Bank of America Drafted Dodd’s Housing Bailout Bill
Posted June 20th, 2008 at 12:47pm in Ongoing Priorities 
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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.”
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15 Responses to “Bank of America Drafted Dodd’s Housing Bailout Bill”
Henry Mullaney, New Hampshire on June 20th, 2008 at 12:47pm said:
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.
WA on June 20th, 2008 at 12:47pm said:
WE HAVE TO RETHINK OUR RELATIONSHIP TO OUR HOMES:
http://pacificgatepost.blogspot.com/2008/06/housing-consumption-not-investment.html
A home is not a piggy bank but an expense.
Sunslave, Davis on June 20th, 2008 at 12:47pm said:
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=ODJkN2Q3NTY0MjAwYjJlNTY0NTJmMWEzZTI1OGZjZTg=
Jay on June 20th, 2008 at 12:47pm said:
I agree with sunlsave davis this sounds like slimy slander by conservatives who need to get over themselves!!
Karl Denninger, Niceville FL on June 20th, 2008 at 12:47pm said:
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.
Hutch on June 20th, 2008 at 12:47pm said:
Bank of America should use Obama’s new Latin slogan,
Vero Possumus. “We, in truth, have influence”
Fred Smith on June 20th, 2008 at 12:47pm said:
Currently working at BofA, the document appears real in style and content.
Thomas on June 20th, 2008 at 12:47pm said:
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?
Bob Lowry-Iraq on June 20th, 2008 at 12:47pm said:
http://bigpicture.typepad.com/comments/2008/06/did-boa-write-t.html
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.
Dan New Mexico on June 20th, 2008 at 12:47pm said:
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.
Michael on June 20th, 2008 at 12:47pm said:
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/?alertid=11529276
Mike, Maryland on June 20th, 2008 at 12:47pm said:
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.
Dennis, Illinois on June 20th, 2008 at 12:47pm said:
I would like to know if this is true why isn’t the news picking it up.
Renard on June 20th, 2008 at 12:47pm said:
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…..
marvin on June 20th, 2008 at 12:47pm said:
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!