Wednesday, December 31, 2014
Countrywide, the pile of shit that keeps on giving
And one of the things it keeps on giving is a headache to the senior management of Bank of America. The latest headache has sprung from one of the securities insurance firms seeking to recoup the millions in losses from backing the deceptively marketed shit that were Countrywide mortgages.
In a complaint filed on Tuesday in a New York state court in Manhattan, Ambac accused Countrywide of lying about how well it underwrote so-called "pay option adjustable-rate mortgage negative amortization" loans that backed the securities.So we have another dust up between some of the Big Swinging Dicks of Finance and in the end a large sum of money will change hands and the homeowners who were fucked over will remain fucked over.
The securities were issued in eight transactions between 2005 and 2007, Ambac said.
Ambac said it faced potential claims exceeding $600 million as of Oct. 31 and that pools of loans supporting its insured certificates had suffered $3.07 billion of losses by Nov. 30. It also said it would have never guaranteed payments had it known of Countrywide's deception.
"Countrywide's fraud is borne out by the transactions' dismal performance," Ambac said...
The lawsuit shows how Charlotte, North Carolina-based Bank of America might still face legal liability over shoddy mortgage practices predating the 2008 financial crisis, even after agreeing in August with federal and state authorities to pay a record $16.65 billion penalty to settle civil fraud charges.
Chief Executive Brian Moynihan said at a Nov. 12 conference that the bank's major regulatory and litigation costs tied to the financial crisis, including the purchases of Countrywide and Merrill Lynch & Co, were "largely behind us."
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