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Jon Lewis
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Bank of America Settlement – Investors v. Homeowners in Foreclosure

8 comments

So, it was reported on Reuters today that

has agreed to pay $8.5 billion cash to settle n">nearly all of the claims related to the legacy Countrywide-issued first-lien residential mortgage-backed securitization (RMBS) repurchase exposure (see here). Yes, $8.5 BILLION DOLLARS! And, some are arguing that this is too low (see here).

n">Now, several things strike me about this settlement. First, is the fact that at least 22 institutional investors have approved the settlement. But, what really strikes me about it is that the case is in "litigation", not arbitration. So, Institutional investors want to litigate IN COURT with Bank of America, but they don’t want to litigate with consumers. They force consumers to arbitrate securities claims through FINRA. Why is it okay for Institutional Investors, large corporations, to go to court to get what they want, but it’s not okay for consumers? Hmmmm.

The second thing that strikes me about this settlement is the value and priorities we place on certain issues. Bank of America can pay out $8.5 billion in cash to institutions who made poor investments, but they cannot work with homeowners and modify their rates on their loans to help keep them in their homes. Many argue that homeowners took on too much with respect to their loans and what they could afford. Didn’t these institutional investors make risky investments and poor decisions even though they are the EXPERTS?

It just seems to me that hard working individuals should be helped out with respect to staying in their homes instead of thrown out on the street by Bank of America when it’s clear that Bank of America (and the other large banks) have the abililty to absorb some loss on the rates they have with these homeowners. Instead of giving Institutional Investors $8.5 billion in cash, why not give it to the homeowner who is working two jobs, trying to raise kids, and keep his/her home?

8 Comments

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  1. lee says:
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    8.5 billion from Bank of America! Where do you suppose they got 8.5 billion dollars from? The answer is from the average tax payer! So we tax payers just funded this agreement to cover any losses to the investors while the average homeowner who funded this absurd bailout to the investors gets booted out of their home! Without the bail out for the banks this would have never been possible.

  2. Scott says:
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    Bank of America, what’s in a name? Well you would think since the word America was in it’s title that they would be proud and stand tall and ready to help out the average American but no they are more willing and ready to throw the hard working man/women out to the streets and have their home sit empty. Why do I say this? I say it because I know first hand, let me give a little background on how I got to where I’m at today. Well prior to 2004 I had a great job and as a matter of fact I had at any given time 2 or 3 jobs and making good money but in August 21, 2004 I was involved in a car wreck that nearly killed me, I had multiply injuries and stayed in 2 different hospitals for a year straight not knowing if would live. My wife, god bless her took on the role as mother and father with her child as well as my two, she got behind on the mortgage and other bills so after I got out and was able to come home I tried to talk with the mortgage company they even allowed me to do a remod from there everything was ok I made my house payment not missing even one but all the while Bank of America NEVER changed the monthly coupon and I would call them all the time getting the same answer ” Don’t worry we will change it, so a year and a half went by and I got a foreclosure notice in the mail telling me that I had to move that I was too far behind!! So that’s where I’m at now still at home disabled and trying to find another home for me and my family to live. So you wanna know what I think about Bank of AMERICA?

  3. Fedup says:
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    People need to take to the streets in mass protest and let the banks and government know that Americans have had enough!!

  4. Jon Lewis says:
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    I cannot disagree with what y’all are saying. However, I don’t think they can use TARP funds to pay out these settlements. Notwithstanding that, this shows you what Corporate America is doing to average citizens.

    How can you change this? VOTE!! Get these people out of office and show them that you aren’t going to stand for this political crap any longer. While you might can blame Republicans, it is still amazing that Obama will have $1 billion for his Presidential campaign. All of this has gotten out of hand.

    Watch “Hot Coffee” (Go to YouTube and type in “Hot Coffee Trailer”), or go to http://www.HotCoffeethemovie.com, and you can see what corporations have done through the U.S. Chamber. Tort Reform and limiting lawsuits limits the check on these corporate actions.

    Get out and let people know what is going on. The public won’t listen to “trial attorneys” because they think we are just in it for the money, but in reality, we are defending the Constitution and individuals who cannot fight these corporations themselves.

    Do we want to earn a good living? Sure. Who doesn’t? But, it’s not free. We work for it. We employ people. We pay taxes. But, most importantly, we help those who do not have the ability to help themselves.

  5. GB says:
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    I need some information i don’t know nothing abaut law and this country. how is possible the court give our homes to banks with aut original note sign for the home owners, wich law protect them and wich one protect people like me to try to fight back with this modern vampires. If any body give me ligth please. sorry my english is no so good. Thank you.

  6. Jon Lewis says:
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    Scott, I’m sorry to hear about your situation. It sounds like you have had a very trying few years. you might want to consider consulting an attorney in your area to see if there are any legal steps you can take to protect your family.

  7. Jon Lewis says:
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    Dear Fedup,

    We need more people on the streets to tell their stories. People don’t want to listen to lawyers.

  8. Jon Lewis says:
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    Dear GB,

    You may want to consult an attorney in your area. Based on your comment, I really cannot tell what the issues are.