If you are doing any kind of business with Bank of America you must be the kind that likes losing money. A lot of money. On the June 18th edition of the Boston Globe, the articled titled “Bank of America rethinks free checking” described the initiative of Bank of America of the new era of “maintenance fees”. Of course the timing of this announcement is nothing short of brilliant knowing that all eyes are on the Gulf of Mexico disaster.
On March 24th Bank of America had an earth shattering press release, “Bank of America Introduces Earned Principal Forgiveness Among Enhancements to Its National Home Ownership Retention Program“. I attended a conference on June 16, 2010, organized by NAHREP Vista named “REO Panel in Your Market Area”. The room was packed solid with real estate professionals to get some direction from some of the most experienced panelist in Southern California regarding the foreclosure crisis. After personally logging 17 calls to the Bank of America Home Retention Center myself, I too wanted get an update on how many homeowners have been helped. I decided to ask one of the most experienced panelists on the board who happens to be one of the asset managers for Bank of America’s distressed inventory . This gentleman explained to me what really goes on behind the scenes. The fact is that there is no principal reduction. Bank of America is reducing the principal but creating a balloon payment so in reality there is no mortgage forgiveness. Bank of America would have to take a loss on their books and that is bad for the stock holders. In other words, the number of principal reductions done to date by Bank of America is a big fat 0.
Bank of America, and the former Countrywide, have been know to have a circle of friends that started way back with “the friends of Mr. Anthony Mozillo”. A group of government cronies who got special treatment. The millions of dollars of contributions given to Mr. Barney Frank and Chris Dodd for the banks safekeeping are nothing short of disgusting. We, the tax payers, have allowed Bank of America to take hundreds of billion dollars in TARP money, B of A in turn takes our tax money, buys conservative bonds at an annual rate of 4% making 10′s of Billions of dollars. They can afford to include their friends in the taking and in return show their stock holders enormous earnings. B of A and friends win. The tax payer gets conned with the aforementioned link above and the struggling home owner has a broken HOME due to the lack of relief, the real estate market takes more “distressed inventory” and the economy remains weak.
It is time for Bank of America’s stock to get to the Fannie and Freddie levels and off the NYSE. Nationalize them, closed them, but STOP “HELPING THEM”.