Comments on: Is Bank of America preparing for a Chapter 11? Wed, 16 Jul 2014 00:47:01 +0000 hourly 1 By: echobravotango Fri, 11 Nov 2011 20:51:56 +0000 Tank of America is in sooo much more trouble than they want anyone to believe. I’ll give you just one example of why this is true. ReconTrust Co. the repo arm of B of A is a wholly owned subsidiary of that bank that is responsible for running the foreclosure auctions of B of A. In one state alone RepoTrust website lists more than 5000 homes to be sold at auction.
The problem is that many of the “assignments” are illegal since either the entity making the assignment lacks legal standing in the matter since it is not a legal party of interest. Parties with no legal claim can not assign anyone to do anything.
The contract is a nullity and any subsequent sale would be voided immediately by even the lowest Court in the land and expose the seller to damages in further litigation. This in conjunction with clearly separating the Deed of Trust from the actual Promissory Note breaks the Chain of Title further voiding any claim a Trustee may try to assert in moving the action forward or assigning a different Beneficiary or Trustee to acts on its behalf. I have attended several of these auctions and I can say each time I have attended not one person is bidding on the sale of those properties. It reeks of the SEC v. Deutsche Bank lawsuit when DB was fined $25 million for padding their auctions and buying their own properties to artificially inflate their sale rates.
If that turns out to be the case here, Tank of America is going down.

By: stevedebi Wed, 09 Nov 2011 21:08:47 +0000 Makes sense to me; BOA is transferring risky debt to the parent company so that it is covered by the FDIC during a bankruptcy. I don’t know if there is any truth to it, but it is plausible. Unsavory, but possible.

By: OOPSIE123 Tue, 08 Nov 2011 07:04:44 +0000 @ Whyzat:

What happened after Lehman x 3 would likely be the short-term effects of a potential BAC bankruptcy.

By: Whyzat Sun, 23 Oct 2011 06:22:43 +0000 These are certainly interesting and shaky times economically and politically. The crimes by the government must unravel and get exposed.

I’m just one of the average 99% with kids and a mortgage struggling from month to month to cover the bills to feed my kids and be able to get to work.

Above are big topics – flying way above my head but I would appreciate if someone could explain the consequences IF Bank of America fails and goes down?

Seems like there is a bad outcome either way; bailed out by the Fed will create outrage and a crashed dollar and crashed Wallstreet.

Could someone elaborate on the consequences in the scenarios that are alive and playing?

If everyone emty out their savings on the 5 November so there is no cash in the big banks – what will happen?

Will this cause the dollar to crash and maybe other major currencies to soar?

By: JeffBoyd Fri, 21 Oct 2011 03:52:18 +0000 I am sorry you have thrown your lot in with folks like Henry Bloget having given up analysis and moved into the propaganda business. This is a shame.

You wrote a reasonable article back in 2008 about Countrywide being bankruptcy remote. Why don’t you write an article on that topic again? You keep writing as though Bank of America has absorbed all the potential liabilities and I think you know that this simply is an argument that has been rejected by all but a single New York judge who has allowed discovery on the topic to proceed. Allowing discovery is a long way from saying BAC is liable but you continue to ignore this simple fact along with the decisions from courts in other States. How about it Mr. Whalen? You are a very bright fellow, why not write an article on the topic?

Now you write an article saying that Merrill Lynch selling some derivative contracts to the bank holding company is an indication that the parent company is about to file bankruptcy. This is so absolutely weird that I have a hard time even knowing what questions to ask. How is this for a starter, every company I have ever worked for had transactions between different subsidiaries for good business purposes and yet none of them ever filed bankruptcy. I’m just completely baffled as to why you would write something so misleading when I think you know better.

Oh well. I guess this sort of thing is the way of the world. Maybe I’m just missing something but I think your intent is to create fear and we all know how fear and panic impacts banks.

By: edgyinchina Fri, 21 Oct 2011 02:30:17 +0000 “the Dodd-Frank law which cuts about half of the profits for big banks in the electronic payments market.”… I want this bs statement proved…. Tell me EXACTLY HOW D-F cuts about half of the profits for banks…. Tell me… EXACTLY…. I want proof….
BoA should not be allowed to file bankruptcy… they should be prosecuted for fraud, violation of SEC rules, violations of banking rules and regulations…
These people need to see jail time… I steal $10 and go to jail for 10 years, these people steal 10 billion and get a bonus… And you call that capitalism…. I call it grand theft…

By: DrJJJJ Thu, 20 Oct 2011 21:13:34 +0000 Banks have had to try to absorb almost a Trillion in foreclosures and now they’re the target of even more hate! My question: how many of the flakes that lied about their income to gamble on a home miles above their means have been prosecuted? You know the ones that have stopped making house payments and have lived for free for years, then they sell off parts of the house and send the salvage back to the tax payer! Start in Nevada! All ya need to do is ask for W2s from these flakes when they give it back to us! It’s a Fed Offense FYI to lie on a Fed backed mortgage loan doc and I’d bet millions did-and most of Nevada!

By: SC81 Thu, 20 Oct 2011 20:50:32 +0000 As stated in article other banks have already done this and BAC may finally have been advised to do this with their recent re-org and “new BAC” plan. Also, it seems that this makes sense if they put Countrywide into bankruptcy (the source of most the problems) which, according to BAC comments a few months ago has been kept as a separate entity.

By: JeffBoyd Thu, 20 Oct 2011 19:34:51 +0000 I always enjoy Chris Whalen’s commentary but I must admit that I have been disappointed with his commentary regarding BAC over the last year or so. He generally (not always) raises points that have some validity and are perfectly enjoyable to read but he has ignored key points for reasons that I am not sure of.

Two key points that he is ignoring here:

1) Merrill Lynch would have compensated the bank holding company for absorbing the risk relating to these instruments. His article makes it sound like they are moving assets/liabilities around between legal entities at something other than fair value which is the equivalent of accusing them of fraud.

Sales between legal entities are quite common are they not Mr. Whalen?

2) Exactly how would a sale from Merrill to the banking subsidiary be an indication of a bankruptcy filing by the parent Mr. Whalen? If you are talking about a sale from the holding company maybe there is an argument but this simply is not the case now is it Mr. Whalen?

Very disturbing that a man with your intelligence and skills has gone down this route.

One other question for you Mr. Whalen. You wrote about the potential for Countrywide being bankruptcy remote back in 2008. Exactly why do you ignore this possibility now? It is an important issue and I would encourage you to write about this once again although I would sure appreciate some balance for a change as opposed to ax jobs.

By: Ivan_F Thu, 20 Oct 2011 13:22:18 +0000 Here’s another possible explanation:

The likelihood of a downgrade is lower with the bank as the CP instead of the broker-dealer. This, in turn, lowers the risk of massive contract unwinds from downgrade triggers in the swaps agreements.