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April 22, 2014

Banking Troubles, but Not a Word About Fraud Claims

“Reading The Times’s coverage of Bank of America’s quarterly loss last week, I almost felt sorry for the financial behemoth. It has mortgage troubles, you see. It has onerous legal costs.

“The disappointing news shows how Bank of America is still paying for its mortgage problems nearly six years after the financial crisis,” the article said.

“I thought of sending a small check to help or at least conveying my sympathy.

“I really should have remembered what this is all about because it was only last month that Bank of America settled a lawsuit that claimed the bank had committed mortgage fraud. The cost of the settlement? More than $9 billion. Bank of America was one of the banks that sold mortgage securities backed by subprime mortgages, which went south during the housing and financial crises – in many cases driving American consumers into financial ruin.”

***

“The Los Angeles Times, in writing about the $9.5 billion settlement last month with Fannie Mae and Freddie Mac, the two government-sponsored mortgage finance firms on whose behalf the suits were brought, quoted Dennis Kelleher, chief executive of Better Markets Inc., a nonprofit concerned with financial reform. He was even more direct: “Wall Street enriched itself on a massive fraudulent scheme that paid their bonuses and stuck the American people with the bill.”

***

Read full NY Times article here.

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