• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Bank of America Drafted Dodd's Housing Bailout Bill

    The Washington Examiner has obtained a “confidential and proprietary” document produced by Bank of America and titled “FHA Housing Stabilization and Homeownership Retention Act of 2008.” The “Discussion Document” dated March 11, 2008, closely resembles the housing bailout bill drafted by Sen. Chris Dodd (D-Conn.) that the Senate is set to vote on within days. Senate staffers have told the Examiner‘s Tim Carney, “the bailout section is exactly what Bank of America and Countrywide wanted. Its obvious they got what they asked for.”

    Countrywide Financial is at the heart of the mortgage foreclosure crisis. It has $95 billion in loans on its books, many of the adjustable-rate-mortgage loans that have been defaulting at unprecedented rates. Countrywide has lost $2.5 billion in the last three quarters and had $6 billion in nonperforming assets on its book in the first quarter of 2008. Despite these red flags, Bank of America is proceeding to buy Countrywide for $4 billion. Analysts and stockholders have been highly critical of the deal since the beginning, wondering why Bank of America would be willing to take on such financial risk.

    The bill about to be voted on by the Senate would allow banks like Bank of America to pick their riskiest loans and dump them on the Federal Housing Administration. In exchange for taking just a 10% cut on the value of the loan, the banks would receive cold hard cash from U.S. taxpayers. Their risk would be eliminated, entirely shifted to the FHA and the U.S. government. Passage of the bill would make Bank of America’s acquisition of Countrywide much more profitable.

    The Bank of America-Countrywide merger would also help solve a huge political embarrassment for liberals in Congress. Rep. Barney Frank (D-Mass.) explained when asked about the discount loans Dodd received from Countrywide’s CEO: “The best thing for all of us is for Countrywide to just disappear. If Countrywide were a continuing entity we’d have to look at it, but they’re going out of business.”

    Posted in Ongoing Priorities [slideshow_deploy]

    18 Responses to Bank of America Drafted Dodd's Housing Bailout Bill

    1. Henry Mullaney, New says:

      I do believe that the Washington Examiner may have receive a document on BofA letterhead, however I do not for one minute believe that the document is genuine. The final legislation had input from many hands and many, many hours of negotitions among many parties. If BofA had predicted the final document on March 11, then they are clairvoyant. If they were clairvoyant, they would have avoided the mortgage debacle.

      I challenge you to put a photographic image of this alleged document, as well as revealing the source. Otherwise, I conclude that this is just more slimy slander.

    2. WA says:

      WE HAVE TO RETHINK OUR RELATIONSHIP TO OUR HOMES:

      http://pacificgatepost.blogspot.com/2008/06/housi

      A home is not a piggy bank but an expense.

    3. Sunslave, Davis says:

      I challenge you to put a photographic image of this alleged document, as well as revealing the source. Otherwise, I conclude that this is just more slimy slander.

      Can be seen here:

      http://corner.nationalreview.com/post/?q=ODJkN2Q3

    4. Jay says:

      I agree with sunlsave davis this sounds like slimy slander by conservatives who need to get over themselves!!

    5. Karl Denninger, Nice says:

      I have examined the content of the alleged document internally (the actual file structure.)

      It is a PDF file that was generated from a scan of a paper document. The artifacts inherent in scanning are present. The disclosure/disclaimer pages are consistent with what would be expected, and the letterhead looks genuine.

      If its a scam, its a very, very well-constructed one.

      I believe it is genuine, and before we pass any bill related to this document, subpoenas must fly to find out.

    6. Hutch says:

      Bank of America should use Obama's new Latin slogan,

      Vero Possumus. "We, in truth, have influence"

    7. Fred Smith says:

      Currently working at BofA, the document appears real in style and content.

    8. Thomas says:

      Fred – when did the Bank of Opportunity campaign end. does it make sense that the logo on the first page still says Bank of Opportunity as of March 08?

    9. Bob Lowry-Iraq says:

      http://bigpicture.typepad.com/comments/2008/06/di
      Here is one source for the document. Proof is in the pudding. I hope BofA goes bankrupt and disappears. They are a bunch of thieves anyways.

    10. Dan New Mexico says:

      Wow, I am shocked to see this from the "liberals" in DC? I must say I am even more suprised to see people attack the very people who put this out there. Did these same people cry foul when the main stream media called Florida for Gore? Did they cry foul when the main stream media said things like "the firing of US Attorneys by Bush was a first" when Clinton did the exact same thing to more US Attorneys? How about the cry from the media when VP Cheney had meetings with oil and gas companies and the main stream media claimed that they wrote the energy policy for the US? I can go on and on but the fact remains the very folks in DC that say they champion the cause for the "common folks" are doing exactly what they claim to be fighting against and that is getting the very best deal for their friends and themselves. I guess robbing from Peter to pay Paul is a good thing if you are Paul, it stinks if you are Peter.

    11. Michael says:

      Bad, bad news. Dodd's corrupt connections just keep on going. I wonder what's next? Along with Heritage, check out Freedom Works for information on what's going on with the Bailout and what you can do to stop it:
      http://www.capwiz.com/freedomworks/issues/alert/?…

    12. Mike, Maryland says:

      Ok, so has any enterprising reporter chased this to a source and connected it to Dodd? Confirmation would be nice. I work with distressed homeowners and have been trying to figure out why lenders turn down short sales that clearly reflect market value. This legislation could explain it. A 30% hit on principal sounds pretty good when the market value is 60% of the note amount. Take off another 10% for transaction fees and they are down to 50%. And there are plenty where the market value is starting at 50% of the debt. They're waiting for the big payoff. No wonder lenders would back this bill and slow roll shortsales (workout's, too). They get to stick the taxpayers with 50% of the loss instead of taking it all themselves.

    13. Dennis, Illinois says:

      I would like to know if this is true why isn't the news picking it up.

    14. Renard says:

      BAC is STILL RIPPING PEOPLE OFF!

      AFTER PAYING DOWN DEBT BY 17,000, leaving a balance of 100 plus dollars. I was justly told, I could no longer use my credit card. Although I was not allowed to used my credit card, BANK OF AMERICA allowed TWX PXS693 PREVENTION magazine to continuely charge my credit card. I never sign up for this magazine, the charges were dated at least two months subsuquent to BAC denying me access to my own credit card.

      When I asked, "How could charges be accepted to a credit card that has already been blocked?". BAC clearly was not interested in finding out why & how " TWX PXS693 PREVENTION 800-586-9633 NY" was able to add charges to a blocked Charge Card. Surely a scam that B.A.C. helps facilitate…..

    15. marvin says:

      Acccording to news, on JUne 10 this year, Obama Bailout turned a profit" of $1.8 billion in interest payments on the first set of bank loans that were repaid." That's a very good indication! :)

    16. Pingback: Morning Bell: Big Government Fails Again | The Foundry: Conservative Policy News.

    17. Mary says:

      We,ve had our home fixed loan,( no PMI) for 20 years! B of A gave us a final modification from $2395. to $2700.(Modification was notorized w/ammended note paperwrk) We paid diligintally for TWO YEARS! then one day we are monthly statement CHANGED from $1755. to $2700.! No explaination! Just PAY NOW!
      We begged and asked the to wait for fall/winter when our employers bonuses and raise would kick in.
      They said no problem. We kept paying 1755 and a little more every month. But not the 2700! B of A kept taking our money. Telling us all along were OK. Then suddenly 6 months later they take our last mortgage payment hold it in a suspension account. Do not apply it and refuse to apply it, even after many phone call with us willing to give them what ever we can to have it applied. NO IN DECEMBER THEY send us a DEFAULT letter and we are now facing a Trustee sale of our home first home we bough as newlyweds! and are raising are two boys in! Shame on you Bank Of America. And shame on you Judges and politicains for NOT protecting regular people!

    18. Little Fish Mary says:

      Bank Of America gave many modification with negative balances purposely left in escrow account of clients. They send the homeowner off with their new lower monthly payment. Tell them all their past dues are now rolled int o their their new bigger principle.
      They sit and wait and then years later. Demand immediate payment from home owners for those past dues in escrow which THEY fabricated and purposely left in escrow. When poor regular folk don't have the money they want IMMEDIATELY they forclose on their home."Walla! BIG FISH GULPS UP LITTLE FISH"

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×