Rep. Brad Miller, a North Carolina Democrat who is a longtime critic of the big banks' mortgage lending misdeeds, contends they might be, Fortune reports . He wants a top federal regulator, the Federal Housing Finance Agency, to join investors who are trying block the megadeal BofA (BAC) unveiled late last month, according to a letter he sent the FHFA this month.
BofA said June 29 it would pay $8.5 billion to resolve mortgage-repurchase claims filed last fall by major institutional investors including BlackRock and Pimco. Under the deal, Bank of New York Mellon (BK), the trustee for the trusts holding residential mortgage-backed securities issued by BofA's Countrywide unit, won't force BofA to repurchase mortgages that failed to meet the bank's underwriting guidelines.
BofA called the settlement an "important step" in moving past the problems it took on in its 2008 acquisition of Countrywide, the giant subprime lender that nearly collapsed in the early stages of the financial crisis. Investors have feared that the Countrywide deal exposed BofA to massive repurchase costs due to Countrywide's apparent failure to abide by the so-called representations and warranties in bond offering documents.
Miller, who has been complaining for years about the big U.S. banks' failure to lend responsibly and about regulators' failure to rein them in, suggests in the letter that the BofA settlement may be a better deal for BofA than for holders of mortgage-backed securities – including U.S. taxpayers…..
Read more at http://finance.fortune.cnn.com/2011/07/11/congressman-takes-aim-at-bofa-deal/
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