The Feel Good Story of the day!
WSJ: BofA Ends Sales of Certain Mortgages to Fannie
Market-Ticker: Bank of (sc)America Plays Symbolism
Bank of America is decreasing the number of loans it is selling to Fannie Mae in protest. This is huge.
Having worked in the mortgage business, we can tell you these absolute facts:
1) People were never coerced into any loans,
2) The Sub-Prime disaster was caused by Democrats and their policies,
3) The GSA system is corrupt,
4) Any loan deemed "toxic" was at one time guaranteed by our government,
5) Today's mortgage 'issues' are not real, but are efforts by liberals to dictate to and control our banks.
Countrywide slipped from a $45b valuation in April 2007 to a $4b BofA buyout in January 2008 because the company's policy was to process loans that were guaranteed (encouraged) by the US government. They did this with zero critical thought. If it was a loan that Fannie would buy, Countrywide would offer it to home buyers.
There was never any thought to saying "no" to the government back then. It appears that has changed.
The government has penalized BofA $1.3b for non-fraudulent fraudulent loans. This is just a new tax on banks.
There are other buyers of loans. We hope BofA continues to avoid the government's attempts at pseudo-nationalization.