Think the taxpayers got a bum deal with the Bank of America/GSE settlement? You’re not alone.
Maxine Waters just blasted the deal. If the Democrats were still in charge of the House Oversight Committee, we wouldn’t be shocked at hearings, but with Darrell Issa in charge, we’re a little less inclined to envision it.
Congresswoman Maxine Waters, a senior Democrat on the House Financial Services Committee, issued the following statement today after Bank of America settled with Fannie Mae and Freddie Mac for $2.8 billion over the misrepresentation of loans that the bank originally sold to the GSEs:
“I’m concerned that the settlement between Fannie Mae, Freddie Mac and Bank of America over misrepresentations in the mortgages BofA originated may amount to a backdoor bailout that props up the bank at the expense of taxpayers. Given the strong repurchase rights built into Fannie Mae and Freddie Mac’s contracts with banks, and the recent court setback for Bank of America in similar litigation with a private insurer, I’m fearful that this settlement may have been both premature and a giveaway. The fact that Bank of America’s stock surged after this deal was announced only serves to fuel my suspicion that this settlement was merely a slap on the wrist that sets a bad example for other negotiations in the future.
I understand that the questions raised by fraudulent servicing practices were not addressed in these settlements, and I hope that Fannie Mae and Freddie Mac, along with their conservator, are more aggressive in pursuing banks for the fraud I documented in my Subcommittee during the last Congress.”