BofA Board Sued by Holders Over Mortgage Recording Paperwork

[Lone_Star_Dem]

Bank of America Corp. (BAC)’s board and some officers were sued by shareholders claiming they were hurt by false and misleading statements that hid defects in mortgage recording and foreclosure paperwork.

Bank of America “did not properly record many of its mortgages when originated or acquired, which severely complicated the foreclosure process when it became necessary,” according to the complaint filed today in New York state Supreme Court in Manhattan. The bank also concealed that it didn’t have adequate personnel to process the large numbers of foreclosed loans in its portfolio, the shareholders said.

The bank’s stock traded at inflated prices, reaching a high of $19.48 on April 15, 2010, and fell almost 42 percent after the problems were disclosed, according to the complaint.

The directors and officers also hid the bank’s involvement in “dollar rolling,” omitting billions of dollars in debt from its balance sheet, according to the complaint. Bank of America later admitted it wrongly classified the transactions as sales when they were secured borrowing, according to the complaint.

http://www.bloomberg.com/news/2011-03-28/bank-of-america-board-sued-by-holders-over-mortgage-defects.html

From July, 2010:

Documents Show Bank of America 'Dollar Rolled' $10 Billion in Debt

Bank of America Corporation has admitted to maneuvering as much as $10.7 billion in debt from its balance sheet and then back again through repurchasing deals that the bank called "dollar rolls."

The deals involved short-term agreements in which the bank would move mortgage-backed securities off its books to another entity, while agreeing to repurchase the package at a later date — usually after it had reported its quarterly financial statement to the Securities and Exchange Commission.

In a letter (pdf) responding to questions from the SEC, the bank admitted it wrongly classified the moves as "sales" when they were really a form of secured borrowing.

http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202463450064

[gratuitous]

1. "Wrongly classified the moves"

Gosh, if only the Bank of America could have afforded to hire some competent accounting help so as to avoid this embarrassing little accounting slip-up. A slip-up that just coincidentally improved the status of its bottom line, but there was nothing intentional about it, so stop saying that. Gee whiz, who would have guessed that dumping a lot of bad paper just before the end of the quarter would make the bank look so much more solvent for its quarterly report?

[xchrom]

No one could foresee those - um - accounting errors! Nt

[DJ13]

2. From July, 2010.......

And yet theres been no prosecution of this obvious fraud.

Wheres this change I was led to believe we would see after Obama was elected?

[dixiegrrrrl]

3. BOA not the only bank that has been reported to do that. All the TBTF banks do it.

It is the only way they can hide the fact they are insolvent.