Did Bank of America get another, secret taxpayer-funded bailout?Submitted by bobbyw24 on Thu, 01/13/2011 - 08:25
Last week, government-backed mortgage entities Fannie Mae and Freddie Mac fined Bank of America $3 billion for selling faulty mortgages that either have, or will default into, huge losses. Now critics are calling the deal a backdoor bailout because the sum is much lower than the losses for which the bank could be held liable.
In a letter to Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA), Democratic Reps. Maxine Waters of California, Brad Miller of North Carolina, Keith Ellison of Minnesota and Stephen Lynch of Massachusetts questioned the terms of the settlement.
“We request detailed information on how FHFA determined that the combined $3.3 billion settlement represent the best possibly recovery of funds available to taxpayers,” the letter said. The Bank of America press release does, however, list the fine as “approximately $3 billion.”