Bank of America Watch

Bank of America: Computer FAIL

2012-01-29T09:55:00.000-08:00

The Bank of America got billions in bailout dollars, but they can't even construct a simple letter properly.

Take a look at this document.

It instructs the consumer to write to the Orwellian sounding "Consumer Correspondence Unit CA6-919-01-41" but also to designate the recipient as "name." Yes, "name." Either Bank of America employees don't have names or there's something rather wrong here. Try something rather wrong first!

Small wonder the Bank of America is imploding.

600,000 Consumers Leave The Bailed Out Banks!

2012-01-28T08:39:00.000-08:00

January 28, 2012: More than 600,000 U.S. consumers have moved their money from big banks to community banks or credit unions, thanks to the much-publicized Bank Transfer Day last fall, according to an analysis released by Javelin Strategy & Research.

The grassroots campaign to get people to shift out of big banks capitalized on the nationwide Occupy Wall Street movement, and picked up further momentum from a Bank of America plan in September to charge customers a $5 per month debit card fee. After the bank dropped this plan ahead of Bank Transfer Day on November 5, an exit from big banks continued, sparked by Bank Transfer Day's Facebook campaign. (More than 60,000 have "liked" the page.)

"It was a meaningful movement of people from big banks into small community banks and credit unions, but it wasn't a huge number by any stretch," said Jim Van Dyke, founder of Javelin, a research and consulting company which on Thursday released a data-based analysis of the impact of the movement.

Nevertheless, he said, "It was quite a feat. I don't think we'll see it repeated any time soon."

Historically, people don't switch banks easily, even if they are unhappy, Van Dyke says. Consumers have strong ties to their banks because of direct deposit, automated bill payments and habit -- making change more complex than simply going someplace else.

"Individuals are really resistant to moving their money out of banks," Van Dyke says, noting that Javelin has tracked customer behavior at banks through a large sample survey since 2003. "The difference between what they say and what they do is really different."

American Bankers Association spokeswoman Carol Kaplan says the numbers of those fleeing big banks should be kept in perspective.

"While these 600,000 adults represent an exceedingly tiny fragment of the hundreds of millions of Americans with bank accounts, the industry takes consumer sentiment seriously... Consumers have a wealth of choice and banks have always been in favor of competition, regardless of where it comes from," she says.

An additional 200,000 people claimed they had moved their accounts due to the campaign against big banks, but did not take their money out of one of the top 10 institutions, Van Dyke says.

Bank of America did not bear the brunt of the account closings, Van Dyke says -- its losses attributed to the Bank Transfer campaign were statistically similar to losses at the other large banks.

"We didn't see any individual bank punished out of this more than the rest," he says.

Bank of America spokeswoman Betty Riess wouldn't comment on Javelin's findings or the impact of Bank Transfer Day. However, CEO Brian T. Moynihan had said in a recent conference call with analysts that the bank did take a hit.

Moynihan said on the call that the bank had a 20 percent increase in account closings in the fourth quarter of 2011 compared to the same quarter in 2010. "So I'd say that yes, we had some impact from the $5 debit fee. That's why we made a decision to reverse it," he said, according to transcripts of the conference call published on the internet.

That statement shows that the bank understands that consumers' voices count, says Ed Mierzwinski, consumer program director for U.S. PIRG, which advocates for consumers on a variety of issues including banking.

"Bank of America got the message and did take a hit," he says, noting Moynihan's comments. "Bank of America and other big banks now know that unfair practices will and do result in consumers voting with their feet."

Overall, about 5.6 million people moved their bank accounts in the last quarter of 2011, Javelin says. Account changes attributed to Bank Transfer Day represented about 11 percent of total moves. About a quarter of the overall group that moved accounts cited fees that banks charge. Fees, including Bank of America's proposed monthly debit card fee, were at the core of the push to move consumers' cash to nonprofit credit unions, which tend to have lower and fewer charges for routine banking.

The trade group Credit Union National Association estimates that between the time Bank of America announced the plan to charge a debit-use fee and the week following Bank Transfer Day, some 700,000 people moved their accounts to credit unions.

Technology plays a big role when consumers switch banks, Van Dyke says. Younger adults place greater value on having robust online banking tools -- something not as commonly available at smaller banks and credit unions.

"It turned out that technology and individuals' inertia really won the day in favor of the large banks," Van Dyke says. "If this continues, these small institutions will go the way of the Oldsmobile."

Bank of America's Brian Moynihan Calls "RETREAT!"

2012-01-13T09:10:00.000-08:00

The Bank of America has advised regulators that it is willing to retreat from some parts of the country if its financial problems deepen.

Among the 7,400 U.S. banks and savings institutions, Bank of America, JPMorgan Chase & Co. and Wells Fargo & Co. are the only coast-to-coast giants. For the past 20 years, Bank of America and predecessor NationsBank Corp. relentlessly acquired other financial institutions in a form of manifest destiny that shook the U.S. banking industry. The 1998 takeover of BankAmerica Corp., of San Francisco, and 2004 purchase of FleetBoston Financial Corp., Boston, left the combined bank with sizable muscle in nearly every large metropolitan area in the country.

Over the course of its long expansion, Bank of America pushed its way into every nook and cranny of the financial system. But in doing so the bank left itself more exposed than any major bank to the severe economic downturn of 2008-2009, the weak recovery since and a litany of mortgage-related lawsuits.

Bank of America stumbled at a time when the entire U.S. banking industry was going through its worst crisis since the 1930s, prompting a federal bailout of many of the nation's largest financial institutions. Still, some of Bank of America's worst wounds, particularly its 2008 purchase of Countrywide Financial Corp., were self-inflicted.

Its share price has tumbled 55% in the past year, the worst performance of any major U.S. bank. In the third quarter, JPMorgan leapfrogged Bank of America to become the biggest U.S. bank by assets.

Bank of America Chief Executive Brian Moynihan put a possible geographic retrenchment on the list submitted in the middle of last year to regulators. Also on the list is a potential sale of a separate class of shares tied to the performance of Merrill Lynch & Co., the securities firm owned by Bank of America, according to people familiar with the matter. Merrill was sinking when Bank of America swooped in to buy the firm in 2008, but has since turned itself around.

The drastic moves would be seriously considered only if Bank of America needs to raise more capital to cushion itself from mortgage woes and other turmoil. The exercise wasn't intended to force immediate action but rather to prepare Bank of America if its situation worsened, according to a person familiar with the Fed's approach. But Mr. Moynihan, other top executives and directors of the sprawling bank are grappling with scenarios that were unthinkable even during the worst moments of the financial crisis.

The 52-year-old Mr. Moynihan was promoted to CEO in 2010 to fix a bad situation inherited from predecessor Kenneth D. Lewis, who pushed hard for the Countrywide acquisition. "I see these times as a vindication of our model," Mr. Lewis said in 2007 after announcing the agreement to buy Countrywide. The deal has haunted Bank of America ever since, saddling the company with huge losses and legal woes.

Mitt Romney Says: "Occupy the Bank of America" (and then sue them)

2011-12-24T07:42:00.000-08:00

DECEMBER 23, 2011: LANCASTER, N.H. — Mitt Romney, who has argued that home foreclosures should be allowed to “hit the bottom,” encouraged a homeowner in New Hampshire to sue Bank of America to stop harassment over a mortgage.

During a conversation at a diner on Friday, the man, Eric Pyra, told Mr. Romney that Bank of America was sending him letters threatening foreclosure, even though he said he had regularly made monthly mortgage payments.

Mr. Romney told the man that, if he was correct about his payments and had the documentation to prove it, he should take the company to court or sit in the lobby of the bank’s headquarters and demand to review the paperwork with Bank of America employees.

“Occupy Bank of America?” the man said, playfully.

“Yeah, exactly,” Mr. Romney said.

After Mr. Romney had moved on to speak with other voters, Mr. Pyra, 40, told a reporter that he had not made a large payment on his mortgage, called a “balloon,” that totaled about $92,000.

A part of his exchange with Mr. Romney, starting after Mr. Pyra explains his circumstances, appears below:

ROMNEY: That might be something to go down to their office — big office in Boston — go sit in their front lobby and say ‘I’m gonna sit here until you sit down with me and look at these documents.”

PYRA: Occupy Bank of America?

ROMNEY: “Yeah, exactly. Yeah. If you are in the right, and you’ve got the documents to prove it, I’d go after them. The other thing you can do is file a suit against them.

PYRA: I can’t afford a lawyer, so –

ROMNEY: Ah, just file it in small claims court. Just say that they’ve been harassing you. If you’ve been making your payments, and you’ve got your documents, then you can show that, I’d go to small claims court and say these guys have been harassing me.

Mr. Romney then summoned John Sununu, the former governor of New Hampshire, who was at the diner campaigning with the Republican presidential candidate.

“So this guy has been paying his mortgage every month, O.K.?” he told Mr. Sununu. “And he’s got all his paperwork in. But Bank of America keeps telling him they are going to foreclose, even though he’s paid and can prove he has paid and so forth. Do you have some kind of harassment statute in this state that he can file small claim action against them? That would get their attention.”

A spokesman for Bank of America could not be immediately reached.

Occupy Clarksville: Bank of America DOES NOT PAY TAXES!

2011-11-18T08:57:00.000-08:00

CLARKSVILLE, Tenn. – November the 17th has been named International Day of Action by the Occupy Wall Street movement and for the local Occupy Clarksville group that meant a march to the downtown Bank of America located on Regions Street.

It is the 25th day the group has maintained an uninterrupted occupation of Public Square and even as the weather gets colder there appears no letup in their determination. Thursday’s march was Occupy Clarksville’s actin to take a stand against corporate greed and corruption.

According to some of the signs, Bank of America the group claims paid nothing in income taxes in 2010. In fact, according to a Forbes Magazine article analyzing the tax returns of some top 25 companies in America although the company declared $4.4 billion in income for the year.

According to the Forbes story the reason is because, “Of deductions like $860 million in tax-exempt income, $670 million in low-income housing credits and a $600 million loss on shares of foreign subsidiaries.” The article even projected the company probably will not pay taxes on the billions in income for some time.

Another one of the group’s signs proclaims the financial institution makes the most foreclosures on homes than any other U.S. bank. According to the U.S. Treasury Department B of A only modifies seven percent of the home loans in foreclosure. That is compared to 25 percent of modifications made by JP Morgan Chase another financial giant. Compare Bank of America’s seven percent to the next lowest percentage of 11 by the financial institution Wells Fargo and there is still four percent disparage.

Often the complaint is that Bank of America makes the process to modify a home loan difficult and full of so much red tape that by the time a home owner in trouble can actually work through it, their home is outside the prerequisites. The most common complaint is the financial giant keeps losing documentation.

The Occupy Clarksville group invites the public out to Public Square at any time to ask questions or participate. During the International Day of Action the group put out a call to “Take our fight for economic justice out of the park and into the streets. Banks got bailed out. We got sold out.”

Bank of America: Layoffs Begin In Charlotte, NC

2011-11-16T10:59:00.000-08:00

November 15, 2001: The first phase of a massive layoff by handing out pink slips to an undisclosed number of Bank of America employees in Charlotte started today.

People familiar with the situation tell the Charlotte Business Journal that layoff notices were circulated at technology and operations division offices Tuesday afternoon. Others mentioned the layoffs on Twitter. It’s unclear how many employees have lost their jobs.

BofA has not responded to requests for comment on the layoffs.

The bank previously said it would cut 30,000 jobs companywide by the end of next year as it trims expenses and tries to improve its performance. It’s part of Project New BAC, Chief Executive Brian Moynihan’s efficiency initiative. The current phase of the project focused on the bank’s consumer-banking and support divisions. A second phase next year will focus on the investment-banking and capital-markets divisions.

BofA hopes to slash $5 billion in annual expenses by 2013.

Sources say this is the first of three rounds of planned cuts. And Charlotte is expected to be hit hard during the first phase of New BAC because it is home to many consumer-banking and technology and operations jobs.

“I’ve been getting pinged on LinkedIn like never before,” says a former BofA employee who now has his own business. “People want to know if I’m hiring.”

BofA shares have been down about 50% this year as investors have grown weary of its challenges amid a slow economy and ill-timed acquisitions.

BofA has about 15,000 employees in Charlotte, according to the most recent estimates.

Bank of America: Moynihan the Merciless!

2011-11-13T11:01:00.000-08:00

Just listening to Sandra Simmons recall her two-year struggle with mortgage loan modification is exhausting.

To live through it, she says, is even more so.

The 50-year-old housekeeper and single mother of four is at risk of losing her three-bedroom Concord Drive home in Jackson to foreclosure after a string of miscommunication gaffes.

In 2009, falling behind on her house payments, Simmons applied with Bank of America to renegotiate her existing mortgage loan. She said her modification had been approved and stonewalled because she failed to provide information she was never asked for.

Then, once Simmons began making modified payments, she says she was bounced from one representative to another, each telling her she owed a different amount.

Then the cycle repeated.

"It's been a back-and-forth situation for two years. I don't think anyone should be put through that," Simmons said as she stood outside her home.

"Has this modification helped anybody? I haven't heard any success stories. Am I alone in this?"

Bank of America spokeswoman Jumana Bauwens said in a email statement that the bank is committed to improvng its processes to assist distressed homeowners.

"Bank of America has completed more than 900,000 modifications since the housing crisis began," Bauwens said. "We will continue to work with Ms. Simmons until we have explored all options to avoid foreclosure."

Simmons has sought help from a local loan counselor and filed a complaint with the state attorney general's office.

Bank of America was to foreclose on Simmons' home last month, she said, but it has been postponed. Simmons is still uncertain of her standing with the bank.

"Be consistent with your story, then I'll understand," she said.

Stories like Simmons' are common among distressed homeowners facing foreclosure, said Scott Spivey, spokesman for the Mississippi Home Corp. Spivey said homeowners seeking help from MHC counselors often vent about modification programs.

Jan Schaeffer, a spokeswoman for the attorney general's office, said the office also has fielded some calls.

"The different (lender) divisions aren't talking to one another, and the homeowner is bouncing around between people," Spivey said.

"The homeowner is already desperate. Then there's the added frustration of, 'Nobody's helping me here.'"

Among large mortgage servicers, Bank of America left most struggling homeowners in limbo without either modifying or foreclosing, according to a study released earlier this year by ProPublica. In addition, the study showed the average modification occurred seven to 11 months after the borrower fell behind.

To be eligible for a loan modification, homeowners must prove financial hardship. In addition, they must prove they are able and willing to continue payments if modification is granted.

Spivey said such programs might not be the right fit for all, given each homeowner's circumstance.

"Some modifications don't go far enough," Spivey said. "Even a successful modification may not help depending on the circumstance. Every case is different."

Spivey said alternative options include the Mississippi Home Saver Program and the Home Affordable Modification Program, or HAMP.

Home Saver, a federally funded program that debuted last year, makes a year's worth of mortgage payments for those who have lost their jobs and are seeking work.

It will end in December 2017, or when funds are depleted.

HAMP, another federal program, expands eligibility to borrowers who are delinquent as well as borrowers whose default is imminent. The program is effective for mortgages originated on or before Jan. 1, 2009, and will expire Dec. 31, 2012.

According to the ProPublica study, just over one in five homeowners who applied for HAMP have received a permanent modification.

Also, about 1.3 million homeowners were denied approval without being placed in HAMP's three-month trial period, which determines whether homeowners can afford their new payments.

Spivey said additional information about both programs is available through MHC's Foreclosure Mitigation Counseling Program. The service is free, and a list of counseling agencies is available on MHC's website.

Since July 2009, 284 Mississippi homeowners have sought counseling through MHC. Of that number, 70 have received some sort of modification.

Spivey said homeowners should beware of foreclosure counseling scams in which they are asked for pay for services.

He said MHC has not come across any victimized homeowners.

The attorney general's office discourages homeowners from using private companies that often charge thousands of dollars for services.

Schaeffer suggests contacting a lender directly and applying for a loan modification, if needed.

Bank of America: $410 Million Class Action Settlement

2011-11-07T17:30:00.000-08:00

On Monday, November 7, 2011, a federal judge gave final approval to a $410 million settlement in a class-action lawsuit affecting more than 13 million Bank of America customers who had debit card overdrafts during the past decade.

Senior U.S. District Judge James Lawrence King said the agreement was fair and reasonable, even though it drew criticism from some customers because they would only receive a fraction of what they paid in overdraft fees. The fees were usually $35 per occurrence.

"It's really undisputed that this is one of the largest settlements ever in a consumer case," said Aaron Podhurst, a lead attorney for the customer class.

The settlement became final a week after Charlotte, N.C.-based Bank of America backed off a plan to charge a $5 monthly fee for debit-card purchases. The outcry prompted other major banks, including JPMorgan Chase & Co. and Wells Fargo & Co., to cancel trial tests of their own debit card fees.

Bank attorney Laurence Hutt said 13.2 million Bank of America customers who had debit cards between January 2001 and May 2011 would get some payment. Those who still have accounts would get an automatic credit and the others would get a check mailed to them. No one would have to take any action or fill out any paperwork.

Barry Himmelstein, an attorney for customers who objected to the deal, said he calculated that the bank actually raked in $4.5 billion through the overdraft fees and was repaying less than 10 percent. He said the average customer in the case had $300 in overdraft fees, making them eligible for a $27 award — less than one overdraft charge — from the lawsuit.

"It's $4.5 billion that's gone missing from people's accounts," Himmelstein said.

Hutt said only 46 customers filed formal objections to the settlement and 350 decided to opt out, meaning they could take separate legal action on their own.

"It's very easy for people to say on the sidelines, 'I could do better,'" Hutt said. "Never is a settlement at 100 percent of what somebody thinks they can receive at trial. It's always a compromise."

Customers will receive a minimum of 9 percent of the fees they paid through the settlement, Hutt added. The bank has already paid the money into an escrow account.

The lawsuit claimed that Bank of America processed its debit card transactions in the order of highest to lowest dollar amount so it could maximize the overdraft fees customers paid.

An overdraft occurs when the account doesn't have enough money in it to cover a debit card transaction. Similar lawsuits have been filed against more than 30 other banks.

Despite the settlement, Bank of America insists there was nothing improper about the processing sequence. New regulations enacted following the recent financial crisis prohibit banks from charging overdraft fees on debit cards without first getting customer permission.

Many of the objections concerned the fees for the team of class-action attorneys, which would amount to about $123 million. Lawyers for people opposed to the settlement said that amount should be cut down by at least $50 million, with the money going back to the wronged customers.

"The best use is to provide compensation to the class members," said Elliott Kula, who represents some of the objectors.

But King sided with the plaintiffs' attorneys, noting that they spent thousands of hours on the case and achieved "a superb result" for the customers.

"I don't see anything about this case that's simple or garden variety," the judge said.

Another complaint concerned missing records for customers from 2001 through 2003, which has made them impossible to identify. The settlement will take about 14 percent of the total — representing an estimate for the fees paid by those customers — and put the money into nonprofit financial literacy programs.

In addition, the 32 original named plaintiffs who represented the larger class will get bonuses of up to $5,000 each, $2,500 each if both plaintiffs are a married couple.

Bank of America Forecloses Over ONE DOLLAR (and less!)

2011-11-06T09:37:00.000-08:00

It is really time for Brian Moynihan to resign.

The Bank of America makes mistake after mistake, it is also time for them to be closed down or broken up.

They are NOT too big to fail.

Congratulations to all who have closed their accounts!

But now, read this, the latest Bank of America misadventure:

"Shantell Curtis and her family were threatened with foreclosure months after they had sold their Vernal, Utah house. What's more, the problem revolved around a single dollar. Months after the Curtises sold and moved out of the home in August of last year, their lender, Bank of America, sent them a foreclosure notice.

Bank of America claimed the family owed months of missed mortgage payments, before realizing a $1 coding error had held up the Curtises' title transfer. While BofA has taken months to resolving the issue, the Curtises' credit report has taken a beating since then.

The episode is far from the first foreclosure mishap BofA has dealt with in recent months, and not even the smallest dollar amount related to foreclosure threats. In June, BofA tried to foreclose on a man living in Massachusetts over a missed mortgage payment totaling $0.00."

Bank of America Retreats on $5 Fee!

2011-11-01T09:45:00.000-07:00

November 1, 2011: About a month ago, Bank of America angered many of its customers by announcing that it intended to begin charging a $5 monthly fee to some customers who uses debit card. The fee would be created to fill a $2 billion a hole left by 2010's Dodd-Frank financial regulation bill. One provision would cut its revenue from debit card interchange fees (paid by merchants).

Today, the petulant Bank of America announced a reversal; they have scrapped their plans for the fee!

The Fallout

When customers learned about Bank of America's new proposed fee, the reaction was swift.

Banks don't accept billions of dollars of PROFIT (that's after huge salaries, bonuses, and parties) as enough. Congress passed laws to prevent them from ripping off customers with esoteric policies, so instead they just come out and charge a fee.

So maybe banks really do listen to their customers. Will they escape new fees after all? That isn't likely. These banks still have the same costs of business to pay for and shareholders to pacify. Anyone who think that banks will just shrug as Congress attempts to cut their revenues by billions of dollars is rather naïve.

The Problem With Transparency

On some level, the situation here is almost ironic. For the past few years, Congress had chastised banks for having too many hidden fees. For example, politicians complained that overdraft fees were unfair, so they made new laws limiting them. In the case of interchange, they said that the fees hid the real cost of a debit card transaction, so Congress cut them.

Bank of America and others intended to respond to this change with a very transparent new fee: a direct fee on customers who use debit. Shouldn't this cause Washington to applause? Not so much. The author of the debit card interchange fee regulation, Sen. Dick Durbin (D-IL) criticized Bank of America, calling the new fee "outrageous." But isn't this exactly what he wanted?

Remember, Bank of America could have acted differently. It could have tried to skirt new regulations by putting in place new, creative, sneaky fees that customers didn't realize they were paying. Perhaps they could institute a "card issuance fee" of $25 every time they sent you a new debit card. Certainly, there are lots of ways to make fees that are not particularly transparent.

But Bank of America didn't take that route. It effectively said, "Okay, we are losing revenue from interchange. So to make that up, let's be super-transparent and tell our customers that they'll have to pay a small monthly fee for using their debit cards." And then their customers flipped out. So much for clarity!

But Banks Will Get Their Money

This is an unfortunate story, because Bank of America and others are being condemned for finally providing the very transparency its critics called for. In the past, you just didn't use to see banks respond to regulation in such a direct manner.

That could be in large part because they suspected that customers would get annoyed if they learned that new fees were coming. Clearly, they were correct. So a rational reaction would be to hide these fees instead -- at least then only some customers will get angry when they get hit with the fees, and the impact will be delayed and spread out over time. When a bank instead announces a new fee that lots of its customers are subject to, it gets a sharp, widespread negative reaction. No wonder so many fees are opaque.

We'll have to wait to see how banks end up making this money if not through a new debit fee as initially planned. But make no mistake: they will find a way to make up this money. They need to lure top bankers and management at salaries the market dictates. They need to continue to pay employees at thousands of retail branches. They need to spend billions of dollars on technology. They need to turn a profit that meets investor expectations. When Congress shakes its finger at banks and writes new rules, their costs don't simply disappear. The real shame is that future fees might end up being less transparent. Because let's face it: no consumer has ever met a fee he or she liked.

Brian Moynihan: Most Hated Man in America?

2011-10-28T17:00:00.000-07:00

They can only be the one percent so long as we keep feeding them our money.

I would have to imagine that any list of "to-be-guillotined jerks" would include Bank of America CEO Brian Moynihan.

He's smarmy, in the way that makes regular folks like my mom want to reach across the table and slap the snot out of him. He combines this elite mix of arrogance and ignorance that allows him to function as a CEO while living in a world where no one, and I mean no one, seems to want to call him out on his bad decisions and incredibly obtuse statements.

Showing that he has absolutely no loyalty to his customers, Moynihan and BAC has decided to tack on a $5 a month fee to anyone who uses one of their debit cards during the month. Why? Because Congress found that banks were charging astronomical, arbitrary fees to retailers who allowed consumers to use debit cards. When Congress figured out what was going on, they passed a law limiting those fees.

Now they want to tack on a $5 per user fee to their debit cards, not to recoup the costs of the processing program, but simply because they are gluttonous monsters who feel they can do whatever they damn well please.

"After years of raking in excess profits off an unfair and anti-competitive interchange system, Bank of America is trying to find new ways to pad their profits by sticking it to its customers," Senator Dick Durbin said in a statement Thursday. "It's overt, unfair and I hope their customers have the final say."

It's worse that just padding their profits simply because they can. They are doing so just months after the company took a giant bailout loan from the U.S. taxpayer. Can you even imagine the gall? Could you imagine taking a life-saving loan from a friend, and then, once you're back on your feet, you charge him money to use anything?

It's not like the banks are losing money on debit cards. They still make money off the deposits in those accounts, which with fractional banking, is an obscene amount of profit. They still can charge $0.24 per transaction to retailers...just not the $0.44 they were charging before. The excuse that they need this money and therefore can justify no-lube sticking it to their customers is just pure, unadulterated crap.

Not to worry. America's favorite hackers have uncovered the personal details of one Brian Moynihan. Want to file a protest with him? Mail it to his residence at 26 Wachusett Rd., Wellesley Hills, MA 02481. Or perhaps you want to call and let him know his $5 fee is a crock and that you're switching banks. If so, try him at (781) 235-1004. Just be polite and let him know I sent you.

Now, it's probably illegal to actively encourage a bank run *wink wink*, but if a lot of folks who banked with a jackass zombie bank like Bank of America JUST HAPPENED to close their account at the same time, on the same day, that would certainly get their attention, wouldn't it?

Well, Moynihan clearly needs to be smacked across the face with that clue by four, doesn't he? Perhaps Americans will empty out their bank accounts at Bank of America and instead deposit those funds in a local credit union. Why a credit union? There are a number of reasons, actually.

Credit Unions are owned by their members. When you make a deposit into a credit union account, you're actually becoming a member, an owner...and not a customer. Because credit unions are owned by the very people who use the services, the fees are low or minimal. You will be hard pressed to find a credit union that would ever charge anything as outrageous as Bank of America's $5 fee.

Credit unions are also non-profit entities. While banks suck away every penny they can get their grubby little hands on, credit unions focus on service within the community. While a bank will gladly hike fees to increase profits, credit unions have a structural incentive to keep fees low. I mean, would you raise your own rent? Of course not!

Which brings me back to the original point. Why on earth would you keep your money in a bank when a credit union is a better deal? This is doubly true when you consider what your money is funding. Money kept in banks like Bank of America go right toward the profits that line the pockets of scumbags like Moynihan, who take and take and take, and have no idea how to give back to society in any meaningful way.

In the meantime, activists have set up a date to make your political statement with your money. On November 5, 2011, close your account at Bank of America and other large, destructive banks, and instead deposit that money in a local credit union account. If it happens to harm their bottom line, you can bet your bottom dollar we the people won't stand for bailing them out again.

Bank of America: Bailed Out Again?

2011-10-26T09:11:00.000-07:00

The Obama administration says the Dodd-Frank financial reform law ends "too big to fail", meaning that no financial institution will again need to be bailed out. The promise is alluring, but it's already proving to be false.

The argument rests on the premise that bank capital is high enough to withstand shocks, so a calamity is less likely. It also assumes Dodd-Frank's resolution authority allows global financial institutions to be wound down in an orderly fashion, and that the law's call for "living wills" ensures that banks provide all the technical details regulators might need to take prompt pre-emptive action.

Consider the law's promise in the context of Bank of America. Through the back door, US regulators are facilitating another round of implicit bailouts, putting more taxpayer money on the line in the form of guarantees. Bloomberg Regulators has allowed the bank to move highly risky derivatives contracts - and the associated downside risk - from Merrill Lynch into the insured retail deposit-taking part of the bank.

The move puts the Federal Deposit Insurance Corp on the hook for any losses. The FDIC's deposit-insurance funds come from its member banks, but because the agency can tap a US Treasury line of credit if the fund runs dry, taxpayers could be at risk, too.

This condones the continuation, or perhaps escalation, of taxpayer-backed gambling on a grand scale - and by people who aren't very good at it. The US is heading in the direction of Europe, where state-backed banks repeatedly bring everyone to the brink of disaster.

Bank of America is a behemoth beyond control. Its destruction of shareholder value is shocking. The Wall Street Journal reported on October 19 that the bank has spent $US148 billion on acquisitions since 1998 and its value is $US65 billion.

Bank of America is also badly managed. In 2008, its chief executive, Ken Lewis, agreed to pay $US4 billion to buy Countrywide, a disastrous foray into mortgage origination and distribution that will probably end up costing shareholders more than $US60 billion. The New York state Attorney-General, Eric Schneiderman, is calling for a full investigation of mortgage abuses; Countrywide must be very much in his sights.

Lewis bought Countrywide after a year's worth of due diligence and then grabbed Merrill Lynch over a weekend in September 2008, apparently without much thought. Significant extra losses were the result.

Why the FDIC would agree to escalate taxpayer subsidies is a puzzle. The Federal Reserve apparently pressed for this move, which required an exemption from the usual rules. This outrage demands investigation.

Does Bank of America have enough capital to avert disaster? It has $US2.2 trillion in assets, making it the second-largest bank in the US. The book value of its tier-one common equity is about $US117 billion - hardly a robust buffer against the shocks that appear likely from mortgage litigation and the European debt disaster. Investors believe that much of this capital will be wiped out - hence the lower market valuation.

A large chunk of its most recent profit turns out to be due to the decline in the market value of its debt because investors realise it is in so much trouble.

If the bank really had enough capital, it wouldn't have needed to move its derivatives risk on to its FDIC-insured deposit business. Nor would the Obama administration be resisting the New York Attorney-General's efforts to organise a full and fair mortgage settlement.

Could the resolution authority be used on the bank? Definitely not in a way that would bring calm to the markets. Merrill Lynch is a global business and the resolution authority is domestic. Legal and financial experts agree that the Dodd-Frank resolution authority doesn't help manage the orderly liquidation of a global bank.

There could be a conservatorship, but that is just a long word for full creditor bailout. Or there could be a bankruptcy, with the kind of collapse seen after Lehman's failure. Those are the choices.

Could the living-will provision make a difference? The FDIC claims it would have handled the problems at Lehman differently if the Dodd-Frank powers had been in effect. But the essence of the argument is that the FDIC would have acted before the problems got out of control. Given the politics of the regulatory process and the predisposition of Treasury not to act early, I am sceptical.

So here is a fair test for this part of Dodd-Frank. Bank of America should be broken up, spinning off Merrill Lynch along with other structural changes. Will the regulators pursue this course of action? Breaking up the bank would be good for the country, should help stabilise the financial system and could even create value for its shareholders.

Such an action would draw support from the right and the left.

Bank of America should be forced to break itself up. Make the pieces small enough and simple enough to fail. Then let the market decide.

Bank of America: Being Difficult in Florida

2011-10-25T09:45:00.000-07:00

Bank of America is poised to make it increasingly difficult for their legions of customers to waive the hugely unpopular $5 debit card fee, which is to go into effect next year. The second-biggest bank in Central Florida is to eliminate its Advantage checking program, which required no more than $5,000 in overall deposits in order to see the $5 fee waived. As of now, it will require at least $20,000 in order to enjoy the same privilege, forming part of the bank’s new ‘Premium Solutions’ offering.

However, customers who currently hold a mortgage with Bank of America will also be able to waive the fee, according to official reports.

Bank of America CEO Brian Moynihan spoke about the new move, stating that the increase in required deposits is designed to encourage customers to bring more business to the bank. This of course contradicts the millions who have labeled the new initiative as nothing more than profiteering, which is something the bank refused to respond to.

Bank of America has approximately $6.8 billion in Central Florida deposits and the fear now is that it will be those least able to afford the debit card fees who will be hit the hardest in order to further profit the bank.

Bank of America: Shut Down by Protestors in Washington, DC!

2011-10-24T18:38:00.000-07:00

WASHINGTON, DC (October 24, 2011) — Two groups of demonstrators have staged protests at Washington banks, railing against profits by the banks in the current economy.

The first protest Thursday at a Citibank branch in northwest Washington was led by demonstrators who have been camping in the city’s Freedom Plaza since Oct. 6. Earlier this week, Citigroup Inc. reported its third quarter rose 74 percent.

Another group of about 30 demonstrators from the Occupy DC movement, which has been camping in McPherson Square, marched to a Bank of America branch later in the day. The group chanted “banks got bailed out, we got sold out” and “Bank of America, bad for America.” One person closed his bank account at the branch, saying he planned to take his approximately $8,000 to a community bank.

Bank of America: Shut Down in San Diego!

2011-10-22T04:48:00.000-07:00

Downtown's Bank of America branch on B Street shut down early on the afternoon of October 20 out of safety concerns: approximately 25 protesters, most part of the Occupy San Diego movement, staged a peaceful “teach-in” and protest in front of the bank.

For roughly three hours, several protesters talked to anyone who would listen about how big banks like Bank of America helped to perpetuate the current economic crisis and accepted large bail-outs at the expense of taxpayers.

Protesters chanted, “Remember, remember, the fifth of November,” the date on which thousands of people nationwide have pledged to close their accounts with large banks and transfer their funds to local credit unions.

“Corporate greed has taken over politics,” said one of the protesters, Christopher McKay. “The banks got bailed out, the CEOs made millions of dollars, and the American people got left behind. The American people need to understand that financial security with big banks is not safe. These banks gave bad loans out on purpose. We are coming to a bank near you.”

McKay and his fellow protesters covered the bank’s entrance with signs that had a variety of messages and calls to action. Many protesters stood on the edge of the sidewalk with their signs, garnering honks of support from many who drove by. Several police officers were onsite throughout the protest but did not interfere.

Corbin, a younger protester attending the event with his siblings, said he felt compelled to take to the streets because he is “tired of the banks controlling where the wealth goes.”

Organizers planned to be at Wells Fargo’s downtown location Friday and intended to continue targeting other banks.

Bank America Refuses To Let Customers Close Accounts

2011-10-16T15:54:00.000-07:00

The Bank of America refused to allow customers to close their bank accounts Saturday, October 15, 2001, because they were members of Occupy Santa Cruz. Management at the bank told the two women who attempted to close their accounts that they could not be protestors and customers at the same time. Ok, read that again. You can't be a protestor and a customer at the same time! Since when can a bank, who is holding a person's money, tell said customer when they are allowed to be a customer?

The women where threatened with arrest if they did not exit the bank. Incredibly, after the women called the police on the bank, an officer spoke with management and came out to speak with the women only to reiterate and agree with their prior statement. Amazingly, Bank of America was not the worst bank on the customer service meter on Saturday. Citibank actually had quite a few of its customers arrested for attempting to close their bank accounts. Protestors who arrived at the bank where arrested for disorderly conduct.

Bank of America DOWNGRADED by Fitch Ratings

2011-10-13T15:24:00.000-07:00

October 13, 2011: Fitch Ratings has placed Bank of America Corporation's Viability Rating (VR) of 'a-' on Rating Watch Negative.

The firm said the drivers for placing BAC's VR on Rating Watch Negative center on heightened uncertainties regarding capital market and economic conditions and implications for future performance.

Fitch also said ongoing size of pending litigation risks relative to other firms and comparatively weaker capitalization are concerns. Litigation risks include the following:

Fitch's uncertainty regarding court approval of the June settlement related to Countrywide RMBS Securities, more recent AIG and FHFA lawsuits, ongoing MBIA and State Attorney General litigation, as well as other potential legal issues.

In addition, BAC's loan exposure to the U.S. residential real estate market remains a concern to Fitch, particularly given the potential for continued pressure on real estate values combined with economic uncertainties.

Finally, there are concerns about the heavyhanded and inept collection practices of Bank of America subsidiary, FIA Card Services.

Bank of America Launches "Irrelevant" Advertising Campaign!

2011-10-11T18:44:00.000-07:00

Bank of America Corp, under fire for everything from improper foreclosures to hiking debit card fees, is fighting back with advertising.

The bank is running TV, print and online ads through the end of the year in 12 larger markets, including Charlotte, Boston, Chicago, New York and Los Angeles, as well as some smaller communities, said bank spokesman T.J. Crawford.

The ads describe the bank's charitable donations and small business loans, as well as its efforts to ease loan terms for underwater mortgage borrowers, known as "loan modifications."

"The campaign aims to deliver the facts about Bank of America's local impact," Crawford said. "Sharing the significant work we do at the local level and critical role we play is more important than ever."

Bank of America's critics were not impressed.

The ads are "irrelevant," said Kathleen Day, spokeswoman for the Center for Responsible Lending, a Durham, North Carolina-based nonprofit that advocates for homeowners. "The only thing that matters is that they and other banks clean up their servicing operations so they can do more loan modifications and never do the same thing to the economy again."

Bank of America and other banks launched similar campaigns when they faced criticism in 2009 for taking government bailout dollars.

Large banks have paid back that money but face continuing outrage over their mishandling of foreclosure paperwork, new fees they are charging consumers, and the continuing economic fallout from the financial crisis. BofA's CEO, Brian Moynihan, had a bad day when "gotcha journalism" confronted him with the abusive collection practices used by an agency paid with bailout dollars. Moynihan, to his credit, promptly fired the agency but failed to answer the question as to why the agency had been retained in the first place.

The "Occupy Wall Street" movement has spread from New York to other cities around the country, including the bank's hometown of Charlotte, North Carolina.

Bank of America Announces Maryland Layoffs

2011-10-08T08:40:00.000-07:00

Twenty employees at the Bank of America home loans office at 5300 Westview Drive, Frederick, MD 21703 will lose their jobs beginning Nov. 7, 2011.

Scott Wallace, manager of the Dislocated Workers Service Unit, Maryland Department of Labor, Licensing and Regulation, said the state was notified on Sept. 27 of the personnel cuts.

"They are the only cuts in Maryland by Bank of America," Wallace said Friday. Bank of America said it is cutting 40,000 jobs in the next two years.

Rick Simon, a spokesman from Bank of America's mortgage loan operations center in California, said the office in Frederick was closed as a result of the challenging economy and a move to consolidate mortgage loan offices.

The company is looking at a nationwide market of $1 trillion to $1.1 trillion compared with $1.5 trillion last year, Simon said.

"We have to align our capacity to the current environment and create efficiency," he said.

While most banks have a central office for mortgage loans, Bank of America had a regional approach, Simon said. The Frederick office won't be consolidated into another office, but existing loans will be handled by another office in the region. Simon did not know specifically which office would handle local loans.

"The consumer will not see any difference," Simon said. "The loans will continue in the time they were contracted for."

Employees who will lose their jobs at the home loans office at Westview Drive are being encouraged to apply for openings at Bank of America locations, Simon said. But with the tight market in the banking field it could be difficult to find an opening locally, he added. Simon did not know of any other specific layoffs in the Frederick area at this time.

The bank has three commercial banking locations in Frederick: 31 W. Patrick St., 1070 W. Patrick St. and 805 W. Seventh St.

"We will meet them and let them know their options," Wallace said of the state agency and the dislocated employees.

Bank of America has been in the news recently for announcing it will charge $5 a month to customers for using debit cards. Customers have also been unable to log onto their accounts for a week as technical problems continue on the bank's electronic network.

Based in Charlotte, N.C., Bank of America has 288,000 employees in 5,900 banking offices and serves 57 million customers in 150 countries.

Frederick County Workforce Services, which offers retraining programs and assistance in job searches, was aware of the layoffs.

"Although this is not good news for the Bank of America employees, there is other good hiring news," said Laurie Holden, director of Frederick County Workforce Services.

A job fair is set for 10 a.m. to 2 p.m. Nov. 4 at the Monroe Avenue Campus of Frederick Community College, 200 Monroe Ave.

Frederick County Workforce Services, The Frederick News-Post and the college are sponsoring the job fair.

The area has seen a number of major layoffs, from 600 job losses at Alcoa Eastalco Works five years ago to 600 at JPMorgan Chase credit card center in 2010 and 320 at BP Solar in March.

Frederick County's unemployment rate was 6.3 percent in August and 6.7 percent in Frederick city. Maryland's rate was 7.4 percent. Statewide September unemployment figures will be released by DLLR on Oct. 21. Local rates will be released Oct. 28.

Bank of America Gives "Golden Parachutes" to Krawcheck and Price

2011-10-07T21:34:00.000-07:00

This is disgusting.

The Bank of America is ruining people's lives and taking their homes.

Even though Brian Moynihan may be moving in the right direction by getting rid of the likes of Price and Krawcheck, this really does send the wrong message.

It should come as no surprise that many people are calling for a boycott of the Bank of America!

Two ousted Bank of America executives, Sallie Krawcheck and Joe Price, will receive $6 million and $5 million, respectively, under newly signed agreements smoothing their departures from the bank.

The agreements came about a month after a management shake-up at the big bank led to the departure of Ms. Krawcheck, one of the most prominent women on Wall Street and president of the bank’s global wealth and investment management, and Mr. Price, a longtime Bank of America executive and president of its consumer and small-business division.

In the documents, signed on October 6, 2011 and filed with the Securities and Exchange Commission at about 4:15 p.m. Friday, both executives are promised “installment payments” equivalent to their annual base salaries — $850,000 apiece, paid out over the next year — as well as a “one-time supplemental lump sum payment” of $5.15 million for Ms. Krawcheck and $4.15 million for Mr. Price.

By contrast, Ms. Krawcheck received total compensation of $6.2 million last year and $1.9 million in 2009, according to the bank’s regulatory filings. Mr. Price received $917,027 last year and $6.1 million the year before.

In their final agreements with the bank, both executives agreed not to take jobs with competing companies or recruit Bank of America employees for a year. They also promised not to badmouth their former employer. Violating the agreement could let the bank cut off their installment payments.

The two agreements have a few curious differences. A sentence in Mr. Price’s reserves his “ability to bring an action to enforce the terms of this Agreement”; no equivalent language appears in Ms. Krawcheck’s agreement. Ms. Krawcheck’s agreement, meantime, twice explicitly reserves her right to indemnification, while Mr. Price’s raises the issue just once.

The two agreements are mum on the subject of cashing out equity awards to the two executives. Stock options and restricted stock often make up the biggest rewards for executives shown the door, and previous Bank of America filings suggested Ms. Krawcheck could receive as much as $4.6 million from cashing in stock she held as of the end of December.

Bank of America: Wall Street Loser!

2011-10-03T19:13:00.000-07:00

October 3, 2011: Citigroup (C) and Bank of America (BAC) were the big losers among large U.S. financials Monday, with shares of both companies plunging 10%.

Citigroup closed at $23.11 and Bank of America closed at $5.53. Citi's shares have declined 49% since undergoing a reverse split on May 6.

Bank of America: Website FAIL

2011-09-30T12:16:00.000-07:00

Bank of America's homepage and online banking service were experiencing problems Friday, a day after the company said it would start charging a $5 monthly fee for customers who make debit card purchases.

A message on the bank's homepage said that page was temporarily unavailable, despite earlier assurances from the bank that the site had been fully restored.

Some customers who tried to sign onto their accounts were greeted with the message that the site was "operating slower than usual" and that the bank was working to restore service.

A spokeswoman for the bank, Tara Burke, said the site had been fully restored for the majority of customers but that some were still experiencing "sporadic" issues.

She said the problems with the website were not the result of hacking but declined to say what was the cause.

Burke said customers who couldn't sign onto their accounts still could bank via text message, at ATMs and at branches.

Bank of America, based in Charlotte, North Carolina, is the largest U.S. bank by deposits. It offers customers a free eBanking account if they do all their banking online and at ATMs. Customers are charged an $8.95 monthly fee for the account if they also use branch locations.

Many customers have expressed outrage at this new fee. Some have speculated that the Internet activist group "Anonymous" may have had something to do with the Internet outages. "Anonymous" has been named in similar incidents involving the Church of Scientology.

Bank of America: $50 BILLION Liability From Lawsuit

2011-09-28T05:19:00.000-07:00

September 28, 2011 {NEW YORK]: Bank of America's potential liability for bad mortgages - in the tens of billions of dollars - is well known. But Bank of America is haunted by other ghosts from the past (?) financial crisis. The most significant is a lawsuit arising from Bank of America's troubled Merrill Lynch acquisition.

This lawsuit, brought by Bank of America shareholders, claims that Bank of America and its executives, including its former chief executive, Kenneth D. Lewis, failed to disclose what would be a $15.31 billion loss at Merrill in the days before and after Bank of America's acquisition. The plaintiffs contend that this staggering loss was hidden to ensure that Bank of America shareholders did not vote against the transaction.

Bank of America disclosed this loss after Merrill was acquired. At the same time, Bank of America also disclosed a $20 billion bailout by the government. Bank of America's stock fell by more than 60 percent in a two-week period, a market value loss of more than $50 billion.

This episode also spawned a lawsuit from the Securities and Exchange Commission that Bank of America, Lewis and Joseph Price, the former chief financial officer, settled for $150 million. Judge Jed S. Rakoff of U.S. District Court in Manhattan approved the deal but complained that it didn't sufficiently penalize the individuals involved. The entire amount was paid by Bank of America with no liability for Lewis or Price. Rakoff called the settlement "half-baked justice at best."

Rakoff may see his wish for greater penalties granted. The New York attorney general's office has a lawsuit on the matter. More significantly, a lawsuit seeking about $50 billion was brought by some of the largest class-action law firms and is quietly advancing in U.S. District Court in Manhattan.

The plaintiffs contend that Bank of America engaged in a deliberate effort to deceive the bank's shareholders. According to the plaintiffs, who include the Ohio Public Employees Retirement System and a Netherlands pension plan that is the second-largest in Europe, Bank of America's senior management, including Lewis and Price, began to learn of large losses at Merrill Lynch in early November 2008, months before the deal closed.

Price met with the bank's general counsel, Timothy J. Mayopoulos, to discuss whether to disclose the loss - at the time about $5 billion - to Bank of America shareholders. Mayopoulos testified to the New York attorney general's office that while his initial reaction was that disclosure was warranted, he decided against it. Merrill had been losing $2.1 billion to $9.8 billion a quarter during the financial crisis, and so this loss would be expected by Merrill and Bank of America shareholders.

Plaintiffs in the private action and the New York attorney general's complaint claim that after this meeting, Price and other senior executives at Bank of America sought to keep this loss quiet and that Price in particular misled Mayopoulos.

Mayopoulos has testified that on Dec. 3, 2008, Price told him that the estimated loss would be $7 billion. Mayopoulos concluded again that no disclosure was necessary. Plaintiffs contend that Price misled Mayopoulos as the forecasted loss at this time had now grown to more than $10 billion.

The Bank of America vote occurred on Dec. 5 without Bank of America shareholders knowing about this gigantic looming Merrill loss, which was now about $11 billion. Mayopoulos has testified he was surprised at this higher number when he learned of it at a Dec. 9 board meeting. Mayopoulos sought to meet with Price about the new loss. The next day, Mayopoulos was fired and escorted out of the building.

The Merrill acquisition was completed on Jan. 1, 2009. Two weeks later, Bank of America disclosed for the first time that Merrill had suffered an after-tax net loss of $15.31 billion.

Bank of America has argued in its defense that the exact amount of the loss was uncertain during this time. Moreover, this disclosure was not necessary because Merrill's losses were within the range of previous losses and included a good will write-off of about $2 billion that was previously disclosed. The total loss was not material.

But if it is true that Price, with Lewis' assent, kept this information from Mayopoulos in order to avoid disclosure, this is a prima facie case of securities fraud. Would Bank of America shareholders have voted to approve this transaction? If the answer is no, then it is hard to see this as anything other than material information.

Plaintiffs in this private case have the additional benefit that this claim is related to a shareholder vote. It is easier to prove securities fraud related to a shareholder vote than more typical securities fraud claims like accounting fraud. Shareholder vote claims do not require that the plaintiffs prove that the person committing securities fraud did so with awareness that the statement was wrong or otherwise recklessly made. You only need to show that the person should have acted with care.

This case is not only easier to establish, the potential damages could be enormous. Damages in a claim like this are calculated by looking at the amount lost as a result of the securities fraud. A court will most likely calculate this amount by referencing the amount that Bank of America stock dropped after the loss was announced; this is as much as $50 billion. It is a plaintiffs' lawyers dream.

Bank of America is facing a huge liability from this claim. It is also facing even more liability for those who bought and sold stock during this period up until Jan. 15. In a ruling on July 29, the judge in this case allowed these claims to proceed against Bank of America, Price and Lewis. The judge had already ruled that the disclosure claim related to the proxy vote could proceed.

This case is on a relatively fast track, with an October 2012 trial date. Given the $50 billion claim looming over it, Bank of America will most likely try to settle this litigation. The settlement value appears to be in the billions. Firing your main witness - Mayopoulos - and escorting him out the door no doubt only increases the cost.

The case shows how regulators' actions can be supplemented by private actions. And if the plaintiffs win, this case may be the exceedingly rare event of directors and officers, particularly Lewis and Price, actually having to pay money personally to settle a securities fraud claim. If so, the two men would join the relatively few executives from the financial crisis who have been personally penalized.

Whatever the outcome of this case, it appears that Bank of America shareholders were sacrificed in December 2008 so that the Merrill deal could be completed. The bill may now be coming due for Bank of America.

Bank of America Employees Taunt A Customer

2011-09-27T19:43:00.000-07:00

A customer is suing Bank of America after he was allegedly locked inside a local branch during a bomb scare.

In the case of John Caughman versus Bank of America, Caughman alleges the bank failed to notify him of the danger and evacuations after a trip to the bank resulted in him being locked inside.

Caughman, who was in the safety deposit room area at the New Britain, Conn., branch, was unaware of the evacuation notices when he exited into the banking area. Instead, he discovered an empty bank that was surrounded by cops and the doors were locked. A bewildered Caughman called 911 and was told not to touch anything. A short time later, an operator called to inform him there was a bomb threat at the bank.

“We are aware of the lawsuit but cannot comment on ongoing litigation,” ejaculated a spokesperson for Bank of America.

No comment was available as to whether the bank is on Brian Moynihan’s “layoff hit list” or if any of Caughman’s accounts had been turned over to abusive debt collectors, such as GC Services, Northstar Location Service, Client Services or Marauder Corporation.

The amount of time Caughman was locked inside the bank is unclear but the lawsuit alleges it was sizable. “(P)laintiff was locked within the building for a considerable length of time until a police officer opened the front door and brought the plaintiff out of the building,” according to the civil complaint.

What is also unclear is how the plaintiff was unable to hear the sirens and the bomb squad if the bank was surrounded.

The attorney for Caughman, Steven DeMoura, only offered a terse comment, “I am sorry, but it is the policy of our firm to not discuss our client’s cases with the media. I wish I could be more helpful.”

After exiting the bank safely Caughman was subjected to taunts by the bank employees including “we forgot you were in there.” It’s these alleged exchanges that caused Caughman additional emotional distress. Caughman is suing the bank for emotional distress and false imprisonment.

According to the complaint, the bank was evacuated after a Bank of America employee reported a suspicious briefcase. Caughman is seeking punitive damages for negligence, false imprisonment and emotional distress, plus costs and medical expenses.

Bank of America: Targeted by Activists

2011-09-26T08:07:00.000-07:00

Activists have begun protesting Bank of America foreclosures using “street theater,” from leaving a vacant home’s trash on an executive’s doorstep to sneaking into a business breakfast to hand out anti-B of A muffins.

“We feel this is a fun way to raise our issues while using some levity and humor,” said Jason Stephany of MassUniting, one of the groups behind the protests. “We’re not trying to be confrontational. We just want to give a voice to those families who have been victims of foreclosure and predatory lending.”

Activists got the ball rolling a few weeks ago by sending letters to Bank of America CEO Brian Moynihan at his office and Wellesley home to demand the bank do more to prevent foreclosures.

Getting no response, protesters began sit-in-like demonstrations at local Bank of America branches, armed with signs and leaflets but not actually blocking bank operations.

Two MassUniting organizers upped the ante further on Sept. 13, sneaking into a Greater Boston Chamber of Commerce breakfast dressed as servers and handing out muffins reading, “Bank of America: Bad for America. Bad for Massachusetts.”

Robert Gallery — who’s both Bank of America’s Massachusetts president and the chamber’s chairman — was hosting the event.

“A few people who took muffins actually thanked our ‘servers’ before the chamber figured out what was up and asked us to leave — which we did,” Stephany said. “There was no confrontation.”

Activists next cleaned up the yard of an abandoned Malden home that BofA has foreclosed on, bringing bags of trash to nearest Bank of America branch.

“The home and the trash are now Bank of America’s property, so we feel we were just giving their property back,” Stephany said.

When the branch manager refused to keep the rubbish, protesters left it on the front steps of Gallery’s Beacon Hill home.

They also put up a mock eviction notice modeled on real foreclosure paperwork, but calling on Gallery and the bank to “halt all foreclosures and evictions.”

Stephany said the activists have targeted B of A because it’s the nation’s largest bank, but “most of our demands for Bank of America could be made to any financial institution. There’s certainly a lot of shared responsibility for breaking our economy.”

Bank of America isn’t applauding the street theatrics. It is to be noted that Bank of America, about to lay off 40,000 employees, may have ceased to care…

Bank of America Layoffs Begin In Investment Banking

2011-09-23T10:52:00.000-07:00

New York (September 23, 2011): The Bank of America (BAC) has laid off 13 investment bankers who courted business from industrial sector companies.

The dismissals were part of an initial round of 3,500 layoffs across the bank, and amount to 5% of the investment bankers who provide advice on mergers and acquisitions and other financing activities to industrial companies.

Following the initial round of 3,500 layoffs, Bank of America CEO Brian Moynihan announced he would eliminate another 40,000 jobs across the company over the next several years. Bank of America has been slashing expenses and selling businesses as its stock has dropped some 50% this year on concerns over the bank's multibillion dollar exposure to troubled mortgages underwritten by Countrywide, which Bank of America acquired in 2008.

Among the bankers let go were managing directors David Iwan and Egan Antill, according to the reports. Among Iwan's clients was Kennametal, a manufacturer of machinery parts based in Latrobe, PA.

Bank of America: DOWNGRADED by Moody's

2011-09-22T09:52:00.000-07:00

NEW YORK (September 22, 2011) -- Moody's has declared the era of "too big to fail" over.

In yet another blow to the financial sector, Moody's Investors Services announced the downgrade of Citigroup, Wells Fargo, and Bank of America -- three of the United States' top banks.

Among the primary reasons: the U.S. government is less likely to step in to save a troubled financial institution.

"It is more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute," Moody's wrote in its downgrade note of Wells Fargo's stock.

Moody's downgraded Bank of America (BAC, Fortune 500)'s long-term debt two notches to Baa1, Wells Fargo (WFC, Fortune 500)'s long-term one notch to A1, and Citigroup (C, Fortune 500)'s short-term debt one notch to Prime-2. Moody's offered a negative outlook for all three.

"While we disagree with their conclusions and we believe our ratings should be higher, to minimize any potential impact of this decision on our business, we have been managing our liquidity carefully and we have prefunded our planned borrowing needs for the year," said a Bank of America spokesman.

With the exception of embattled Bank of America, which saw its shares fall 4.2% following the downgrade, the other banks' investors appear to have largely shrugged off the news. Wells Fargo's shares edged up 1%, while Citigroup's stock slid 0.2%.

"We believe that less than 1% of Citi's funding will be affected by the Moody's decision and the downgrade will not affect the short-term and long-term funding of our bank vehicles," said a Citigroup spokesman.

Moody's said that the U.S. government might be more likely to allow a large financial institution to fail because it the contagion could be viewed as limited.

The ratings agency also cited Dodd-Frank legislation as a reason that the U.S. government could opt for failure. The post-financial crisis legislation gives the FDIC a method to liquidate failed banks and hand over losses to bondholders.

Bank of America received the steepest downgrade from Moody's because of its exposure to problematic residential mortgage loans. Still, the ratings agency commended Bank of America's leadership for its "significant improvements to its capital and liquidity positions."

Bank of America Layoffs "Baltimore Will Be Hit Hard"

2011-09-20T13:26:00.000-07:00

On September 19, 2011 Bank of America executives confirmed that they intend massive company-wide job cuts over the next two years, but employees at the Baltimore area’s leading bank continue to be left in the dark about how the plans will affect them.

“I truly don’t know” what the local impact will be, confessed William Couper, president of the Mid-Atlantic Region for the bank. “It’s premature to estimate” how many of the bank’s workers in Maryland will lose their jobs, he told Patch.

At corporate headquarters in Charlotte, NC, spokeswoman Nicole Nastacie said the company would be providing no geographic breakdown of the estimated 40,000 job cuts. The cuts will include all different business segments of the corporation, she said, and no single geographic area will be spared entirely.

The bank currently has about 2,000 employees in Baltimore City and Baltimore County, and about 4,000 statewide in Maryland, according to state Department of Business and Economic Development. Baltimore County, with about 1,200 Bank of America employees, has the highest concentration of company workers in any single county in the state.

Bank of America locations in the Essex-Middle River area, include branches at Windlass Drive and Eastern Avenue.

Most employees work in the bank's 189 retail branch offices across Maryland, although there is also a credit processing facility in Hunt Valley and a regional headquarters office in Rockville. The Hunt Valley facility already has seen job cuts this year—the bank announced in March that it would eliminate about 40 jobs there.

Michael Raia, a spokesman for the Maryland Department of Labor, Licensing and Regulation, said the agency is gearing up to respond to the job cuts despite the lack of any definitive information from Bank of America.

“The Maryland Department of Labor is watching the news, and staff from the Dislocated Service Unit will be available to provide rapid response if and when Bank of America makes public any plans for layoffs in Maryland,” Raia said.

“DLLR provides a full range of services to dislocated workers and job seekers, including initiatives designed to bolster new and incumbent worker skills to better compete in the new economy,” he said.

The confirmation Monday of the 30,000 cuts over the next two years follows disclosure last month the company is in the process of cutting some 6,000 jobs companywide in 2011.

Like the larger cuts planned for 2012 and 2013, Bank of America has refused to publicly disclose the geographic locations of the 6,000 job cuts, or comment on the local impact of eliminating jobs.

Bank of America, which by many measures is the country’s largest bank, employs a total of about 288,000 workers, according to recent company statements. If current plans are fully realized, the company will have eliminated the jobs of roughly 12 percent of its employees by the end of 2014.

Bank of America: Layoff Announcements Blamed For Poor Morale and Customer Service Decline

2011-09-19T11:06:00.000-07:00

Morale quickly turns ugly after a company warns about layoffs—even if the job cuts won't happen for a while.

Bank of America Chief Executive Brian Moynihan told employees in an internal email last week that "overall employment levels" at the bank would come down by 40,000 over the next few years.

He said managers have tried to send short notes to reassure employees but it seems they are nervous about their own positions. "They say it's going to be 40,000 over the next couple years. Does that mean that for the next several years we're supposed to wait for our number to be called?"

A Bank of America spokesman declined to comment.

Recruiter Mike Ramer said that many banking employees have contacted him this year looking to leave the industry altogether for finance positions in the corporate sector. He said smaller banks have been able to get top talent from large multinational firms, such as Bank of America, over the last few months because of perceived weakness there.

Bank of America, which is still suffering ill effects from bad mortgages, reported an $8.8 billion quarterly loss in July. Goldman Sachs officials in July said that the bank could lay off 1,000 employees by the end of the year and indicated that more cuts may come later. A Goldman Sachs spokesperson declined to comment.

It is more than likely that decreased morale will lead to a decrease in the quality of customer service, which is already rated very poor. At present, both the Bank of America and FIA Card Services are taking several months to answer customer inquiries about misplaced and misapplied payments, and customers report receiving correspondence indicating that the Bank of America will only respond to certain types of inquires in writing. These inquiries are to be directed to various PO Boxes in Delaware, which is rumored to be one targeted for a significant number of layoffs under Moynihan’s plan.

Bank of America: Foreclosures Increase In Orange County,CA

2011-09-15T15:10:00.000-07:00

Bank of America filed three times as many default notices on Orange County homeowners in August 2011 than the month before, helping to push the overall number of defaults in O.C. up 66 percent last month, according to new figures from DataQuick Information Systems.

Other lenders also increased their default filings – the start of the foreclosure process – although to a lesser degree. The B of A filings jumped 197 percent from July to August, compared to a 50.6 percent increase for all other lenders.

The increase was exaggerated slightly because August had three more business days than in July. But the numbers are up dramatically even after adjusting for the difference.

B of A default filings were up 44.4 percent on an annual basis as well, increasing to 374 in August from 259 in August 2010. By comparison, non-B of A filings increased 9.7 percent to 1,584, up from 1,444 in August 2010.

Countywide defaults were up 15 percent, rising to 1,958 in August from 1,703 in August 2010.

Bank of America Must Pay $930,000 and Reinstate Whistleblowing Employee!

2011-09-14T15:12:00.000-07:00

September 14, 2011: The U.S. Department of Labor said today that it ordered Bank of America Corp. (BAC) to rehire and pay $930,000 to an employee improperly fired in a whistleblower case.

The worker reported "pervasive wire, mail and bank fraud" involving employees at Countrywide Financial Corp., the mortgage lender acquired by Bank of America in July 2008, the government said. The bank was ordered to pay back wages, damages and attorneys' fees.

"It's clear from our investigation that Bank of America used illegal retaliatory tactics against this employee," said David Michaels, assistant secretary of the Labor Department's Occupational Safety and Health Administration. "This employee showed great courage reporting potential fraud and standing up for the rights of other employees to do the same."

The Los Angeles-area employee, whose name wasn't disclosed, was fired shortly after the Countrywide acquisition became final, the government said.

Bank of America said in a statement that it is "disappointed with the ruling and plans to exercise our option to challenge the order." The bank said its decision to fire the employee was "solely based on issues with the employee's management style and in no way related to the employee's complaints and the allegations made in the complaint."

Bank of America has faced mounting troubles related to the bank's acquisitions of Countrywide Financial. in 2008 and Merrill Lynch & Co. in 2009. The Charlotte, N.C.-based bank has faced numerous lawsuits from private investors and the federal government, alleging that the bank failed to fully disclose the risks of mortgage-backed bonds sold to investors.

Earlier this year, a criminal probe of Angelo Mozilo, former chief executive at Countrywide Financial Corp., was closed without charges being filed. The investigation was led by the U.S. Attorney's office in Los Angeles. Last year, Mozilo agreed to pay $67.5 million to settle civil-fraud charges filed against him by the Securities and Exchange Commission.

Bank of America: Layoffs Pay Legal Bills?

2011-09-14T05:35:00.000-07:00

NEW YORK (September 12, 2011)-- Bank of America's announcement that it plans to shed 40,000 jobs doesn't address the bank's most pressing concerns, experts said Monday.

The job cuts come as part of a last ditch initiative by Bank of America CEO Brian Moynihan known as Project New BAC, the first phase of which aims to save $5 billion in annual costs by 2014, the bank announced Monday. But shareholders have been preoccupied in recent months with something other than overhead costs -- namely, the lawsuits from investors and government regulators that potentially threaten the bank with billions in losses. The company's stock price has fallen about 50 percent this year as speculation has swirled that it doesn't have enough capital to defend against losses, despite the bank's persistent statements to the contrary.

But experts say Project New BAC, which also included a shake-up of top management, doesn't address these legal concerns -- and say it may be for naught.

"What Bank of America should be doing is spending all their energy cleaning up legacy liabilities," said Manal Mehta, a partner at the San Francisco-based hedge fund Branch Hill Capital. "At this point, whatever progress they make in streamlining the company could easily be overshadowed by the loss of a critical legal ruling."

The layoffs and other cost-cutting measures, Mehta said, may turn out to be "pointless."

Bank of America spokesman Jerry Dubrowski objected to that characterization, saying the issue of legal liabilities shouldn't be part of an assessment of the effort to cut costs.

"If anyone is trying to connect Project New BAC to litigation, they are missing the point. This isn't about that," Dubrowski said. "This is about making the company a simpler company, a more efficient company and ultimately a more profitable company."

The bank has been plagued over the past year by lawsuits largely stemming from its 2008 acquisition of Countrywide Financial, the subprime mortgage lender that sold loans investors say didn't meet basic standards. Such legal costs turned what would have been a profit into a record $8.8 billion loss during the second quarter of this year, as the bank set aside money to settle claims.

And the legal woes aren't over. After the bank announced it had struck a deal for an $8.5 billion settlement with investors this summer, New York Attorney General Eric Schneiderman moved to block the settlement, saying another bank involved in the mortgage transactions had behaved improperly. Another state attorney general, a group of investors and a federal regulator also lodged complaints.

Bank of America, the nation's biggest bank by assets, is also in talks with all 50 state attorneys general and a host of federal agencies to resolve allegations that it illegally foreclosed on homeowners. The penalty being discussed for the group of big banks in those talks could be around $20 billion, The Huffington Post reported in June.

In August, the insurance company AIG sued Bank of America over losses on $28 billion of mortgage securities, seeking $10 billion. And early this month, the Federal Housing Finance Agency sued the bank on behalf of the mortgage giants Fannie Mae and Freddie Mac, seeking compensation on tens of billions in mortgage investments that went sour.

Bank of America chief executive Brian Moynihan spoke about legal threats during a conference with investors Monday in New York.

"It wasn't unexpected that people would intervene," he said of the $8.5 billion deal that was held up this summer. "We will put this settlement through the court systems. As we told you back when we made the settlement in June, that settlement will take 12 to 18 months from that time frame to get final."

But the chief's words, and the bank's subsequent statement about Project New BAC, drew criticism from some finance professionals.

"The money he's talking about saving wouldn't even pay the lawyers," said Christopher Whalen, managing director of the financial research firm Institutional Risk Analytics.

In a report from IRA, Whalen argued Monday that Bank of America must be restructured in order to resolve the legal claims. The parent company should be placed in bankruptcy, wiping out shareholders and replacing them with bondholders, he added in an interview.

"No amount of layoffs or other cost-savings by the management of BAC will resolve the crisis of confidence affecting the bank," Whalen wrote in the confidential report, referring to Bank of America by its stock ticker symbol.

Project New BAC aims at "delivering long-term value for shareholders," the bank said in its Monday release. The company has also been selling assets this year, earning several billions on those transactions.

Job cuts are set to happen over "the next few years," the bank said. The cuts represent more than 10 percent of its total workforce as of the end of June, according to a recent filing with the Securities and Exchange Commission.

Bank of America's declaration that it would cut 40,000 jobs was the biggest single workforce reduction announcement by a U.S.-based employer so far this year, according to a Monday report from the consulting firm Challenger, Gray & Christmas.

It dwarfs the nearly 11,000 job cuts announced by the Borders bookstore in July, and it's the largest planned cut since the U.S. Postal Service announced 30,000 cuts last year, Challenger said.

But it may not be enough to give investors faith in the bank. Bank of America shares hardly budged after Moynihan's conference Monday morning, and then slumped downward in the afternoon as the Standard & Poor's 500 Index declined. The stock ended the day 1 percent above Friday's close.

This type of cost-cutting is fundamentally misguided, said Amar Bhide, a professor of international business at the Fletcher School of Law and Diplomacy at Tufts University. It addresses only known costs, Bhide said.

"The only costs you're taking into account are the upfront costs, not the costs of things going bad," he said. "In finance, the costs of things going bad swamp the upfront costs."

Bank of America To Cut 40,000 Jobs

2011-09-12T10:04:00.000-07:00

September 12, 2011: Bank of America Corp. is preparing to slash 40,000 or more jobs nationwide, a dramatic retrenchment that reflects the deepening woes of the country's largest bank and the magnitude of the U.S. economic slowdown.

The layoffs will come mainly from the BofA's sprawling consumer-banking operations, which will take a heavy toll on branches, loan centers and other offices throughout California.

Bank of America has 45,000 employees in the state, about 1 in 6 of its nearly 300,000-person workforce, and is expected to roll out the job cuts over the next several years. The company, which for years was based in San Francisco and maintains its huge mortgage unit in Calabasas, also is in the process of closing 10% of its branches nationwide.

California has the highest concentration of BofA branches in the U.S. with 956 throughout the state, though it has been losing ground in recent years to rivals like Wells Fargo & Co. and JPMorgan Chase & Co.

The layoffs are another blow to California, with its battered economy and nearly 12% unemployment rate. From tellers to middle managers, laid-off Bank of America employees are likely to have a tough time finding new jobs.

The details of the cutbacks were not officially announced, but the information was disclosed by three Bank of America executives who have been briefed on the plan but were not authorized to speak publicly. Brian Moynihan, Bank of America's beleaguered chief executive, is expected to unveil details at an investor conference Monday in New York.

Executives met at the bank's Charlotte, N.C., headquarters Thursday and Friday to finalize the plan, which has been under discussion for months. Moynihan is grappling with how to wring more profit from the bank's core customer base, which includes about 58 million consumer and small-business accounts.

At least one analyst said the cutbacks could weigh heavily on BofA's millions of Southern California customers, who would have to deal with fewer branches and longer lines for tellers.

Moynihan hopes to fashion a smaller but more focused company that can withstand the fallout from its disastrous 2008 takeover of mortgage lender Countrywide Financial Corp. in Calabasas. The home-lending unit has run up $30 billion in losses, and faces billions more in potential liability from a barrage of mortgage-related lawsuits.

COMMENTARY: Too little, too late. Even though some senior people are being laid off, the majority of the "victims" are decent, hardworking people, following the orders of BofA's greedy management. The Bank of America is one of, if not the largest, economic oppressors in the country. It should be forced to close, and many of its senior people should be investigated for criminal behavior.

Bank of America: Too Big To Obey The Law?

2011-09-11T13:09:00.000-07:00

It is high time something be done about the Bank of America, one of the biggest abusers of hardworking Americans!

If you’ve watched the collapse in Bank of America’s stock this past month, you’ve probably read that investors are concerned about the bank’s legal liabilities from the devastation of the housing market. Analysts usually cite the raft of lawsuits filed by just about anybody who had anything to do with the bank or Countrywide, which was bought by Bank of America when Countrywide was on the verge of bankruptcy. Analysts, however, don’t tell you the details behind these legal claims – what exactly did Bank of America do to earn its position as poster child for banking industry fraud? To the rescue comes a lawsuit filled with such details, from someone who has access to thousands of consumer complaints about Bank of America. The complaint was filed recently by the Attorney General of Nevada,Catherine Cortez Masto. You should take the time to read this lawsuit. It tells you in a comprehensive way what went wrong with the mortgage business from origination of the mortgage to foreclosure. But fair warning: be prepared to be nauseated. If Bank of America perpetrated even a fraction of the frauds outlined in this report, it raises a most serious question: why does this company still have a banking license?

Countrywide Sets the Tone

The first third of the complaint concentrates on the fraudulent activity of Countrywide Financial under its CEO Angelo Mozilo, before it collapsed and was bought up by a covetous Bank of America. Bank of America at the time of the purchase assured its shareholders that management had done thorough due diligence on Countrywide and that BOA was satisfied it had uncovered all the sins of omission and commission possibly perpetrated by Countrywide. It is evident now, as BOA is being dragged underwater by the weight of these sins, that management’s idea of “due diligence” seemed to consist of nothing more that reading the frothy “all is well” press releases that Angelo Mozilo was issuing until the very end.

Too bad BOA never uncovered the email Mozilo sent around to his executives, alerting them to growing problems in the mortgage portfolio, including the rising number of defaults and the difficulties borrowers were having with “payment shock.” BOA should have been concerned that Countrywide in 2003 had abandoned traditional fixed rate mortgages to sell more lucrative but highly toxic mortgages to customers that couldn’t qualify for traditional mortgages in the first place.

The three favorite mortgages at Countrywide were:

1) Option Adjustable Rate Mortgages, which were often marketed with a 1% teaser rate for the first three months. The consumer had the option to defer principal payments and only pay interest, but the deferred amount accumulated and compounded so that the mortgage developed “negative amortization”, which meant the loan balance grew to a size greater than the amount initially borrowed.

2) Hybrid Adjustable Rate Mortgages. These mortgages carried low introductory interest rates for the first two or three years, and then significantly higher interest rates for the next 28 or 27 years.

3) Home Equity Lines of Credit (HELOCs). Countrywide marketed these loans as “piggyback mortgages”, encouraging homeowners to borrow up to 85% of the value of their home on their first mortgage, and take out a HELOC for the remaining 15% of the value. The customer walked out the door signing away all equity of the home as collateral to Countrywide.

Countrywide set up a very aggressive marketing program for all three of these loans. Advertisements never mentioned anything but the opening, low rates. Brochures conveniently left out information about the payment shock which would occur when rates reset. Loan officers were not allowed to talk about interest rates at all during the initial conversation with a borrower, and nor was there any discussion of how much equity was going to be shifted over to the bank as collateral. By 2006, over three-quarters of Countrywide loans were “liar loans”, in which the homeowner’s income and asset information could be submitted without any verification whatever, such as pay stubs or tax returns. Often the loan officers made up these numbers out of thin air in order to get a loan approved. Countrywide played hardball with appraisers who did not inflate the value of homes under review; those who refused to play along were blackballed completely from ever dealing with the nation’s largest home loan lender.

That was the home loan side of things. Countrywide was also the nation’s largest mortgage servicer, for its own loans and those of many other banks, handling over $1.5 trillion in mortgages. Once the housing crisis hit in 2006, Countrywide found new and imaginative ways to defraud consumers by collecting “impermissible and inflated fees” from any homeowner in default or foreclosure or bankruptcy. Interest due was routinely overstated and never explained in detail. In four states where Bankruptcy Trustees looked into the matter, it was shown that Countrywide collected unlawful servicing fees.

The Federal Trade Commission investigated Countrywide’s compliance under the Deceptive Trade Practices Act (DTPA), and fined the bank $108 million for its various criminal acts. When Bank of America bought Countrywide, it wanted to put all these problems behind it, especially since they were much bigger and more serious than they thought at first. BOA negotiated a multi-state settlement, conceding that “Countrywide engaged in widespread consumer fraud in origination, marketing, and servicing.” The state of Nevada came to its agreement with BOA on February 24, 2009, in which BOA consented to make major changes in its servicing practices.

The complaint filed this week by Nevada is the third since 2009 in which the state alleges BOA has routinely violated the terms of this agreement. This new suit is also the most comprehensive in describing these violations, which also include the way BOA sold mortgages into the secondary market.

Bank of America Promises to Clean Up its Mortgage Business

Under the consent agreement with the state of Nevada, Bank of America promised that under its participation in the National Homeownership Retention Program, the bank would:

• Make the modification process streamlined,
• Decide on modifications within 60 days, on average,
• Not initiate or advance any foreclosures on homeowners seeking modifications to their mortgage.

Based on numerous complaints filed with the Attorney General of Nevada, the state’s lawsuit against Bank of America claims none of these promises was met.

The modification process was anything but streamlined. Consumers were required to submit proof of income, copies of tax statements including all attached schedules, an IRS tax form 4506-T (authorizing a tax transcript), a signed affidavit applying for a modification, and a signed letter identifying the financial hardship behind the request. Under the terms of some of the government modification programs, financial hardship was not a condition required for a modification. This was a bank, by the way, that was happy to extend these loans without any proof of income required from the consumer.

Once consumers submitted the required documentation, for many of them a nightmare began in which documentation would be lost by the bank as many as half a dozen times. The bank never told consumers documentation was lost; it was only discovered if the consumer called the bank to find out why the modification was taking so long. The bank would repeatedly tell consumers documentation was complete and under review, when in fact it was lost. These and other problems made a mockery of the bank’s claims, plastered all over its website and in written material, that the streamlined modification process would take less than 60 days, and in many cases “within 45 days”. Bank of America has refused to release its statistics on the average wait time for a modification decision, but the Nevada Attorney General believes the average to be well beyond 60 days.

While modifications were under review, or even if the documentation was lost by the bank, Bank of America proceeded in many cases to file for foreclosure against the applicants, even though this was strictly prohibited under the terms of the government programs involved. Consumers would receive letters of foreclosure at the same time they were told by the bank that modification was forthcoming. Employees working in the bank call center report numerous instances where they knew the home was in the process of foreclosure even though this was prohibited under the modification terms.

Consumers who were never late on a payment, and who sought a modification, were instantly labeled by the bank as a bad credit risk, and the credit agencies were notified of an adverse event that affected the consumer’s credit rating. It was also routine for the bank to hire collection agents to harass the applicants for payment if they were late on their mortgage obligation. One of the advantages to the bank of damaging a consumer’s credit rating or labeling them as delinquent and therefore subject to collection procedures, was that the bank could start accumulating missing payment fees and late payment interest charges. The Attorney General’s complaint cited a number of cases where the late fees and interest charges were so large, that the consumer lost the home to foreclosure anyway.

Consumers who were not late in making payments were routinely told that they could not proceed with an modification request until they deliberately failed to make a payment. This was definitely not a requirement under the government modification programs, but once a consumer stopped paying on their mortgage, the entire foreclosure process began in earnest, including compounding of late fees and other charges. In a number of such cases, these consumers ultimately lost their home to Bank of America under a foreclosure.

The bank said it made 20,000 modifications a month nationwide last year, but it won’t release data on how many applications were declined a modification. The Nevada Attorney General said that the decision process was opaque, and the reasons given for a refusal were often specious. If a request was denied, foreclosure was often the only option for the homeowner. The bank had any number of reasons to give when denying a modification. Consumers might be told that the investors owning the mortgage had refused to allow a modification, even though in most cases investors had authorized the bank to modify loans, and even though Bank of America had specific evidence in the consumer’s file that investors had waived their right to deny modifications for that specific mortgage. Another reason given was that the applicant had failed to file complete information; the complaint shows that in many such cases the applicant had filed the complete information required multiple times. On some occasions Bank of America denied modifications for incomplete information even though the only reason information was incomplete was because the bank had lost the file. One consumer was told his modification was denied because he had already received a modification, even though the applicant had rejected that modification because it was based on erroneous income information. In many cases the bank denied modifications because the applicant was “unable to be reached”, despite evidence in the file that the applicant had called the bank numerous times.

The denial of a modification usually allowed the bank to proceed with foreclosure. At the time of the Countrywide purchase, and when Bank of America entered into its consent agreement with the state of Nevada to clean up its mortgage servicing business, the bank knew that Countrywide had serious problems with its securitization process. Complaints had revealed that Countrywide hardly ever complied with the terms of the legal agreements governing securitizations, so that the trustee for the security rarely received the original note to the mortgages and never received any amendments or modifications to the note, as required.

Despite knowing this, since 2009 Bank of America, in the state of Nevada, has consistently foreclosed on properties for which it has no legal claim, according to the state Attorney General. The suit claims Bank of America “sought to enforce notes, engage in collection activity, pursue nonjudicial foreclosures, and defend foreclosures when it did not have the authority to act.”

Suppose a consumer was one of the few who received a modification. In many cases the modification involved an increase in the interest rate, which is yet another of the terms that are not permitted under the federal loan modification programs. Or, the consumer was allowed to go through mediation, which like arbitration, is one of those practices corporations are increasingly requiring to prevent consumers from suing in courts for redress. The Nevada suit claims, though, that Bank of America often did not show up at mediation hearings, or the people who came were unable to agree to mediation terms, or they didn’t have sufficient documentation in their file to discuss the terms. When the mediator got both sides to agree to a modification package, the mediator would discover months later that Bank of America never proceeded to grant the modifications. Some of these consumers therefore still went into foreclosure. A number of these mediators have reported to the state Attorney General that Bank of America “did not negotiate in good faith.”

What to Do About a Bad Faith Bank

The first defense Bank of America can make about its actions is that the Attorney General’s complaint consists of allegations. In other words, nothing has been proven yet. Except, the complaint cites several regulatory actions against Bank of America that have resulted in substantial fines being paid, even though the bank did not admit any guilt. It just didn’t want to go to court or to a jury trial. Second, this isn’t a complaint from a private party. The attorney general is in possession of thousands of complaints against the bank, complaints which have been investigated by the state, and for which the bank has no explanation or justification. The lawsuit is backed up by documentation from these thousands of consumers, by depositions, and other evidence. This isn’t some lawyer looking for an easy target and a quick settlement. This is, in fact, a state government that entered into an agreement with Bank of America on these same issues regarding mortgages and foreclosures, and has already concluded that the bank did not act in good faith.

Some of the observers who have had the stomach to read through all 48 pages of this suit – and it takes a good deal of fortitude to read about case after case of consumer fraud – think Bank of America is a criminal organization. Certainly you get the feeling that the bank operates in complete defiance of the law, of regulations set down in Washington, of the legal agreements it signed governing securitizations, of the promises it made to mediators, and of commitments it made previously to state attorneys general.

This week also saw two other complaints against Bank of America. The Federal Housing Finance Agency filed suit against BOA and 16 other banks, charging them with defrauding investors by lying about the condition of the mortgages included in mortgage-backed securities. The interesting thing about this complaint is that the allegations are about Bank of America’s behavior before it bought Countrywide, and when it was one of the large securitizers in the business. Separately it was revealed that HUD’s inspector general submitted to the Department of Justice evidence that many banks, including Bank of America, defrauded the government and consumers by forcing consumers to buy expensive home mortgage insurance, not revealing that the insurance provider was a subsidiary of the bank itself.

Adding all this up, you do get the image of a corporation which actively skirts, flouts, evades, and breaks the law. Does this mean that CEO Brian Moynihan meets regularly with his executives, or even his board of directors, to determine which laws to break next? No – nor is that necessary for one to conclude that the bank is a criminal enterprise. It is possible that the bank executives refused to hear the details of what their managers were doing, and winked and nodded at suggestions that the bank “stretch things” a little when it comes to the legalities.

But let us assume this is not the case. Assume that Moynihan and his fellow executives have every intention of following the law, and that they set a tone that should in normal circumstances encourage employees to follow the law and regulations to the letter and the spirit required. Even assuming this, something has gone severely wrong at Bank of America that still allows for egregious, fraudulent behavior. What could this be?

The large banks have admitted to serious errors in their mortgage servicing businesses. These businesses were sleepy underperformers before the housing collapse. They earned modest fees and modest returns for processing mortgage payments. Foreclosures were few and far between. They were grossly understaffed when the mortgage crisis hit, and they farmed out foreclosure and other duties to law firms that routinely broke the law with robo-signing and other techniques that jammed thousands of foreclosures through the system every week.

Having admitted all this, you would think an institution like Bank of America would devote top executive talent and the necessary hiring budget to fixing its problems. Whatever happens with the state of Nevada complaint, a bank lives and dies by its reputation, and cannot afford the reputational damage that is done when a high profile suit alleges consistent, deliberate criminal behavior. Bank of America has persisted in behavior that could utterly destroy its franchise.

This might be why shareholders have abandoned its stock, which has fallen over 45% in value this year. Given how the bank cannot afford continuing criminal behavior and the attendant law suits and reputational damage that results from this behavior, we have to conclude that the bank is incapable of correcting its fraudulent behavior. This may be because the bank cannot hire the right sort of people, or the cost of modifications is too high. This is certainly possible, because what is really needed are thousands of capable attorneys to handle all the modification claims and foreclosure legal requirements. It is also plausible that if the bank starts accepting modifications, it will need to write down billions in related first and second mortgages that would deserve similar treatment.

Another possibility is that the executives running the business are incompetent. Bank of America gave notice this week that this is something to consider, when it fired the executive in charge of Consumer Banking. Whatever the reasons, we come to the belief that Bank of America is Too Big to Manage.

Along with Too Big to Fail, we now have another reason to doubt whether Bank of America should be allowed to survive in its present form. And why wouldn’t the same conclusion be made for Wells Fargo, Citigroup, Chase Manhattan, Goldman Sachs and the other Too Big to Fail institutions? The same allegations have surfaced against these banks as well. Even the one bank supposedly above the fray of fraudulent behavior – JPM Chase, whose chairman insisted not one of its foreclosures was unjustified, was later forced to confess that by foreclosing on so many servicemen engaged in Iraq and Afghanistan, it violated the Service Members Civil Relief Act, which outlawed such foreclosures.

We would know a lot more about these other banks and their activities in the mortgage business if the attorneys general in other states were as conscientious as Catherine Cortez Masto. Lamentably, 46 state attorneys general have signed on to the effort of Attorney General Tom Miller of Iowa, who is attempting to come to some agreement with the banks regarding their role in the mortgage crisis. This agreement is said to involve a penalty of $20 billion or higher, and a commitment from the banks to cease their fraudulent behavior. Nevada has given up on this effort, as have officials in New York, Delaware, and Massachusetts. The banks have so far refused to accept any agreement until they get what they really want – a release “from all future liability for past mortgage practices and mortgage-backed securities they sold to investors”, according to some sources.

That the banks are pushing so hard for a blanket indemnity from all fraudulent behavior tells you that they must have a good deal of fraudulent behavior seeking absolution. They also feel in a strong enough position to demand it. Too bad these 46 attorneys general aren’t spending their time doing what Nevada has been doing – investigating the thousands of complaints many of them have received. Too bad there are so many of them that think the banks can be trusted to live up to their commitments once they get their blanket indemnity. Nevada has learned the hard way that Too Big to Fail also means Too Big to Manage, and Too Big to Obey the Law.

Bank of America, with its size and reach all across the United States, has proven itself to be a menace to the American economy. There are probably quite a few other banks its size which also pose a danger to the economic foundations of this country, which certainly rest in large part on respect for the law. Free market capitalism cannot survive if the major financial players disrespect, disregard and disobey the law.

President Obama should spend the hour it takes reading the state of Nevada’s complaint against Bank of America. It should be right up there with his national security briefing. If, after reading this, he still insists that Eric Holder remain in his job as US Attorney General, having done nothing for three years about these crimes, then Obama is owned by the bankers every bit as much as Congress. That would tell us that there are so far, at most, only four state attorneys general, plus a number of honest judges, bankruptcy trustees, and mediators, who are left standing up for the rule of law and the rights of the consumer.

Bank of America: Hired Racist and Criminal Debt Collectors With Bailout Money

2011-04-29T09:00:00.000-07:00

Two days after being confronted by a group of angry taxpayers, Bank of America has fired a debt collection agency after several of its operators were caught using racist and obscene phone calls to collect debts from bank customers.

"What's up, you f---ing n---r?" said one of the collection agents in a message to 32-year old Allen Jones of Dallas, who owed $81 on his Bank of America credit card.

"This is your f---ing wake up call, man," the debt collector said in a message left at Jones' home at 6:30 a.m.

In a message left a few minutes later, the debt collection agent told Jones, "You little, lazy ass bitch, get your mother f---ing ass up and go pick some mother f---ing cotton fields, bitch."

Jones said the calls continued even after he told the debt collection company he had paid his credit card bill.

"The representative acted like, oh, we can call you as many times as we want," Jones said in an interview with groups demanding greater accounting for the bailout dollars paid to the Bank of America.

The calls came from the Harlingen, Texas office of Advanced Call Center Technologies. ACT is a Philadelphia-based company that provides collection services for a number of major corporations.

Jones saved the taped messages and hired lawyers to sue ACT. A jury in Texas found the both the debt collectors and the corporation responsible and awarded Jones more than $l.5 million.

Debt Collector Had Served Time In Prison

In the course of the investigation for trial, Jones' lawyers found that one of the callers was a supervisor who had been hired just seven months after leaving prison.

"They lived a thug life," said one of Jones' lawyers, Mark Frenkel, of the ACT operators. "They have a prison mentality."

Despite the verdict, Bank of America continued to use ACT, accepting the company's explanation that these calls were made by rogue employees, until the bank CEO, Brian Moynihan, was given a copy of the taped calls and questioned about the use of the agency.

"That would not be acceptable to me," said Brian Moynihan when told of the language and tone of the calls. Moynihan confirmed that bailout money had been used to fund the ACT contract.

Within two days, Bank of America notified ACT its services were no longer needed, "as a result of what was raised here," said ACT chairman Chris Debbas.

ACT has since made management changes, according to its chairman, who said the phone calls were "deplorable."

"I worked very hard to build this company and our management team and it is unthinkable that somebody would call somebody and do that," said Debbas. He declined to identify other major corporate clients but said they continue to his firm's collection services.

"Everybody understands in this business how hard it is, everybody was outraged by what they heard, and I was indignant," said Debbas.

Debt Collectors Number One Source of Complaints to the FTC

For the last three years, complaints about debt collections and their tactics have been the number one source of complaints to the Federal Trade Commission. In the first half of 2010, the FTC received over 65,000 complaints from consumers.

"There is this huge amount of debt moving through the system," said the FTC's director of Consumer Protection, David Vladeck. "There's no question that there are serious abuses taking place in this industry,"

Vladeck said the FTC had a number of "active investigations" underway into the tactics of major debt collection agencies.

"The kinds of complaints we're getting now, abuse of language, harassing phone calls, we're getting more of those and they're deeply disturbing," said Vladeck.

Bank of America Employees Charged With Wire Fraud

2011-04-08T08:05:00.000-07:00

The U.S. Department of Justice has indicted four former Bank of America employees and the head of a so-called charity for scheming to defraud Bank of America out of $276,000 in charitable donations.

The DOJ says the suspects tried to trick the Charlotte-based bank into matching fraudulent gifts to a charity known as "Hoops for Africa," a Washington, D.C.-based group claiming to help children in Africa. Charity leader Stephen Bekale and former BofA employees Reynaldo “Christian” Villarroel, Maritza Villarroel, Irma DeMartini and Jamal Ibraheem were all indicted and accused of conspiring to commit wire fraud, wire fraud and money laundering.

The bank employees worked near Washington. Prosecutors allege that they convinced unsuspecting co-workers to donate and trigger a matching gift from the bank. The DOJ alleges Bekale then paid the bankers kickbacks.

Bank of America and Imperial Commercial: UNACCEPTABLE BEHAVIOR

2011-04-07T08:21:00.000-07:00

The calls started coming in from someone making vague claims about a file on a family member and a matter requiring immediate resolution.

The next level down was that he is a process server trying to verify information.

The truth seems to be that he's "Tom Parker" (or some other name) from the very aggressive collection agency, Imperial Commercial.

Imperial is not to be trifled with. They spout off dates of birth and social security numbers with utter aplomb. They are also quite happy to fire off emails demanding immediate payment.

Of course, they have the wrong number, the wrong person, and they have violated the law in quite a few ways.

They do not care.

If you call the "customer support" department at (866) 351-9793, you get yelled at. If you yell back, they will tell you to call (888) 721-8850. If you do, you'll get to speak to "Robert Altman" who will call you a loser for not paying a debt that is not yours.

There's no telling what you would find at their stated address of 397 N. Litchfield Road, Ste 113, Goodyear, AZ 85338.

Calls to the bailed out Bank of America (the owners of the supposed debt) did not go too far either. They denied knowing anything about it.

Finally, after months of pressure, they gave in. They admitted that the debt had been theirs and that Imperial was "servicing" it. They gave assurances that the calls would stop.

This is unacceptable. The Bank of America, in business SOLELY due to the good will of the American people, should know-and do-better.

Imperial Commercial should be closed down immediately. The Bank of America should be put on notice.

Bank of America: Second Biggest Bailout Recipient

2011-03-22T14:39:00.000-07:00

Bank of America Corp. was the second biggest recipient of federal bailout programs in the financial crisis, according to a report issued by a congressional panel.

The U.S. government had total exposure of $336.1 billion to Bank of America through eight major programs, including the Troubled Asset Relief Program, according to the final report by the Congressional Oversight Panel. Citigroup Inc. had the largest exposure at $476.2 billion.
The tally includes $45 billion in TARP funds that Bank of America has paid back. For seven other Federal Reserve and Federal Deposit Insurance Corp. programs, the Congressional Oversight Panel counted the highest monthly amounts of loans and debt outstanding.
Morgan Stanley had the third-largest exposure ($135 billion), followed by JPMorgan Chase & Co. ($129.6 billion) and Wells Fargo & Co. ($107.2 billion).

The report is the last for the panel, which was authorized to monitor the expiring TARP program. The Congressional Budget Office estimates TARP will cost taxpayers $25 billion, less than its original $356 billion projection. But the panel noted that $50 billion in foreclosure prevention programs have "largely failed to get off the ground."

"Viewed from this perspective, the TARP will cost less than expected in part because it will accomplish far less than envisioned for American homeowners," the report stated.
Congress approved the $700 billion TARP program in fall 2008 as major financial institutions were collapsing, including Charlotte's Wachovia Corp., now owned by Wells Fargo. The intention was to stabilize the banking sector and the economy.

"It is now clear that, although America has endured a wrenching recession, it has not experienced a second Great Depression," the report said. "The TARP does not deserve full credit for this outcome, but it provided critical support to markets at a moment of profound uncertainty. It achieved this effect in part by providing capital to banks but, more significantly, by demonstrating that the United States would take any action necessary to prevent the collapse of its financial system."

Bank of America or USPS Failure?

2011-03-20T07:42:00.001-07:00

It is not clear what happened to this letter. It was delayed for postage.

The postage amount seems correct?

In any case, it is a failure.

The Bank of America was rescued from destruction by American taxpayers without their consent in the "bailout" designed by the Bush administration.

The US Postal Service is also something of a joke, enjoying a monopoly in certain areas and remaining exempt from any kind of accountability.

But there's no doubt that Ken Lewis gets his retirement checks on time, probably delivered by a courier who is of course paid for by YOUR bailout dollars.

Pay Czar Says "Bank of America Received 'Exceptional Assistasnce'"

2011-02-17T08:11:00.000-08:00

WASHINGTON | Thu Feb 10, 2011 11:24am EST

The pay czar was charged with focusing on executive pay at the seven companies that received "exceptional assistance" through TARP: AIG, Bank of America, Citigroup, Chrysler, Chrysler Financial, General Motors and Ally.

The oversight report gives a hat tip to Feinberg's efforts to tamp down on pay at bailed out firms noting that from 2008 to 2009 the average decrease in overall compensation for the 25-highest paid employees at these firms was almost 55 percent.

The panel was critical of Feinberg, however, for not pressuring executives at TARP recipients to give back some pay they received before February 2009, when his office was given this power by Congress.

Feinberg found none of these payments violated the "public interest" but deemed some were "disfavored" or "not necessarily appropriate," according to the report.

"This is a distinction only a lawyer could love," said former Delaware Senator Ted Kaufman, who heads the oversight panel.

Bank of America to pay $410 Million in Overdraft Lawsuit!

2011-02-06T10:16:00.000-08:00

February 7, 2011: Bank of America has agreed to pay $410 million to settle a lawsuit in which the lender is accused of manipulating debit transactions to maximize overdraft fees.

The agreement, made public Friday by the U.S. District Court in Miami, is believed to be the first financial settlement by a large bank in a case alleging deceptive overdraft practices. It may presage the outcome of related claims consolidated in Miami against 30 other lending institutions, including San Francisco's Wells Fargo, Citibank, Chase, Union Bank and U.S. Bank.

Meanwhile, Wells Fargo is embroiled in a separate lawsuit in federal court in San Francisco brought by California customers. That case started before the multistate legal action, but has not concluded because Wells has filed an appeal.

In August, U.S. District Judge William Alsup issued a scathing ruling ordering Wells Fargo to pay its California clients $203 million. He said the bank's goal was to "maximize the number of overdrafts and squeeze as much as possible" out of customers.

The crux of the claims against all the banks is that they processed debit transactions from largest to smallest, instead of the order in which they occurred, depleting accounts faster and boosting the number of overdrafts, which cost as much as $35 per transaction.

At the time of Alsup's ruling, a Wells Fargo representative said the bank continued to follow the practice because it gives priority to larger payments, which tend to be customers' priority payments.

In the Bank of America case, the plaintiffs' lawyers argued that in addition to its selective ordering of transactions, BofA deceived customers by not disclosing to them that they could opt out of the overdraft plan and by failing to unequivocally explain that transactions would be ordered from high to low.

According to the complaint, BofA told clients that it might use its discretion in ordering, processing and posting items to the account.

"This statement is deceptive and/or unfair because it is, in fact, the bank's practice to always reorder debits from the highest to lowest ... and (the bank) reorders them so that higher debits that occurred on subsequent days are posted to its customers' accounts before lower debits that occurred on earlier days, contrary to the terms of the Bank Deposit Agreement and its customers' reasonable expectations," the complaint stated.

Further, the complaint alleged, BofA delayed posting charges to customers' accounts, sometimes for several business days. Subsequently, BofA posted all of the charges on a single date. The delayed posting prevented customers from obtaining accurate information about their account balances and allowed the bank to accumulate multiple overdrafts, according to the argument.

The lawsuits coincide with new federal rules that took effect in August. They prevent banks from charging overdraft fees on debit transactions without a customer opting in to the service ahead of time. Customers who do not opt in will have transactions denied if account balances are too low, unless their banks decide to honor them without charging a fee.

Fees have become a central part of big banks' business model. According the Center for Responsible Lending, overdraft fees cost customers $10 billion in 2004, $17.5 billion in 2006, and $23.7 billion in 2008. Wells Fargo collected $1.4 billion in overdraft fees in California alone from 2005 to 2007, according to court documents.

Will Countrywide's Errors Spell Doom for Bank of America?

2010-11-25T10:21:00.000-08:00

November 23, 2010: Countrywide Financial, now owned by Bank of America appears not to have properly transferred necessary mortgage documents when it sold loans to other banks, which then in turn created residential mortgage backed securities (RMBS) from the loans.

The documents Countrywide failed to provide are critical to the owners of the RMBS because without them homeowners can question the legal right of banks to foreclose on their homes.

What's new here? Based upon testimony delivered in a New Jersey bankruptcy court, this may have been a matter of policy at Countrywide—not just a case of a one-off error.

Based on Bank of America's current ownership of Countrywide Financial, it is possible that the largest bank in America, when ranked by deposits, may potentially be held liable for the problem.

Perhaps the biggest challenge in grasping the nature of the problem is that the details can overwhelm our ability to see the forest for the trees, so let's walk through it one step at a time.

To begin at the beginning: Mortgage documentation typically requires two critical documents : The deed of trust and the promissory note. The deed of trust describes facts about the lender, the borrower, the terms of the loan and payment, and assigns a legal title to the property—which is traditionally described as the 'bundle of rights' the owner of the property holds. The second document, the promissory note, obligates the owner to make payments on the loan, for which the deed of trust serves as collateral. In the event of a foreclosure, certain jurisdictions require a bank to 'produce the note' if the homeowner demands that the bank do so.

My description, of course, is a high-level summary of a very complex legal construct with roots dating back to the Magna Carta. But what it lacks in nuance it compensates for in simplicity: And it sometimes seems this story hasn't received the focus it deserves—because writer and reader are both washed over by tidal wave of legal terminology.

Over the weekend, Gretchen Morgenson at the New York Times incisively reported on the current state of the mortgage documentation mess. Among other points, she picks up on a bankruptcy case in New Jersey, from which the documentation was released just last week.

The legal issues in the case appear to be fairly straightforward: The homeowner went to bankruptcy court in an attempt to settle up back payments on a mortgage—to "cure arrearages" in the language of the filing—under Chapter 13 of the Bankruptcy Code, which allows individuals to pay their debts over time without losing their property.

What is perhaps most interesting is testimony from a Bank of America executive named Linda DeMartini, "a supervisor and operational team leader for the Litigation Management Department," with responsibilities for home loans. She testified, in reference to the creation of the mortgage backed securities, "…that to her knowledge, the original note never left the possession of Countrywide, and that the original note appears to have been transferred to Countrywide's foreclosure unit, as evidenced by internal FedEx tracking numbers."

But here's what is perhaps most extraordinary: "She testified further that it was customary for Countrywide to maintain possession of the original note and related loan documents."

Morgenson points out: "Countrywide did this even though the pooling and servicing agreement governing the mortgage pool that supposedly held the note required that it be delivered to the trustee, the court document shows."

Morgenson continues, in rather measured tones, considering the apparent ramifications of the statement:

"If Countrywide’s practice was to hold onto the note, then investors in this pool and others may question whether the security was constructed properly and legally and may be able to require Bank of America to buy back their securities."

It may be a fair bet to expect this story to appear throughout the news cycle with increased frequency—and magnitude—as the week continues and the implications sink in.

Bank of America Halts Foreclosures

2010-10-08T10:04:00.000-07:00

October 8, 2010: Bank of America is halting foreclosure sales in all 50 states as part of a widening investigation into flaws in the process, the company announced Friday.

The announcement came a week after the nation's largest bank said it was freezing home foreclosures in 23 states where foreclosures must be approved by the courts. Friday's announcement by Bank of America extends a review of foreclosure documents to all states, regardless of the required legal processes.

On Thursday, the White House said that President Obama won't sign a bill that could have made it easier for courts to clear foreclosures. The bill would have required federal and state courts to recognize documents that were notarized in other states.

In addition to action on the federal level, state attorneys general have stepped up pressure on banks in recent days after it was revealed that some bank employees had signed foreclosure affidavits without verifying that the documents were accurate, a process now known as "robo-signing."

Ohio's attorney general has filed a lawsuit against Ally Financial and its subsidiary GMAC Mortgage for allegedly submitting fraudulent documents in hundreds of foreclosure cases across the state.

More Foolishness from the Bank of America

2010-07-11T09:02:00.000-07:00

From what we're hearing, everyone with a card on a payment plan with Bank of America got multiple copies of this letter, as well as several calls from an Indian call center about it.

Brian Moynihan should resign over this.

First, they aren't sure what the error they identified did; it "may have impacted" or maybe not. Can't they check?

Second, don't they test their software?

Third, they admit there "may have" been problems with part of the statement, but the rest of it is fine. Sure, and Mr. Moynihan has a bridge to sell you.

They sure did seem upset about this-why so many copies of the letters and all of the calls?

Note the letter is signed by Customer Advocate. Undoubtedly a pen name for Ken Lewis, unable to stay away!

Call from (800) 562-6420?

2010-05-16T08:41:00.000-07:00

This is FIA Card Services/Bank of America "Pre-Legal" calling.

This seems to be the number they use to ask neighbors to "deliver an urgent message about a personal business matter" (very old trick).

Many of the callers speak poor English with thick French Canadian accents. This is a Canadian call center.

The manager of the center, who will only identify himself as "Mr. Hossein" sounds like he is from Pakistan.

If pressed, the callers will divulge a fair amount of information-certainly more than enough for a $1,000 settlement under the FDCPA.

Bank of America: Time Travel and Poor Manners

2010-05-08T15:05:00.000-07:00

It may not get much better than this. A Bank of America customer wrote to the Bank of America on April 26th.

According to this letter, received on May 5th, the Bank of America replied on the same date the letter was written.

The Bank of America determined that the letter did not require a response, but invited the customer to contact them.

When the customer called, the Bank of America representative was, predictably confused. The customer was asked to send a copy of the original letter.

A copy of The Terminator and a few episodes of Doctor Who might help as well.

What would have become of the Bank of America without the bailouts?

Bank of America: Sex Discrimination Lawsuit

2010-04-01T07:15:00.000-07:00

April 1, 2010: Unfortunately, this is not an April Fool's Joke.

Despite receiving billions in bailouts and knowing that former CEO Ken Lewis and former CFO Joe Price are being sued, the Bank of America is unable to get it together.

The Bank of America Corporation and Merrill Lynch were accused of discriminating against women in a lawsuit filed on Tuesday by three female financial advisers at the companies.

The suit, filed in United States District Court in Brooklyn, accused Bank of America and Merrill Lynch of giving male counterparts of the three employees bigger bonuses and better opportunities.

The women also said that the companies sought to punish them when they complained about perceived inequalities.

One claimed that after she protested, she was verbally reprimanded and ordered to seek preapproval when filing expense reports for business lunches, something men never had to do.

A statement from Lieff Cabraser Heimann & Bernstein, the law firm handling the suit, identified the plaintiffs as Judy Calibuso, a financial adviser in the Miami office of Merrill Lynch; and Julie Moss and Dianne Goedtel, former financial advisers at Bank of America.

The law firm said Ms. Calibuso had been a financial adviser for 15 years, Ms. Moss for nine years and Ms. Goedtel for seven years.

The suit seeks back pay and unspecified damages. It also asks the court for class-action status.

A spokeswoman for Bank of America, Shirley Norton, said in a statement that the accusations were false and the bank would defend itself against the claims.

Is Moynihan Keeping Ken Lewis' Old Scams?

2010-03-29T10:11:00.000-07:00

If the Bank of America is not being bailed out, they're ripping you off.

This is so typical. They will apply your 1st payment properly, and then take the payment for the next month and apply it to the previous month.

This way, they can hit you for late charges and more interest.

You can ask them to move the payment, but their usual response is to say that's hard, can't we just have another payment.

If they do that, tell them the only way you can do that is to provide written confirmation that the late charges and interest will be removed, as will any negative credit reporting.

Bank of America: Brian Moynihan's Phishing Expedition

2010-03-20T08:12:00.000-07:00

Here is a letter received by someone who is making payments on this Bank of America account. When they called, the representative told them letters like this were sent out automatically, all they wanted was information.

They said this was because of the bailout, they wanted to stay in better touch with their customers. Sorry, Mr. Moynihan, this is PHISHING. If people are making their payments, leave them alone.

Bank of America, Bailouts, and BUSH!

2010-02-08T15:20:00.001-08:00

The charges against former BofA CEO Ken Lewis are very good news.

Current BofA CFO Joseph Price was also charged. Who is his lawyer? William Jeffress, Jr., of Baker Botts.

Who else has Jeffress represented? Scooter Libby and the Saudi Royal Family.

If you wondered about the bailouts and the Bush Administration, you can stop wondering. There were deals with Bush and former Treasury Secretary Hank Paulson. The details are going to come out.

You might consider taking your money out of Bank of America now, it is just going to keep losing money, and the Saudis aren't going to help!

NY AG Andrew Cuomo Charges Former BofA CEO Ken Lewis with FRAUD

2010-02-04T09:46:00.000-08:00

NEW YORK (February 4, 2010) -- New York Attorney General Andrew Cuomo unveiled a major legal action against senior Bank of America executives Thursday over its controversial purchase of Merrill Lynch, including bringing civil fraud charges against its former CEO Ken Lewis.

Cuomo's office, which has been aggressively pursuing an investigation into the merger and subsequent bonuses paid to former Merrill employees, said it was charging Lewis and Bank of America's chief financial officer Joe Price, who was recently appointed to lead the firm's consumer banking business.

The lawsuit contends that the bank's management team understated the losses at Merrill in order to get shareholders to approve the deal, then subsequently overstated the firm's willingness to terminate the merger in order to get $20 billion of additional aid from the federal government.

"Bank of America, through its top management, engaged in a concerted effort to deceive shareholders and American taxpayers at large," Cuomo said in a statement.

"This was an arrogant scheme hatched by the bank's top executives who believed they could play by their own set of rules."

A spokesperson for Bank of America called the charges "regrettable" and "totally without merit."

Separately, the Securities and Exchange Commission said Thursday it had struck an agreement with Bank of America over the company's decision to pay $3.6 billion of bonuses to former Merrill employees for fiscal year 2008.

Under the terms of the proposed settlement, the Charlotte, N.C.-based lender will pay a $150 million penalty to its shareholders who were affected by the disclosure violations.

The company also agreed to implement a number of corporate governance changes for the next three years including giving its shareholders an advisory vote, or "say on pay" of its executives.

The settlement will be subject to the approval of U.S. District Court Judge Jed Rakoff, however.

Rakoff scuttled a previous agreement between the two parties last fall, arguing that the original $33 million settlement was not only paltry, but would only impact those who were hurt by the bonus scandal: the company's shareholders.

Bank of America "Eats" Its Own Chargeoff!

2010-01-23T14:39:00.000-08:00

Five months ago someone's account was charged off by the Bank of America.

They were just contacted by Bank of America and asked if they'd be willing to pay ten dollars a month LESS than they'd been paying before!

The "we are about to charge you off" letter from BofA threatens them about how they won't be dealing with FIA anymore, and how much more difficult things will be. We're not sure what happened.

Maybe the collapse of Mann Bracken had something to do with it, no one wanted debt from the "Bailout of America?"

It is not good that they have the charge off, but things are clearly NOT going according to Brian Moynihan's master plan (or is it really Ken Lewis' old plan?).

It seems as though a very nice settlement offer might show up soon. They are back with FIA. FIA failed!

Moynihan: "Bank of America Failed to Protect Itself"

2010-01-14T08:55:00.000-08:00

WASHINGTON (January 14, 2010): Bank of America's new chief executive, Brian Moynihan, told the panel investigating the financial crisis Wednesday that his institution failed to protect itself by considering worst-case scenarios.

Moynihan also defended his firm's compensation policies, expected to lead to healthy year-end bonuses for many executives despite the economic downturn.

"The mistakes we made and the most losses we've taken have actually been in credit cards and mortgages," he said.

BofA "didn't do the kind of testing you actually do in a trading book, saying 'What if housing goes down 40 percent?'" Moynihan said.

His comments echoed those of the three Wall Street figures sitting beside him - Lloyd Blankfein, chairman and CEO of Goldman Sachs, CEO James Dimon of JPMorganChase, and John Mack, chairman of Morgan Stanley.

Moynihan kept a low profile during the first hearing of the Financial Crisis Inquiry Commission. He politely answered questions and noted that he was not in his post when the crisis hit, leading to a $45 billion taxpayer bailout of his bank.

Commission member Keith Hennessy asked whether the bankers were discussing with each other the possibility that, "if things get really bad, we can always count on the government to step in."

"I wasn't party to those discussions," Moynihan said. "But... on the darkest days, all of us had to go to bed thinking if this thing doesn't stop, what could happen?"

Moynihan, who previously led Bank of America's consumer business, said in his prepared testimony that the job gave him "a firsthand knowledge and a recognition of the hardships that many hard-working families and small businesses experience across America."

He said that the crisis has taught his bank "some very valuable lessons":

That credit "starts and ends" with sound prudent lending practices, and that rating agencies are no substitute for clear assessments of a borrower's ability to repay the loan.

Banks took way too much risk, and banks must hold more capital to cover potential losses.

Liquidity, the ability to convert assets to cash, is crucial so that banks aren't forced to sell assets at discounts to gin up capital to cover margin calls and or pay off deposits.

It's time to review accounting rules that prompt banks to reduce reserves against loan losses in good times and increase them in bad times.

As for the bank's compensation policies, he said, Bank of America officials "understand the anger felt by many citizens because institutions that received federal investments 15 months ago are now recovering and the pay of their employees reflect this recovery, especially in investment banking and trading areas."

However, he said, the bank has repaid its federal bailout money and "the vast majority of our employees played no role in the economic crisis or losses."

Although some employees were laid off, he said, the remaining 300,000 employees "are a valuable part of our future, and we need to pay them competitively to ensure that we can keep them so they can help our clients."

Kuwait Fund Sells Citi Holdings, Is BofA Next?

2009-12-06T08:52:00.000-08:00

Not everyone was deceived by Ken Lewis' announcement about the LATE repayment of bailout funds received by Bank of America…

"DUBAI, United Arab Emirates – Kuwait's sovereign wealth fund said on Sunday, December 6, 2009 that it booked a profit of $1.1 billion by selling the stake it took in Citigroup Inc. less than two years ago when the banking giant was strapped for cash.

The Kuwait Investment Authority said in a statement it sold the preferred shares after converting them to common stock for $4.1 billion. That works out to a gain of nearly 37 percent on its $3 billion investment.

Calls to the Kuwait fund for further details went unanswered. A Citi spokesman declined to comment.

Gulf Arab nations' sovereign wealth funds have been heavy investors in U.S. and European companies, using their oil wealth to buy large stakes in companies ranging from Citi to Germany's Volkswagen AG and Mercedes-Benz parent Daimler AG.

The KIA joined other big investors — including the Government of Singapore Investment Corp. and longtime shareholder Prince Alwaleed bin Talal of Saudi Arabia — in pumping some $12.5 billion into Citi in January 2008. At the time, the bank was reeling from a huge drop in the value of its mortgage holdings.

At the same time it made its Citi investment, the fund took a $2 billion stake in Merrill Lynch, which also needed cash as a result of the credit crisis.

Merrill was later bought by Bank of America Corp., which last week surprised investors by paying back $45 billion in federal bailout money.

Analysts say that move puts pressure on Citi and other banks that tapped U.S. government aid to follow suit, even though they still could face further losses as consumers struggle to pay their bills.

In September, the KIA said it had no intention of selling its holdings in either Citi or Bank of America in the short term because its investment policies are based "on a long-term vision."

Kuwait took its stake in Citi last year after another Gulf fund, the Abu Dhabi Investment Authority, paid $7.5 billion for a 4.9 percent stake in the company. ADIA's holdings, known as "equity units," will begin to convert into ordinary shares starting in March next year.

A spokesman for the Abu Dhabi sovereign wealth fund, the world's largest, declined to comment on plans for its Citi stake."

Bank of America: Locks Woman Out "By Mistake" (?)

2009-12-04T13:58:00.000-08:00

" Fri Dec 4, 7:56 am ET

TRENTON, N.J. – A New Jersey woman returned home from Thanksgiving with family to find the locks changed days after she avoided foreclosure.

Bank of America says it made a mistake.

Nina Morra was locked out of her fully furnished Trenton home for three days by an inspector hired by the bank.

The 57-year-old was away when the inspector showed up on Nov. 22. Bank of America spokeswoman Jumana Bauwens says the inspector changed the locks because he thought the dwelling was vacant.

Morra had received a letter from the bank days earlier saying she had been accepted into a new payment program.

The bank spokeswoman says she thinks the lockout occurred because the timing was so close.

Morra became delinquent on her mortgage when she suffered a stroke in January".

Truth to be told, mistakes are the norm for the Bank of America.

But was this a mistake? Is it possible some Cheronda Guyton wannabe didn't have ideas?

The Bank of America needs a top to bottom reform. Paying back their BAILOUT money and Ken Lewis' departure are just the tip of the iceberg.

Employees such as Marcus Smith need to know, and recognize that the Bank of America was bailed out, and that without the bailout money, it would have failed (it continues to fail, but in other ways).

Bank of America Scam: Double Payment!

2009-10-31T15:47:00.001-07:00

This is a little scam the Bank of America has come up with. Maybe they are trying to generate enough revenue to pay back the bailout money?

It works like this.

They contact you and say they did not receive your payment. No matter what you say-it was sent certified mail, it has already cleared your bank, they can't find it.

They will terrify you with tales of late fees and collection actions. They'll ask for a payment then and there. Very high pressure sales. They are also very reassuring about the "research department" and how they'll eventually find your payment.

And so they do.

You will get a letter like this one, saying that they did, indeed, receive your payment.

They are getting a double payment. Yes, they'll give you credit, but they are getting the use of your money.

No big deal-but given the number of people they are doing this to-it adds up to some SERIOUS money.

A scam!

Have you had it with the Bank of America? Let your congressman and senators know!

Bank of America: Self-Destruct?

2009-10-16T05:43:00.000-07:00

Oct. 16, 2009: Bank of America Corp., the biggest U.S. lender, posted its second quarterly loss in less than a year, unable to shake off effects of the economic slump that led to two U.S. bailouts. Some Bank of America executives, such as Senior Vice President (Card Services) Marcus Smith continue to deny that the bank received bailout money!

The $1 billion third-quarter loss, or 26 cents per diluted share, compared with a profit of $1.18 billion, or 15 cents, a year earlier, the Charlotte, North Carolina-based bank said today in a statement. That exceeded the average estimate of 24 analysts surveyed by Bloomberg for a loss of 12 cents a share, and the shares fell 2.8 percent in early New York trading. The bank said it set aside less money to cover future loan losses.

The quarterly report will be the last supervised by Chief Executive Officer Kenneth Lewis, 62, who retires Dec. 31 after regulators and shareholders criticized his pursuit of Merrill Lynch & Co. The bank reported a fourth-quarter loss for 2008, its first in 17 years, and Lewis is trying to lead a rebound while fending off state and federal probes of the Merrill deal. He agreed yesterday to give up his 2009 salary and bonus. The fate of his multi-million dollar retirement package is still unknown.

“The idea that the financial crisis is over is a fantasy and it looks like the numbers bear that out,” said Harvard University professor Niall Ferguson on Bloomberg Television. “It’s clearly not over for Bank of America.”

Results were aided by profit from Merrill Lynch, with gains from trading bonds, stocks and currencies. Losses on home lending and insurance widened to $1.6 billion from $724 million, and the loss on credit cards expanded to $1.04 billion from $167 million.

Reserve Levels

The bank added $11.7 billion to its reserve for future loan losses, $1.7 billion lower than the second quarter, and $5.3 billion more than a year earlier, the statement said.

Bank of America reported total revenue increased 32 percent to $26.4 billion. The total was 13 percent lower than forecast by Chris Mutascio of Stifel Nicolaus & Co.

Revenue from credit cards, brokerage services, investment banking and mortgage banking slumped from the previous quarter, and Bank of America’s noninterest income declined by 31 percent to $14.6 billion. Those declines offset a 57 percent gain in trading account profits.

Bank of America said net write-offs of uncollectible loans rose 11 percent from the second quarter to $9.62 billion. The bank wrote off $3.2 billion of home loans, including home equity loans, during the quarter, up 10 percent from the second quarter. Charge-offs on credit cards increased 5 percent to $2.17 billion.

Recession’s Impact

Bank of America’s position as the largest U.S. consumer lender has hurt results since the recession began in December 2007. While Federal Reserve Chairman Ben S. Bernanke has said the economy may be growing again, the jobless rate rose to 9.8 percent in September, and Lewis said last month that “a near double-digit unemployment rate is bad medicine for a bank that serves consumers.”

JPMorgan Chase & Co., the second-biggest U.S. bank by assets, said this week that third-quarter profit climbed almost sevenfold to $3.59 billion. Goldman Sachs Group Inc. said its income more than doubled to $3.19 billion. Both New York banks repaid their U.S. bailout funds.

Citigroup Inc., the third-biggest U.S. bank, posted a $101 million profit yesterday as CEO Vikram Pandit said he wants to repay $45 billion in U.S. bailout funds as soon as possible. Bank of America also owes $45 billion.

Bank of America shares have rebounded five-fold since February when they traded at less than $3, their lowest in more than 20 years, on concern that the U.S. would seize a stake in the company. The stock closed at $18.10 yesterday in New York Stock Exchange composite trading, and slipped to $17.60 at 7:40 a.m. in New York.

Accounting Rules

The bank, largest in the U.S. by deposits and assets, was hampered during the quarter by accounting rules that require the lender to assess the value of its own $447 billion in debt each quarter. Falling prices entitle the bank to take gains, on the theory that the debt could be bought back and retired for less money, while rallies that boost the price lead to charges that reduce reported earnings.

Bank of America also earmarked $402 million to settle a dispute over a plan to share losses with the Treasury Department on $118 billion of loans and mortgage-backed securities, mostly acquired in the Merrill transaction.

Lewis has said the purchases of Merrill on Jan. 1 and home lender Countrywide Financial Corp. in July 2008 during the worst of the credit crunch bore fruit during the first part of this year, providing most of the company’s earnings growth.

Bank of America expects to add to its 20.5 percent share of U.S. home lending over the next five years, Barbara Desoer, president of home loans and insurance, said in an Oct. 14 interview.

“It has become hard to imagine Bank of America without Merrill Lynch,” Lewis told employees in a September memo announcing his departure.

Ken Lewis: Lord of the Bailouts!

2009-10-10T05:12:00.000-07:00

Ken Lewis, the "ironic hero" (yes, that's what Warren Buffett called him) of the Bank of America bailout debacle is already becoming a cult figure.

Some Bank of America employees, such as Rick Scott, are stating that he's already left the Bank of America (he's actually not leaving until the end of 2009), but that he was a great leader. Scott is delusional.

Others, such as Marcus Smith, seem to think he's not going anywhere. Smith is as delusional as Scott, but for different reasons!

He is clearly idolized, even though he has presided over one of the worst business failures in history!

An appeal has been made to Obama's compensation czar to block Lewis' multi-million dollar pension.

The Bank of America is also under investigation for using bailout funds to conduct lobbying, this was done at Lewis' personal direction!

Bank of America: Not Complying With Loan Modification Requirements

2009-10-04T11:43:00.000-07:00

WASHINGTON — The federal government is engaged in a massive mortgage modification program that's on track to send billions in tax dollars to many of the very companies that judges or regulators have cited in recent years for abusive mortgage practices.

The firms, called mortgage servicers, have been cited for badgering, manipulating or lying to their customers; sticking them with bogus fees, or improperly foreclosing on them.

Mortgage servicers are the middlemen between homeowners and the investors that hold their mortgages, collecting homeowners' checks and disbursing payments for the mortgages, property tax and insurance. They're a necessary player for any modification.

The reliance on such companies points to an ironic paradox for federal regulators: Cleaning up the nation's financial crisis often rewards the firms that helped create the mess. Those Wall Street banks and mortgage servicing companies argue that they're best positioned to repair the damage they've helped cause. In the case of the mortgage program, the firms getting the taxpayers' money are, after all, the firms that control the troubled mortgages.

To make matters worse, the Government Accountability Office, Congress' watchdog, has said that the Treasury Department hasn't done enough to oversee the companies participating in what's known as the Home Affordable Modification Program, which emerged from the bank bailout bill Congress passed last fall.

The modification program has been slow to get off the ground. Since it began this spring, only 12 percent of a potential 3 million delinquent mortgages have begun the process of being reworked, or put into "a trial modification," according to Treasury Department data through August, the most recent available.

"We've consistently been behind this problem," said Mark Pearce , North Carolina's chief deputy commissioner of banks, who works with a state-level group of attorneys general from across the country. "Two years ago, maybe some were caught by surprise. But we still haven't gotten to a point where the servicers have demonstrated an ability to handle the problem."

Housing advocates say homeowners still face "reluctant lenders," said Irwin Trauss , an attorney who represents low-income homeowners for Philadelphia Legal Assistance. He recently testified at a hearing of the Congressional Oversight Panel, the watchdog that monitors the Treasury's Troubled Asset Relief Program, better known as TARP, or the bank bailout bill.

Trauss said that Bank of America, at least through July, told homeowners that they couldn't participate in the program when they should've been allowed to do so, and he alleges that Saxon Mortgage forced one of his clients into bankruptcy without providing a valid reason for turning down her modification request. Trauss' comments were echoed by other housing advocates, who've found mortgage servicers slow to respond and confused about modification rules.

"Servicers look for reasons to avoid making the modifications when they are most needed, rather than for opportunities to make them," Trauss said.

Saxon Mortgage said it couldn't comment on Trauss' testimony because it wasn't provided with specific details of the account in question. Bank of America said there could've been instances in which improperly trained employees were confused about the modification rules, but the vast majority of customers have been given proper information.

Although it's early in the Treasury Department's program, housing advocates say the servicer industry for years has resisted helping customers with modifications. Donna and Ronnie Fruia , of Troutman, N.C. , learned firsthand how difficult it can be.

The couple was in the midst of a series of health crises, and three members of the family — the couple's son, Donna's mother and Ronnie — were in the hospital.

It was then that Donna got an urgent call that somebody from her mortgage company, CitiFinancial, had just showed up in her husband's hospital room, where he was recovering from a stroke.

"They said, 'Some guy's in there aggravating him,'" she said.

"At the time, I couldn't even really talk that good," Ronnie said. "But he wanted me to sign a bunch of papers."

The Fruias had been trying to get a mortgage modification from CitiFinancial. The company, however, was pushing the Fruias to accept a modification that wouldn't have cut their interest rate, they said.

Only after the episode in the hospital room and the involvement of state regulators did CitiFinancial cut the mortgage's interest rate from 11.5 percent to 5 percent, lowering their monthly payment from $985 to $602 . The process took from the start of the year until July.

"They were the perfect candidate for someone with a subprime rate getting a modification," said Henrietta Thompson , who as housing coordinator for United Family Services, a United Way -funded organization in Charlotte , helped the Fruias. "I know if the banking commissioner hadn't gotten involved, it wouldn't have happened."

While CitiFinancial, a unit of Citigroup Inc. — one of the largest recipients of TARP bailout funds — said it couldn't talk about specific customers, it's "pleased" that the case was resolved.

"We have strict guidelines concerning the behavior of our representatives, and the incident you described would not be acceptable under our policies, even if well-intentioned," said Mark Rodgers , a spokesman.

It shouldn't have been a surprise that the mortgage service companies would have trouble executing wide-scale mortgage modifications. They generally aren't set up for the complicated business of reworking loans.

In 2007, an assistant attorney general in Iowa , Patrick Madigan , analyzed the looming mortgage meltdown and found that mortgage service companies have a "highly automated process, spending as little time as possible on an individual loan and preferably no time actually talking to the customer."

"Loan modifications, by contrast, are a time-intensive process that requires a great deal of individualized attention," he wrote. "In some situations, it may be easier and cheaper for a servicer to simply foreclose on a borrower than to try to fix the underlying problem."

Service companies had high turnover and employees who saw their jobs as akin to that of collection agents. Some were known to hang up on callers if they started to get tough questions, Madigan wrote. He urged mortgage service companies to hire far more staff and boost training.

That year, Iowa Attorney General Tom Miller convened a group of state officials ( Iowa's Madigan helped coordinate the effort), who then contacted the nation's 20 largest servicers of risky subprime mortgages.

By September 2008 , however, as the economy went into freefall, the mortgage industry's efforts had been "profoundly disappointing."

"Too many homeowners face foreclosure without receiving any meaningful assistance by their mortgage servicer, a reality that is growing worse rather than better," said a report from the State Foreclosure Prevention Working Group .

By this year, more federal and private efforts were under way to modify millions of troubled mortgages, and customer service was beginning to improve. Companies, though, were still having trouble getting the jobs done.

"It is difficult for homeowners to initiate productive discussions with lenders because many servicers lack the capacity to deal with a large volume of modifications," the Congressional Oversight Panel reported. "Servicers are generally understaffed for handling a large volume of consumer loan workouts."

The panel found that it's "unlikely" that mortgage servicers will be able to do all they're being asked to do: "Servicers are simply in the wrong line of business for doing modifications en masse," it said.

Madigan, the assistant Iowa attorney general, said in an interview that, "The mortgage industry has responded to this crisis with a series of half steps based on a notion that a turnaround in the housing market was just around the corner."

Under the Treasury Department's mortgage modification program, three parties can participate: the company that owns the loan, the company that services the loan, and the homeowner. All get a portion of the more than $20 billion that the federal government currently estimates it could spend to keep homes out of foreclosure.

While the Treasury said it's necessary to take in as many mortgage service companies as possible, the GAO found that the department wasn't doing enough to monitor the process.

In a July report, the GAO said that the department had "significant gaps in its oversight structure," and was short-staffed in the office monitoring the modification program. As of July — eight months into the program — the Treasury had filled fewer than half the positions in a key modification office. (Many of those jobs have since been filled, the department said.)

Beyond that, the government had conducted "readiness reviews" of only seven of 27 mortgage servicers the GAO examined; no more were planned. The reviews only included interviews with senior executives — and the information gathered wasn't verified.

"Treasury cannot identify, assess and address risks associated with servicers that lack the capacity to fulfill all program requirements," the GAO said.

Treasury said it's beefing up its review procedures and also said it recognizes many of the problems and has been working to correct them. "Clearly, we're not there yet," said Seth Wheeler , one of the Treasury officials who oversees the modification effort. "Clearly there's still inconsistent application of the program, even though we have made progress."

Several companies in the Treasury program have been cited by judges or regulators for having engaged in improper behavior with their customers.

They include Select Portfolio Servicing Inc. , a Utah -based company formerly known as Fairbanks Capital Corp. ; Countrywide Home Loans Inc. , now a unit of Bank of America Corp. ; Carrington Mortgage Services LLC , based in California ; Saxon Mortgage Services Inc. , a unit of Morgan Stanley ; EMC Mortgage Corp. , now a subsidiary of J.P. Morgan Chase & Co. ; and Green Tree Servicing, a Minnesota company.

Ocwen Financial Corp. , a Florida -based company that services more than 300,000 mortgages nationwide, could receive more than $200 million in TARP payments.

"Ocwen has screwed up my finances so bad you can't believe it," said Brad Rhoton , whose rental properties in the Houston suburbs are part of a nationwide lawsuit against Ocwen. "It's been the most maddening process you can imagine."

Rhoton's lawsuit charges that Ocwen constantly misapplied Rhoton's mortgage payments and tacked on unnecessary fees and insurance, causing his accounts to fall behind.

So far under the Treasury's modification program, Ocwen has started trial modifications in 8 percent of potential mortgages — below the national average and well below some other servicers.

Paul Koches , a company spokesman, said the number is misleadingly low. Ocwen, he said, has set rigorous standards in documenting its modifications and is therefore likely to have a far higher share of its modifications stick than other companies. He said that Ocwen undertook its own loan modification program in 2007 and has beefed up its staff substantially since then.

As for the suits against it, Koches said they represent a fraction of the firm's customer base, and many were copycat lawsuits that tried to paint Ocwen with the same brush as other mortgage servicer firms. He said the company continues to vigorously defend itself against lawsuits.

Over the years, Ocwen has lost other lawsuits and has been slapped down by a federal judge for its conduct.

In one Texas bankruptcy case, for example, a federal judge blasted Ocwen after it tried to pass the cost of a $1,000 sanction onto the customer it was cited for mistreating. When the judge found out, he said, "Ocwen's course of conduct in this proceeding bordered on the outrageous." He fined the company an additional $27,500 .

The case was far from isolated, however. A jury in Galveston, Texas , ordered the company to pay $11.5 million , and one down the coast in Corpus Christi ordered it to pay $3 million for unfairly foreclosing on homeowners (both cases were then settled in the appeals process for undisclosed amounts).

In both cases, the plaintiffs were on the edge financially, and so when Ocwen added extra fees to their accounts. they quickly fell behind.

That was part of their strategy, plaintiffs' attorneys said. One of the key witnesses before both juries was a former Ocwen account officer who said the company trained its sights on customers who had substantial equity in their homes. In those cases, the company had the most to gain if customers lost their homes in foreclosure.

"We didn't treat the people very well, but the money was pretty good," the former account officer, Ron Davis , testified during one of the trials. (Davis couldn't be reached for further comment.)

The motive, he said, was simple: force people into foreclosure as a way to earn higher bonuses.

"We would call the customers and ask them what bridge they were going to live under," Davis testified.

Ocwen lost that lawsuit. A Texas jury found that the company engaged in "fraudulent, deceptive, or misleading" tactics that it called "unconscionable." The case involved an elderly Texas woman the bank tried to evict from her home even after a local judge had ordered it not to. The jury awarded her $11.5 million , which was reduced to $1.8 million , according to Ocwen's Securities and Exchange Commission filings; the case was settled during appeals.

Outside the courts, federal regulators in 2004 approached Ocwen to request that the company enter into a formal supervisory agreement under which it promised to improve its customer service. It required, for example, that Ocwen beef up its ombudsman to take customer complaints; adopt a "borrower-oriented customer service commitment plan"; take reasonable actions to see if homeowners already have hazard insurance before adding it to customers' accounts; and regularly report to federal regulators about outstanding customer complaints.

Koches of Ocwen said the agreement was merely an attempt to formalize many of the steps the company was already taking — and that the company and federal regulators wanted avoid the kind of problems other firms had experienced.

Later that year, however, Ocwen took steps to ensure that such regulatory decisions wouldn't come again.

It successfully petitioned to have itself removed from oversight by the Office of Thrift Supervision , thus ending the supervisory agreement hatched just months before, according to Ocwen's regulatory filings. Ocwen said it removed itself from OTS oversight for business reasons unrelated to the supervisory agreement and that it continues to follow the intent of the agreement.

Ken Lewis to Step Down: Good Riddance!

2009-10-01T05:20:00.000-07:00

Ken Lewis, the controversial CEO of Bank of America, will resign at the end of the year.

Lewis, 62, was a lifer at BofA, working there for 41 years and was widely viewed until recently as an unalloyed American success story, the son of a single mother living in Walnut Grove, Mississippi, he eventually became one of the most powerful men in global finance.

He lost some of his gloss amid the chaos of the financial crisis. He oversaw BofA's purchases of both troubled mortgage giant Countrywide and stricken investment banker-brokerage Merrill Lynch.

The Merrill acquisition has caused huge headaches for Lewis. BofA was sued by the Securities and Exchange Commission which alleged that both BofA and Merrill misled investors about huge executive bonuses paid to Merrill employees at the same time BofA was getting billions of bailout dollars in taxpayer money through the Troubled Asset Relief Program.

Staff Members of Bank of America Senior Vice President Marcus Smith: "There Was No Bailout"

2009-09-30T16:45:00.001-07:00

Staff members of Bank of America Senior Vice President Marcus Smith assert that the Bank of America did not receive bailout funds.

Instead, they have been telling consumers that the funds received by the Bank of America were not a bailout, but rather a loan, and that the loan is being paid back on time.

Consumers are also being told that the innumerable press reports describing the funds received as a bailout are wrong.

Bank of America: National Disgrace

2009-09-22T08:39:00.000-07:00

September 22, 2009: The controversy about the placement of American flags to honor a fallen Marine from Gaffney, SC, could cost Bank of America some local government deposit money, and perhaps much more.

Monday night, the Cherokee County Council voted 5 to 1 to withdraw county money from any accounts held by Bank of America. Councilman Quay Little said that totals more than $500,000, but that number could skyrocket.

If all county officials close their accounts, Bank of America would lose more than $1.5 million in customer funds, Little said.

The controversy erupted last Wednesday when the body of a fallen Marine, Lance Cpl. Christopher Fowlkes, was brought back to Gaffney. A woman claimed the Bank of America branch along the procession route would not allow her to place American flags in the Marine's honor on the bank's lawn.

She said the bank manager removed them from the property. Bank of America calls what happened a miscommunication about the company's flag policy.

Fowlkes died of injuries sustained in an explosion in Afghanistan. He is the first U.S. serviceman from Cherokee County to die in action since the Vietnam War.

The Bank of America refuses to allow the American flag to be displayed.

Disgraceful.

The Bank of America, bailed out and subsidized by American taxpayers, cannot say when or if the money will be returned.

Disgraceful.

The Bank of America lags well behind all others, to say nothing of government guidelines, for loan modification.

Disgraceful.

This is a call for a NATIONWIDE boycott of the Bank of America!

Bank of America's Ken Lewis = Mr. Magoo!

2009-09-17T06:08:00.000-07:00

August 17, 2009: Warren Buffett came to bury Ken Lewis, not to praise him.

Buffett, the billionaire investor who runs Berkshire Hathaway (BRKA, Fortune 500), said Tuesday at Fortune's Most Powerful Women Summit in San Diego that Lewis -- the embattled Bank of America (BAC, Fortune 500) chief executive officer -- was the "ironic hero" of last September's economic meltdown.

But make no mistake, the emphasis was on ironic. Buffett's comments portray Lewis as a sort of Mr. Magoo of global finance, bumbling into trouble in stubborn pursuit of banking greatness -- and unintentionally saving the world in the process.

Lewis may have "inadvertently saved" the financial system by agreeing to buy Merrill Lynch in a stock swap that was initially worth $45 billion, Buffett told Fortune's Carol Loomis in an on-stage interview.