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Day 2 of Bank of America's (BAC) Article 77 hearing finds an AIG lawyer arguing those who...

Day 2 of Bank of America's (BAC) Article 77 hearing finds an AIG lawyer arguing those who approved the $8.5B settlement - including BlackRock (BLK) and MetLife (MET) were conflicted and never investigated how much money investors actually lost on the MBS originally valued at $105B. A lawyer for BlackRock says it and other firms agreed to the settlement rather than risk BofA putting Countrywide into bankruptcy. Observing the proceeding, Mike Mayo says there's "significant legal tail risk" for BofA.
Comments (24)
  • brunorcng
    , contributor
    Comments (4) | Send Message
     
    Just go BK with Countrywide and done .
    4 Jun 2013, 03:26 PM Reply Like
  • mphill47
    , contributor
    Comments (573) | Send Message
     
    I'm wondering is now wouldn't be a good time to go to the sidelines. This may play out over a very long time.
    4 Jun 2013, 03:41 PM Reply Like
  • bbro
    , contributor
    Comments (10233) | Send Message
     
    And Mayo went to law school where??
    4 Jun 2013, 03:46 PM Reply Like
  • MexCom
    , contributor
    Comments (3058) | Send Message
     
    Yup. They wanted to get a bite of the apple before they went bankrupt and get what they could before the others wanted to jump in line. But now things aren't so bad and they are crying they could have got more. I don't think the judge will finally go for this ploy. They better take what they got rather than risk losing what was awarded already. Just spinning their wheels and risking their client's settlement.
    4 Jun 2013, 03:46 PM Reply Like
  • tomlos
    , contributor
    Comments (1199) | Send Message
     
    Took 20% profit today and sitting on the side for the time being.
    4 Jun 2013, 03:58 PM Reply Like
  • gwynfryn
    , contributor
    Comments (4707) | Send Message
     
    Sensible!
    5 Jun 2013, 08:38 AM Reply Like
  • jackooo
    , contributor
    Comments (1601) | Send Message
     
    Who is Mayo?
    4 Jun 2013, 04:02 PM Reply Like
  • Duke LLC
    , contributor
    Comments (14) | Send Message
     
    Not sure they can take Countrywide BK, they have made billions on this remember they picked the company up for pennies on the dollar. Not sure they can BK it after all the money they made on it.
    4 Jun 2013, 04:04 PM Reply Like
  • mphill47
    , contributor
    Comments (573) | Send Message
     
    According to the opening statements by BAC they say CW has very little more to give and will be put into BK. Not a very successful bluff so far.
    4 Jun 2013, 10:33 PM Reply Like
  • jackooo
    , contributor
    Comments (1601) | Send Message
     
    Bank analyst.
    4 Jun 2013, 04:11 PM Reply Like
  • John/Jack
    , contributor
    Comments (116) | Send Message
     
    Mayo is a short. Read what the lawyer says: They "couldn't risk litigation."

     

    Duh. The investors signed papers agreeing not to sue.
    4 Jun 2013, 04:33 PM Reply Like
  • Just_woodman
    , contributor
    Comments (31) | Send Message
     
    Seems to me that the legal team at BAC should be held liable for walking us into this mess. Did anyone look at the liabilities before BAC got into Counteywide?? Who in their right mind would take on such a risk? and did the CEO just take their word??
    4 Jun 2013, 05:24 PM Reply Like
  • marketnews09
    , contributor
    Comments (98) | Send Message
     
    As far as I am concerned, BofA is getting the royal. No one would have taken over Country Wide. I think BofA was told to take it over and it also wanted Merrill. If BofA had an opportunity to look at the books of Country Wide, it would have walked away and the market would have collapsed even more. All of this started with Fannie and Freddie and BofA is paying for it royally.
    4 Jun 2013, 05:29 PM Reply Like
  • masonkelsey
    , contributor
    Comments (17) | Send Message
     
    Totally out of BAC for now. Will consider reinvesting if it drops below $12.25.
    4 Jun 2013, 05:31 PM Reply Like
  • Darcangelo
    , contributor
    Comments (298) | Send Message
     
    Throw Countrywide into Chapter 11 and be done with this.
    4 Jun 2013, 05:37 PM Reply Like
  • jonebgood
    , contributor
    Comments (2) | Send Message
     
    B of A long its still a solid play.
    4 Jun 2013, 05:47 PM Reply Like
  • DoowopDave
    , contributor
    Comments (252) | Send Message
     
    Don't understand these comments. Settlement requires Judge approval. There have been opponents to settlement since it was reached. NY law says BAC responsible for CW liabilities. That law may mean no bankruptcy for CW. This mess not going away. If judge rules in favor, AIG will appeal. If ruling goes against BAC, litigation will continue for years. Nothing good unless BAC settles AIG $10 bn case & get AIG to drop their objection to $8.5 bn settlement in return. Most settlements get approved, but maybe not this one..
    4 Jun 2013, 07:46 PM Reply Like
  • SA_Member_4576931
    , contributor
    Comments (19) | Send Message
     
    Maybe re-opening this can of worms works out to BOA benefit. Save your 8.5B and just put CW into BK? Too bad for AIG if they brought this up again?
    4 Jun 2013, 07:49 PM Reply Like
  • WPSPIKER
    , contributor
    Comments (1158) | Send Message
     
    Was reading that some other judge ruled against (BAC) on some multi law suit settlement closed it with BAC owing ONLY 10 million :D the opposition wanted 5 or 6 Billion.

     

    What some must not know was the FDIC head (cant remember her name now) basically ordered (BAC) to takeover CW & supposedly said FDIC would backstop any losses over some value number that I could not locate (secret or?)

     

    BAC has maintained CW as it's own entity providing it cash and operation management. This being so they can by law let/take them into bankruptcy from what I have researched on it. BTW (BAC) is my single biggest holding waiting for these little know items to come to light in any case before a judge. They are reaching settlements now only because the general net worth of CW is still above any agreed on settlements. I do not know if any of the already agreed on settlements have any clauses for future CW bankruptcy claw-backs...

     

    Mark
    4 Jun 2013, 10:45 PM Reply Like
  • sandykoz
    , contributor
    Comments (12) | Send Message
     
    I think that it would be interesting for BofA to put CW into bankruptcy and maybe some of the communications between the Fed & Treasury and BofA at the time of the CW take over would come out. I think BofA was given promises or arm twisted to keep the CW takeover going. It would be really interesting to see some of the communications between the government and BofA at that time. Some of that material would probably have to be exposed by BofA to convince a court that it should have the right to put the present CW division into a separate bankruptcy.
    5 Jun 2013, 03:06 AM Reply Like
  • berealforgodsake
    , contributor
    Comments (4) | Send Message
     
    BofA bought in legally and did not originate the loans that went belly up. They purchased the fallout not the original investments. It is the same as a secondary credit card buyer buying bad credit. The original buyer has no obligation to pay off loans to the secondary purchaser. The lawsuit will be thrown out because BofA purchased AT A DICOUNT the original mortgage instruments and the insurers took the risk of backing Countrywide, which means BofA is NOT responsible for the insurers losses. NICE TRY THOUGH.
    5 Jun 2013, 03:41 PM Reply Like
  • berealforgodsake
    , contributor
    Comments (4) | Send Message
     
    A.I.G holds all responsibility for any outstanding debt held not BofA.
    5 Jun 2013, 04:42 PM Reply Like
  • berealforgodsake
    , contributor
    Comments (4) | Send Message
     
    BofA is not responsible for bad loans and bad mortgages, they only purchased the bad loans they did not originate them. The insurers are responsible for backing these bad loans. When the bank assumed these loans they bought them as not grade A they will not be held responsible for them, they did not originate the loans and only the insurers are responsible. At some point America must make its money on business not lawsuits. That is why we insure these loans, the originator is at fault (COUNTRYWIDE) not BofA.
    5 Jun 2013, 04:42 PM Reply Like
  • WPSPIKER
    , contributor
    Comments (1158) | Send Message
     
    to a few posts above regarding CW was one originally selling the bad CDO/CDS what-ever bundled MBS type securities and since BAC now owns CW they (BAC) are getting these lawsuits. While agree BAC is NOT the ones that should be getting the shark bites by default these sharks know they can't file on CW. so in desperation they go after the deep pockets of the BAC shareholders. I also agree that AIG, S&P, MOODYS and who ever else rated and insured the MBS/CDOs should be ones on the hook for not doing due diligence & for rating them at quality goods in the first place.

     

    ALL of this is just a bunch of sharks that smell some settlement cash in the water anyhow & 99% will settle as in a real courtroom there are no standings for the suits.

     

    M
    6 Jun 2013, 09:01 AM Reply Like
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