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  • This just in: The lawsuits against Bank of America (BAC -5.1%) are never going to stop. Despite the $10B+ settlement with Fannie Mae, U.S. Attorney Preet Bharara makes clear he will continue to aggressively go after BofA for selling fraudulent loans to the GSEs. Maybe this, not the downgrade, is what has the shares in a funk today. [View news story]
    Yeah unfortunately, Ken Lewis saw Countrywide as his destiny - Countrywide was willing to restructure its debt however the 1 billion B of A had invested made it too easy for Mr. Lewis not continue with his manifest destiny approach which has been reversed some what successfully by Mr Moynihan.

    The reason the board moved towards Brian was because it knew litigation would be ongoing for many years. I was there when they were completing the due diligence at the time of the purchase in 2008. when you have a trillion dollars worth of inventory now worth about about 400 million a lot of the properties in California, Nevada and Michigan Arizona and Ohio now very depressed real estate markets some of the biggest not to mention Florida and Texas has created the potential for a tremendous amount of litigation Florida and California, Ohio and the practices were unspeakable and before B of A could figure it all out they what countrywide had done with its underwriting practices the storm was already upon them worse than any hurricane. I still have reports and loan numbers of 10's of thousands of loan perhaps 100s of thousands of loans where fee's and surcharges that were meant to create profit margins are now the basis of what predatory lending practices of CHL are now or have been called into question. When I left as part of the lay offs in 2011 and went to work the next month of Chase my experience with CHL was what Chase has been and continues to try to avoid through a rigorous auditing process. No such process was in place at BAC Home loans until just before I left in 2011. They were trying it was just that countrywide the Home Loan division resisted the changes to maintain sales quotes and bonuses hence while she was trying to turn the organization around the resistance Barbara Doeser experience would eventually lead to her leaving the Bank. She tried to stop the bleeding it was just coming from too many places.

    BAC will eventual sell off enough of its assets to the point where a take over by one of the other larger Banks will be able to 5-10 % of the stock some where right around 10-11 per share or a 4 for 1 or 3 for 1 stock swap would be my guess. Before that happens the stock will see lows of $6 or $7 depending on the amount of litigation etc. Have a great day of trading tomorrow. I left in 2011 with the stock I was laid off in march and my stock was liquidated in April at about 13.25 per share which I had acquired in in January 2009 at about 7.20 per share since I sold my stock in 2011 it has never seen $13 dollars again. when I came to JPM July I took all that money and moved it into JPM at about 30.00 per in September I also put part of my BAC Severance package into JPM at the time. I believe in financials just not this financial.
    Jan 10, 2013. 08:24 AM | Likes Like |Link to Comment
  • Bank of America P/B Approaching Credit Crisis Lows [View article]
    On the way to restructuring or bankruptcy.. I would say by January 2012 4 years after they anounced the aquisition of Countrywide.

    Here is the Balance Sheet on Market Capitalization Litigation expected loss from the News:

    Settlement with BKNY and Other - 8.5 billion not approved Expect to see a settlement around 15-20 Billion lets estimate 10 just to be Safe.

    Class Action Suits Cannot tell you how but I see them come in Everyday at Marsh lets say 40-50 cases Qui Tam and Others
    Overtime, Borrowers, Real Estate Brokers, Individuals, lets conservatively say the cost to defend and settle 10 Billion

    In the Last Month the Market Capitalization has gone from
    97 Billion to 63 Billion Thats about a 30 Billion dollar loss in assets.

    Freddie and Fannie are expected to cost BAC another 20 billion in
    mortgage repurchases.

    The Insurance Carriers are expected to see another 10 Billion after Litigation AIG and others. The reserving has to be in that area..

    The revenue from lending is down based on the enconomic climate
    no one can get loans and if they can they are paying a fantastic rate that cannot be generating high profits. Credit cards are not being used - medium income is down amoung the employed.

    Hence, a 70 Billion dollar loss will not be so easily recouped by layoffs and asset sell offs.. My prediction the value of the BAC will drop as the assets are sold off pushing towards 2008 prices causing a break up of the Country's largest Bank - the Mortgage book will be sold off at a discount again flooding the housing market. Merril may go as an IPO or get sold to another brokerage at a profit what did Ken Lewis pay for Merril 50 Billion It was a steal and now Brian will have to sell it for 75. I am Bullish on restructuring. But Bearish on BAC .. I sold all my stock in April I would get back in at $3.00 if they anounced chapter 11 lets hope it stops there.

    This is what happens when you try to beat Wallstreet from North Carolina
    Aug 23, 2011. 02:35 PM | 1 Like Like |Link to Comment
  • Bank of America P/B Approaching Credit Crisis Lows [View article]
    I see a Bankruptcy or re structuring you cannot lose 10 Billion Dollars in Market Capitalization. B of A is facing Multiple Class Action Suits Expected to settle in the 10-20 Billion Dollar Range and Investor Settlements in the 10 Billion Dollar Range. Mortgage Buybacks from Freddic and Fannie in the 20 Billion Dollar Range. Lending on mortgages at 3-5 % or not lending at all AIG and the Others are Still coming lets not forget the Attorney Generals in every State that Suppose to be another 20 Billion. That's loses of 70-100 Billion Dollars and I dont see credit card usage and deposits increasing in gthe current economic climate.
    Aug 23, 2011. 01:41 PM | 1 Like Like |Link to Comment