Tuesday, October 19, 2010

PIMCO, Blackrock, NY Fed Demand Bad Loan Repurchases from Bank of America

Well now we know what institutions are going after Bank of America(as reported here last night):

"Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said.

The bondholders wrote a letter to Bank of America and Bank of New York Mellon Corp., the debt’s trustee, citing alleged failures by Countrywide to service the loans properly, their lawyer said yesterday in a statement that didn’t name the firms. "

Quick Take:

The market tanked on the news as the foreclosure crisis continues to deteriorate and threaten the very existence of the TBTF banks.

Bank of America's stock sank below $12 on the news:

Stocks are now down 200 points on the session as Wall St tries to get it's arms around this shocking development.

The reality here folks is the pigmen are now starting to turn on each other as the fraud becomes exposed.

Any smart fellow knows that you want to be the first one off the boat when the ship starts sinking so I am not surprised that the best firms on Wall St(Blackrock, PIMCO) are the first ones that are looking to bail before this sucker takes on too much water.

The fireworks have just begun.

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