U.S. vs. Mozilo: The Potential Countrywide Case

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Aug. 20 (Bloomberg) –- Mendon Capital President and CEO Anton Schutz and Bloomberg’s Keri Geiger discuss Bank of America’s $17 billion settlement over mortgage-backed securities and a civil lawsuit against Countrywide co-founder Angelo Mozilo. They speak on “Taking Stock.” (Source: Bloomberg)

Bank of america settlement -- expected to settle a huge civil claim, upwards of 17 million on issues related to the issuance of mortgages.

Bank of america acquired this in 2008 and 2009. the potential civil suit or pending civil suit is tied into that.

Essentially after the settlement we are expect it to see a civil suit for the same issues.

It all goes back to the subprime mortgages largely blamed for fueling the financial crisis.

Of course of which countrywide was the largest issuer right up to the run-up of the financial crisis.

How would something like this work, considering i am sure there were documents checked by lawyers about liability under the sale?

It has been over seven years.

It really has been vital while.

I am tired of the shareholders being penalized for the ax of individuals.

-- it really has been quite a while.

It has cost bank of america shareholders close to 70 billion in terms of all the settlements and court costs.

Andrew is a low-- mazilo paid for by bank of america.

Why are shareholders paying the price for actions of countrywide shareholders?

Is it bank of america shareholders paying for action by the then ceo ken lewis?

That is true, he did these deals, no doubt about it.

At some point, who should be punished?

Corporation or individuals who perpetrate these actions?

That is the argument we have been wrestling with with all of these.

Jpmorgan master.

Then citigroup paid $7 billion last month for the same mortgage related issues.

Who should pay for that?

And really, who is to blame?

Because also, you have to understand the justice department travails and there is a fine paid, no one is writing a check to the individuals who suffered because of the subprime crisis.

With the bank of america settlement in previous settlements you have a portion i goes to consumer relief.

We will see how that gets paid out to consumers.

Whether it helps those who were hurt by the crisis, we will wait and see.

A large chunk goats -- go straight to the government.

You are correct in that a lot of it goes to the government and you have to see how that trickles down.

Also a case of being able to draw a line under a very painful torsion under bank of america and would be good for shareholders.


I was surprised the stock was not more today.

I think it wanted definitive news.

I think if you look at the charts of the stocks, they were all substantially higher.

Would be nice to remove this as overhang.

What is the business looking like right now for bank of america?

I think they have been a good job of getting the cost out and selling nonstrategic areas.

They are not a great little town community bank.

They have been selling off in other places.

I think it helps the cost structure as well.

I think they're trying to right size the ship.

If you look at the market share throughout the industry, tremendous power.

They just have to get the cost right and strategic focus on making money rather than preserving capital to pay settlements.

Let's say the settlement does come through in the civil suit goes forward.

I think it is terrific if they start pursuing individuals.

I think it is much bigger news than just the settlement.

I think it could be cutting-edge.

Any response from anyone in

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