected, so corporations with money have tremendous clout in DC. With the American people facing a recession, a banking industry flush with cash is in a great position to direct the course our country will take in the next two years.

Yes, I know that it's not fair. We are on the verge of a Second Great Depression because of the banksters' greed and incompetence. And now, because George W. Bush helped them pull off the scam of the century, both with the mergers and the bailouts, a handful of banks like Citibank, Morgan Chase, Goldman Stanley and Bank of America have all the marbles. Politicians will have to go begging to bank CEOs for favors like they are some kind of Mafia dons.

Sucks living in post-Bush America.





IV. Civil Action Against Bank of America

I am not going to comment. I am just going to link a few of the many you can find online to give you an idea of how Bank of America conducts business as usual.
http://www.bizjournals.com/triangle/stories/2008/07/14/daily48.html
http://www.washingtonpost.com/wp-dyn/content/story/2008/10/31/ST2008103102190.html
http://uk.reuters.com/article/bankingfinancial-SP/idUKN0529923720081205
http://www.newswise.com/articles/view/548590/
http://www.pogowasright.org/blogs/dissent/?p=502
http://www.lawcash.com/attorney/4100/bank-america-lawsuit.asp
There is a whole lot more. These were just the first ones I ran across.

Conclusion: Bank of America is Now the Second Largest Bank in the U.S. and It Wants YOUR Money

In the space of a single year, Bank of America grew like Godzilla, and because we were all so scared of the Second Great Depression, no one really paid any attention to what it meant when the Bush administration allowed B of A to acquire Countrywide and then Merrill Lynch (and BlackRock) and $45 billion no strings attached taxpayer dollars. We all know that monopolies are bad, correct? Well, Bank of America now controls home buying and selling in this country, all the way from the first redlining opportunity, when the mortgage writer sizes you up to see if you are so desperate to get your child into a chemical treatment facility that you will sign the papers for the adjustable rate mortgage on your home….. to the vulture fund that will kick you out of the home you have occupied for twenty years.

They have a huge slush fund which they can use to bribe politicians and influence public opinion. If their bad business practices put them at financial risk, they can hold America hostage again---and blame the same minorities that they have been victimizing.

They have proven time and again that they do not possess anything resembling ethics .Bank of America makes money the oldest of ways. They take it. Considering the way that our country got its start, I guess that Bank of America is aptly named, but still---

Can we just go ahead and nationalize their bank? It is called “Bank of America” and after all the money we have poured into it, I think we have more than paid for it. Either that, or break up their monopoly and have a team from the DOJ and the SEC search their books. Oh, and the FEC for good measure. I think it will be time well spent.