Did you think local banks were finally in the clear? Sorry, but no. Looks like Bank of America is being investigated yet again. New York Attorney General Eric Schneiderman is targeting BofA, the former pride of Charlotte, in a new investigation thats looking into the validity of thousands of mortgage securities and their associated foreclosures. According to Huffington Post, two persons involved in the new probe told the liberal news website that the investigation has already begun and is part of a bigger investigation into whether mortgage companies and Wall Street firms took the necessary steps under New York state law when creating mortgage-backed securities.
According to the Huffington Post story, various studies, as well as court testimony, have revealed that a substantial number of banks failed to give required documents to trusts that bought bundled loans. Those trusts were brought up short when they tried to seize borrowers homes, because they didnt have the proper documentation. (In other words, the trusts were trying to grab some poor schmoes homes even though they had no proof that they owned the mortgages.) The result of the new New York probe if it turns out that proper documentation wasnt passed along by the lenders would likely prove extremely costly for the banks, which could be forced to buy back the faulty bundled loans.
N.Y. Attorney General Schneiderman is not likely to back down, since he was elected largely as a result of his anti-Wall Street approach. His new probe could also complicate i.e., completely screw up a settlement agreement, currently being negotiated by the Obama administration, state attorneys general and bank regulators, to resolve an enormous number of claims of foreclosure abuse.
Heres what this writer is still wondering: When, if ever, will local mainstream media start acknowledging the obvious fact that the citys former corporate overlords, the big Uptown banks, are now mostly an embarrassment?