Monday, August 15, 2011

*Snif*: The TBTF Banks Are Looking at Trouble on Mortgages

All together now, a big cry for the Big Banks.

Geithner may try, but he cannot compel Attorneys General in both parties to settle for pennies on the dollar and relinquish all of their liability for consumer protection violations and fraud upon state courts. He cannot influence investors who see a giant meal ticket in the form of forcing big banks to repurchase faulty mortgage backed securities. If there was a magic bullet in this debacle, it would already have been fired.  --Ticker quoting FireDogLake

What's that all about, Alfie?

...They’ve trotted out Kathryn Wylde, the President of the Partnership for New York City, to attack Eric Schneiderman for his intervention in the Bank of America settlement with investors over mortgage backed securities. Wylde is going to bat for BofA as well as the Bank of New York Mellon, the trustee for the MBS in the settlement. And she is actually arguing that Schneiderman, by defending the rights of investors and seeking the truth on out and out securitization fraud, is threatening the existence of the financial sector in New York City...

Nutshell:  people who bought Mortgage-Backed-Securities (MBS) sold by BofA and BNY/Mellon (among others) discovered that they bought bags of pre-processed Milorganite substrate.  (Figure it out yourselves.)

And they are not happy, so they sued, along with various State AG's where such suits are allowed.

Oh, yes, there's more! 

In some cases, the people who paid off their mortgages find that the bank which "released" the lien actually can NOT do so and that the lien (mortgage) is still on their home and property.

This leads to unhappy ex-borrowers, to say the least.

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