Monday, January 7, 2013

Bank of America in $10B-plus mortgage settlement

Associated Press/Charles Krupa -
In this Dec. 13, 2012 photo, a customer
stops at a Bank of America ATM office in Boston.

Bank of America in $10B-plus mortgage settlement
Associated Press – 2 hrs 52 mins ago

Bank of America Corp. says it will spend more than $10 billion to settle mortgage claims …more

CHARLOTTE, N.C. (AP) — Bank of America says it will spend more than $10 billion to settle mortgage claims resulting from the housing meltdown.

Under the deal announced Monday, the bank will pay $3.6 billion to Fannie Mae and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide banking unit sold to the government agency from Jan. 1, 2000 through Dec. 31, 2008. That includes about 30,000 loans.
Its shares briefly edged up 9 cents to $12.20 in morning trading, its highest level since May 2011.
CEO Brian Moynihan said the agreements were "a significant step" in resolving the bank's remaining legacy mortgage issues while streamlining the company and reducing future expenses.
Bank of America bought Countrywide Financial Corp. in July 2008, just before the financial crisis. Countrywide was a giant in mortgage lending, but was also known for approving risky loans.
Fannie Mae and Freddie Mac, which packaged loans into securities and sold them to investors, were effectively nationalized in 2008 when they nearly collapsed under the weight of their mortgage losses.

Bank of America's purchase of Countrywide originally was lauded by lawmakers because the bank was viewed as stepping in to eliminate a bad actor from the mortgage market. But instead of padding Bank of America's mortgage business, the purchase has drawn a drumbeat of regulatory fines, lawsuits and losses.

Lord Strathclyde resigns as Leader of House of Lords

Lord Strathclyde resigns as Leader of House of Lords
Timing of his announcement caused an unwelcome distraction to the Coalition


David Cameron suffered a blow to the “relaunch” of the Coalition government as one of his most experienced Cabinet ministers announced his resignation.

Lord Strathclyde stood down with immediate effect as Leader of the House of Lords explaining that he wanted to resume his career in the private sector.

The timing of his announcement caused an unwelcome distraction to the Coalition as it prepared to set out its plans for the second half of its term in office.

Lord Strathclyde’s surprise announcement is also a setback to the Prime Minister who relied heavily on the advice of the 52-year-old hereditary peer. It follows the Government’s decision to abandon plans to reform the House of Lords – proposals that had been regarded with scepticism by Lord Strathclyde.

He was replaced as Leader of the Lords by Lord Hill of Oareford, who also becomes Chancellor of the Duchy of Lancaster and a member of the Privy Council.

In his resignation letter, Lord Strathclyde said “I never believed it was a career for life”, when he was appointed a minister in the Thatcher government 1988.

He said: “I started my working life in the private sector and at some stage always hoped to return. I would like to do so now.

Swiss bank Wegelin to close after guilty plea

Swiss bank Wegelin to close after guilty plea

By Nate Raymond and Lynnley Browning
NEW YORK | Fri Jan 4, 2013 8:27am EST

(Reuters) - Wegelin & Co, the oldest Swiss private bank, said on Thursday it would shut its doors permanently after more than 2 1/2 centuries, following its guilty plea to charges of helping wealthy Americans evade taxes through secret accounts.

The plea, in U.S. District Court in Manhattan, marks the death knell for one of Switzerland's most storied banks, whose original European clients pre-date the American Revolution. It is also potentially a major turning point in a battle by U.S. authorities against Swiss bank secrecy.

A major question was left hanging by the plea: Has the bank turned over, or does it plan to disclose, names of American clients to U.S. authorities? That is a key demand in a broad U.S. investigation of tax evasion through Swiss banks.

"It is unclear whether the bank was required to turn over American client names who held secret Swiss bank accounts," said Jeffrey Neiman, a former federal prosecutor involved in other Swiss bank investigations who is now in private law practice in Fort Lauderdale, Florida.

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