Bank of America's Bailout Bill

64 Pages of 'Confidential and Proprietary' Evidence

By Bluey Posted in | | | | | Comments (13) / Email this page » / Leave a comment »

Tim Carney at the Washington Examiner has another solid piece today on Bank of America’s role in the housing bailout bill. With the Senate set to vote on the legislation next week, conservatives are mounting a last-ditch effort to stop an outrageous abuse of taxpayer money.

The “confidential and proprietary” document Carney uncovered (click here to view) illustrates just how intricately involved Bank of America has been in drafting the legislation with Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.). Bank of America, of course, is in the process of buying Countrywide Financial Corp., which remains at the center of the mortgage meltdown.

A Senate staffer and a House staffer both told me on background that the House version of the bill — or at least the bailout portion — was drafted by Bank of America. I have also reviewed a March 11, 2008, "Discussion Document" currently circulating among Hill staffers that appears to have been drafted by somebody at Bank of America.

The document's title, "FHA Housing Stabilization and Homeownership Retention Act of 2008," is now the title of HR 5831, the House version of Dodd-Shelby, sponsored by Rep. Barney Frank, D-Mass.

The paper more or less spells out the mortgage bailout plan contained in the House and Senate versions. The date of the document is one month earlier than the date HR 5831 was introduced. If the document, stamped "confidential and proprietary" is valid, it points to a Bank of America source as the author of the House version of this bill. Calls and e-mails to Dodd, Frank, and Bank of America were not returned.

If this was happening under a Republican Congress just imagine the media scrutiny. We’re barely hearing a peep.

Want to buy an overpriced house in Las Vegas? You’re about to!Comments (16) »
Bank of America's Bailout Bill 13 Comments (0 topical, 13 editorial, 0 hidden) Post a comment »

The second bullet point of the Executive Summary points to declining home prices, higher interest rates, and a "general tightening of credit" as the cause of rapidly increasing delinquency and foreclosure. What about the unscrupulous lending practices of the mortgage companies? Without that there would be no -- or certainly less significant -- lowering of market prices, higher interest, and tightening of credit.

Now they want us to pay for a huge mistake that they (the lenders) are not stepping up and taking responsibility for. Just another reason this bill must be stopped.

"Let us have faith that right makes might, and in that faith, let us, to the end, dare to do our duty as we understand it." - A. Lincoln

I thought the Bear Stearns bailout was essentially a $23 billion bailout of the huge mistakes made by the industry. I'm not attempting to argue whether it was necessary, but this just seems an extension of the current policy.

it was a series of loan guarantees used to cajole Morgan Chase to acquire the dubious assets of Sterns. So far the government hasn't had to pay any actual money.

Furthermore the stockholders of Bear were not bailed out, they lost their ass.

"Nothing works like freedom, Nothing succeeds like liberty"

Loan guarantees absolutely have value. It's just value that is harder to explain and easier to hand-wave away.

Who got bailed out in the Bear Stearns deal, if the people who took the risks got hammered when the deals went bad?

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BSC, CFC, BA, LEH and the rest should be allowed to go bk if that's the result of their over-leveraged gambles. The taxpayers lose big (again) by subsidizing risky investments.

"Enlightened statesmen will not always be at the helm." -- James Madison

Bear Sterns did go bankrupt.

The Feds actions here, while potentially a dangerous precedent to set, were merely to allow for an orderly transition of B-S assets. B-S stockholders were barely compensated for the price of the property that B-S owned. Sounds like a great bailout to me. [That last sentence is sarcasm in case you can't tell.]

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Old Crow, you have no idea how much the taxpayers would suffer if the Fed had allowed Bear Stearns to go belly up. The rest would have followed right along and we'd have an economy that would make the Great Depression look like a minor economic down turn.

Those who control energy control society.

when this fraud deal goes through. I know some of the folks there.
The biggest scam in the last 40 years. You'll see.
A dagger in the heart of honest Americans - apologies to Chuck Schumer for using his phrase.
"Enlightened statesmen will not always be at the helm." -- James Madison

Apples and Oranges. I agree with you on the mortgage bailout plan. It is a bailout and it is wrong and it is designed to benefit BofA and Countrywide.

The Bear Sterns thing was completely different.

Those who control energy, control society.

And they are not the same. All the feds did for BSC is allow an 'orderly transition' as they ceased to exist. Very tough situation since their problems were due to a small part of the company, loose controls, and poor leadership - many good folks out of work now.

BA, on the other hand, is trying to dump its riskiest loans of the CFC portfolio on the pubic and only lose 10% of the loan value in the process. Congress is embarrassed and just wants this to 'go away'. This deal, will not only delay any recovery for our economy, but some models show it putting our entire economy in serious risk over the next few years (mini-crash, etc). This bailout deal needs to be killed, or at least delayed a year or so while more study is done regarding its effects.
"Enlightened statesmen will not always be at the helm." -- James Madison

Amen, Brother! As I've said on this site before, I have a sub-prime loan and am now almost 60K upside down. I'm in a bad situation, and this bailout bill will most definitely delay any recovery in the housing market.

If this bill passes, I probably won't be able to wait out the recovery to refinance. It may become financially irresponsible NOT to take the bailout.

My hope is a) the bill will not pass; b) if it does pass, I can use it as leverage to get my mortgage holder to refinance the original amount at a fixed rate. That wouldn't cost anybody anything. :)

Those who control energy, control society.

Here is the vote on the Bunning motion to refer the bill back to committee pending investigation of the scandals. Only 11 Republican Senators vote for it. I can certainly understand one of my Senators, Kay Bailey Hutchison, voting against it, because she's a squishy moderate who hopefully will soon move to the Governor's mansion where she can't do so much damage. But what the heck was Senator Cornyn doing voting 'Present'? Is there some tactical reason to do that, rather than actually voting?

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