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Home » Uncategorized » Bank of America’s Foreclosure Hiatus is not Charitable

Bank of America’s Foreclosure Hiatus is not Charitable

By Jim Peterson on October 11, 2010
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We may never know exactly why B of A is holding back on foreclosures, but one thing for sure, it was not a charitable decision. In real-estate it is “location location”. Vacant homes are magnets for vandals and thieves. When we sign for a loan, it is an agreement with the lender.

A signature confers a responsibility not just to pay the loan back. Even if it is a big Bank, one should not just turn property over to someone who claims ownership backed only by a ledger entry. It should be an implied responsibility to ask for the signed contract.

Hyperbole should be expected when dealing with a subject that has purposely been cloaked with mathematic and linguistic smoke and mirrors. For example “Credit Default Swaps” are a way to sell contracts, and hedge bets on tangible and intangible assets. Warren Buffet called them financial weapons of mass destruction, and Newsweek on ”9/27/08 wrote of them as “the Monster that ate Wall street”.

Contracts were bundled then divided (given a French name for slices “tranches”), combined with other loans, and rated by Standard and Poor’s or Moody’s for safety and “intrinsic value“, and then sold over and over in ways that “create money out of thin air”. Between $55 and $60 trillion were being blown about. Big banks loved the process and even today hate to give up Credit Default Swaps.

A link will be “hush hush”, big bankers do not want to admit they are directly responsible for our financial mess, especially since they got bonuses as a cut in the action and had so much fun gambling with other people‘s assets. Media can be mum saying “the little people cannot possibly understand such complicated matters”.

A major cause of the “Great Depression”, were bucket shops. Bets on the price of various things like those in the stock market could be made without owning any stock or paper. Such practices were outlawed for Banks after the Great Depression. At the end of Clinton’s term a bill was passed, “section 17 of the Commodities Modernization Act”, allowing again the bucket shop practices. They are now called “naked Credit Default Swaps” and anything the Hedge Funds and Big Banks want is acceptable.

Are Credit Default Swaps involved in the BofA hiatus? It could be that Banks may just have a ledger entry for some of the properties to be foreclosed on. Has Bank of America taken a hiatus in foreclosures because some people are starting to demand their signed copy of mortgage agreements which may have been bundled up and sold to a bank in Timbuktu. That might take the fire out of a mortgage ceremony or foil foreclosures.

By: Allen Wilson

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  5. Mortgage Rates of Wells Fargo Bank of America and Chase Compared

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