US sues Bank of America for $1 billion

[VirtualStranger]

http://dealbook.nytimes.com/2012/10/24/federal-prosecutors-sue-bank-of-america-over-mortgage-program/?hp

Federal prosecutors sued Bank of America on Wednesday, accusing the bank of carrying out a mortgage scheme that defrauded the government during the depths of the financial crisis.

In a civil complaint filed in New York seeking $1 billion from the bank, the Justice Department took aim at a home loan program known as the “hustle,” a venture that Bank of America inherited with its purchase of Countrywide Financial during the crisis. Prosecutors say the effort, created in 2007 but kept alive through 2009 by Bank of America, was designed to churn out mortgages at a rapid pace without proper checks on wrongdoing. The bank then sold the “defective” loans to Fannie Mae and Freddie Mac, the government-controlled housing giants, which were stuck with hefty losses and foreclosed properties.

Hell yes.

[nickiknack]

FUCK YEAH!!!

[Yaezakura]

Hell, it's about time.

[ThunderWulf]

This is news I've been wanting to see for a very long time.

[Witchyjoshy]

I think we need a ticker tape parade as celebration

[Saturn500]

Finally, geez!

[RinellaWasHere]

That's fantastic.

[largeham]

Finally.

[Lt. Fred]

One billion? Not one thousand billion? Or a gazillion? Nope, only one billion dollars of harm done- at maximum. Yeah, this is just cover up by other means.

[largeham]

One billion? Not one thousand billion? Or a gazillion? Nope, only one billion dollars of harm done- at maximum. Yeah, this is just cover up by other means.

Also guess how many will go to jail. Or how many execs will personally face the consequences.

[Material Defender]

One billion? Not one thousand billion? Or a gazillion? Nope, only one billion dollars of harm done- at maximum. Yeah, this is just cover up by other means.

So very pessimistic.

Still, the start of action is the start of action. I think the US justice department is testing water with this one. A success here could lead to further actions.

[ThunderWulf]

I think we need a ticker tape parade as celebration

LOL! That's definitely going in my sig.

[Stormwarden]

It's about time! How long we have all waited for this.

[Sylvana]

One billion? Not one thousand billion? Or a gazillion? Nope, only one billion dollars of harm done- at maximum. Yeah, this is just cover up by other means.

So very pessimistic.

Still, the start of action is the start of action. I think the US justice department is testing water with this one. A success here could lead to further actions.

Why do I feel like the bank can just soak the damages and pass off all the costs onto their consumers. Or worse yet, soak the damages and somehow get more support from the government.
When banks and large corporations go to court, they always win, even when they loose the case, they simply write off the loss and carry on like before knowing that they can outspend their opponents in every way. Not to mention that not a single person who was actually behind this will be affected, even if this cases causes bank of America to fold, all that will happen is the people responsible will leave with huge severance packages, and all their employees and customers will loose their jobs and savings.
The banking executives know they will never be harmed in any realistic way so they continue like they always have.

[Material Defender]

Why do I feel like the bank can just soak the damages and pass off all the costs onto their consumers. Or worse yet, soak the damages and somehow get more support from the government.
When banks and large corporations go to court, they always win, even when they loose the case, they simply write off the loss and carry on like before knowing that they can outspend their opponents in every way. Not to mention that not a single person who was actually behind this will be affected, even if this cases causes bank of America to fold, all that will happen is the people responsible will leave with huge severance packages, and all their employees and customers will loose their jobs and savings.
The banking executives know they will never be harmed in any realistic way so they continue like they always have.

Testing the waters. As in they are seeing if they can win the case on civil grounds before they go into a more brutal and direct justice case. Plus, a civil case means that the money is going to someone. Since the people, not the government was affected, it will be likely given to victims of the frauds. Not everyone can insulate themselves as well to seeing their wealth destroyed as others. Those who have money are used to spending it. Poorly. Because it doesn't matter to them.

But the problem of "Golden Parachutes" and wealth disparity is mostly to be answered with changing the corporate culture, not with having the government agencies. THey do what they can and I'm happy for that.