Ally Bank, Formally Known as GMAC, to Pay Fannie Mae $462 Million Over Bad Mortgages, BoA Sued by Allstate

GMAC, who changed their name to Ally Financial, is paying Fannie Mae $462 million to dump off their bad mortgages.

Ally Financial Inc, the lender formerly known as GMAC, on Monday said it agreed to pay $462 million to Fannie Mae (FNMA.OB) to avoid having to repurchase poorly underwritten mortgages sold to the housing finance giant.

Ally, which is majority-owned by U.S. taxpayers, said the agreement releases its Residential Capital LLC mortgage unit from any liability related to bad underwriting on $292 billion worth of loans sold to Fannie Mae, itself about 80 percent owned by the government.

Residential Capital owns GMAC Mortgage and Ditech Funding.

Ally, which is expected to go public next year, announced a smaller settlement with Freddie Mac (FMCC.OB) in March. Resolving questions about its potential liability could help Ally attract investors.

The lender, which is 56 percent owned by the U.S. government, said the agreements reduce the risk in its mortgage operations going forward.

Nice huh? Fannie Mae absorbs $292 billion worth of bad loans for less than half a billion dollars? According to the Wall Street Journal, Fannie Mae and Freddie Mac were demanding banks pay back bad mortgage loans when banks violated their mortgage purchase agreements.

Fannie and Freddie collected more than $9 billion from banks during the first three quarters of the year. At the end of September, another $13 billion in requests hadn’t been paid, including more than $4 billion that have been outstanding for more than four months.

Another Major Ripoff, Another Slap on the Wrist Fine - Countrywide Settles for $108 million

It's no wonder we get fraud, abuse of customers, ripoffs as standard fare by corporations.

Countrywide agrees to pay a $108 million fine for excessive fees on home loans, one of the biggest fines by the FTC.

When homeowners fell behind on their payments and were in default on their loans, Countrywide ordered property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property, according to the FTC complaint. But rather than simply hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors. The subsidiaries marked up the price of the services charged by the vendors – often by 100% or more – and Countrywide then charged the homeowners the marked-up fees. The complaint alleges that the company’s strategy was to increase profits from default-related service fees in bad economic times. As a result, even as the mortgage market collapsed and more homeowners fell into delinquency, Countrywide earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue.

Countrywide is now owned by Bank of America. In 2008, Countrywide held a mortgage portfolio valued at $1.4 trillion.

Countrywide even tried to skirt bankruptcy law and make broke homeowners, now out of a house, pay even more fees after the fact.

S**t Hitting the Fan on SEC Probes and Criminal Charges

I am shocked at this moral bankruptcy. This is probably one of the worst cases that we have seen. - U.K. Prime Minster Gordon Brown

Really? You're shocked now? We've not shocked, we're shell shocked.

From the BBC:

"Hundreds of millions of pounds have been traded here and it looks as if people were misled about what happened. I want the Financial Services Authority to investigate it immediately. - Gordon Brown

Germany's Prime Minster is also taking about taking legal steps against Goldman Sachs.

Subprime Culprits Get $21 Billion to "Refinance" Mortgages

The Center for Public Integrity in a new report, Subprime Players Get Tax Money To Fix Subprime Mess , show the very same corrupt predatory lenders, Countrywide being at the top of the list, are now receiving U.S. taxpayer money to modify mortgages.



Firms that fed off the subprime lending frenzy that devastated the banking system are lining up to collect more than $21 billion in taxpayer funds meant to help bail out borrowers now in trouble on their loans.

Settlement on CountryWide Predatory Loans - $8.6 Billion

A Settlement of $8.6 Billion was reached today on a lawsuit by 9 states.

Maybe more people and states need to plain sue to be able to restructure their mortgages and principles so they might have a prayer's chance of staying in their homes.

Some details:

Bank of America, which bought Countrywide in July, reached a deal with attorneys general representing 11 states in which it will offer more affordable and sustainable mortgage payments for borrowers who had financed their homes with subprime loans or adjustable-rate mortgages serviced by Countrywide.