Bank of America Settlement on Bonds That Soured Is Approved

A New York State Supreme Court justice on Friday approved an $8.5 billion settlement between Bank of America and a group of mortgage securities investors, but the ruling contained a caveat that could create new problems for the bank.

Justice Barbara R. Kapnick blessed the 2011 agreement to cover some of the investors’ mortgage losses, but she also said that some of the legal claims by the investors were excluded from the settlement.

Those claims cover potentially billions of dollars of mortgages that were modified to help borrowers stay in their homes.

Banking analysts estimate that Bank of America could have to pay more money to settle those claims, but the amount is unclear. They said the ruling was a reminder that the banks — try as they might — were far from putting their mortgage problems behind them.

“This just made the bank’s murky legal situation even murkier,” said Mike Mayo, a banking analyst at CLSA.

The ruling on Friday involves mortgages issued by Countrywide Financial, which Bank of America bought in 2008. Bank of America has spent years in court dealing with investors who bought bonds backed by Countrywide loans that went into default, causing huge losses.

Lawyers on all sides of the case spent much of Friday afternoon scrambling to interpret the ruling, which initially appeared to be a clear victory for Bank of America and Bank of New York Mellon, the trustee for 530 mortgage bonds bundled by Countrywide Financial.

On many of the legal issues raised about the settlement, Justice Kapnick sided with the banks over the objections of the American International Group, which was a big investor in the bonds.

Lawyers for A.I.G. contended that the settlement shortchanged investors and that Bank of New York Mellon did not act aggressively enough to try to recover more money from Bank of America. They said that the $8.5 billion settlement was a mere fraction of the total estimated losses.

Those issues attracted a lot of the attention in the case, but Justice Kapnick ultimately found that Bank of New York, in many instances, acted properly in helping reach a settlement.

“The trustee did not abuse its discretion in entering into the settlement agreement,” she wrote in the 54-page decision. “And did not act in bad faith or outside the bounds of reasonable judgment.”

She took one exception. The justice said claims by investors regarding loan modifications were excluded from the settlement because the trustee had agreed to settle the claims “without investigating their potential worth or strength.”

“On this issue only, the court finds that the trustee acted ‘unreasonably or beyond the bounds of reasonable judgment.’ ”

The issue of the modifications was raised by the bond investor Triaxx, and had been largely a footnote in the case until Friday.

Triaxx said that the trustee failed to investigate whether Bank of America was obligated to repurchase from investors the loans it modified, and how much those claims could be worth to the investors in a settlement.

According to a lawyer for Triaxx, John Moon, the terms of the mortgage-backed bonds clearly stated that at least $11 billion of the modified loans had to be repurchased. Mr. Moon said approximately another $20 billion in modified loans could also be repurchased, but the language in the bond contracts was less clear.

“The impact of these claims is significant, but it’s not immediately apparent how significant they are,” he said after the ruling.

Bank of New York contends that the contract language is not as straightforward as Triaxx makes it out to be. It also says that federal mortgage modification programs encouraged servicers to modify loans without having to worry about the risk of repurchases.

The trustee could have a difficult time pursuing claims that run contrary to a government policy intended to keep homeowners in their houses.

A statement from Bank of New York said the ruling “vindicated the trustee’s actions by overwhelmingly approving the settlement.”

A Bank of America spokesman said in a statement, “Any outstanding issues raised in the opinion can be addressed without undue delay.”

The ruling could serve as a precedent for other mortgage securities cases still winding their way through the courts five years after the financial crisis.

The 22 bond investors that agreed to the settlement included the money managers BlackRock and Pimco and Metropolitan Life Insurance Company.

Bank of America shares closed down 1.06 percent at $16.75 on Friday, while Bank of New York was down 1.39 percent to $31.96, on pace with other financial companies.

A.I.G. lawyers are planning to carry on their legal battle. “This case is very far from over,” the company said in a statement, adding that the ruling sets a “dangerous precedent that could eliminate important protections for investors.”

The next steps for Bank of America are unclear. Analysts said the bank might have to negotiate a settlement on the modification claims. But first, Bank of New York will have to investigate the merit of the claims — something the judge said it failed to do adequately the first time around.

“If it was up to me,” said Mr. Mayo, the banking analyst, “I would throw a couple extra billion dollars in the pot and call it a day.”

A version of this article appears in print on 02/01/2014, on page B1 of the NewYork edition with the headline: Bank Pact on Bonds That Soured Is Approved.  By MICHAEL CORKERY



7 Reasons to Own Your Home

7 Reasons to Own Your Home

7 Reasons to Own Your Home
Good information from Realtor Magazine

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®.

In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources:

To see how much you qualify for:  CLICK HERE
Jumbo loans also available.
The Passion of Blog!  Be Empowered!


720 or higher credit scores–key to Jumbo loans

Ok, so this blog will be a little boring but if you are in the market to purchase a home or a car listen up!

This information comes to us via so take a look:


I Called Todd!  Now I’m at 720

Which is better for your FICO score: Paying off your credit cards, or paying off your mortgage?

Most people say they would pay off their mortgage to increase their credit score the fastest. But when it comes to FICO scores, eliminating charge card debt is far more powerful than eliminating mortgages and car loans.

And if you think about it, it makes sense. When assigning a credit score, the scoring bureaus assess risk by asking one question: How likely will this borrower default in the next two years?

Most people prioritize their mortgage payments; they would rather skip a few meals than lose their home. So having a balance on your mortgage isn’t really that risky. But people aren’t quite as responsible with their Visas and MasterCards. In fact, even the most financially responsible people make a few bad decisions when it comes to the allure of credit card spending.

So keeping a low balance (or no balance at all) on your credit cards is a far better indicator of your financial situation, and your ability to pay upcoming bills.

The moral of the story: If you want to increase your FICO score, get your credit card balances under control!

Get Approved

Anyone looking to get approved for a loan, whether it is a SEC 184 Native American Dream loan or a jumbo loan that empowers buyers, the process is simple.  Please click on the “GET PRE-APPROVED” tab and we will be happy to help.
Oftentimes, we find that buyers in the market for a home are hesitant to find out what their credit scores are and see if they qualify.  The process is actually quite simple and painless.
If your credit needs a lot of work, we can always run it through the 2014 WISH MACHINE  check it out in action.  Our job is to give you information necessary to improve your credit.
If you are simply looking for a vehicle to add some extra monthly income to your current paycheck we have that covered as well–Empower Network is the vehicle for so many, including me.  Take a look
My life doesn’t change whether you get pre-approved or not, I will still drive the same car and live in the same house but you life can change depending on the credit.
If you already have impeccable credit and looking for a Jumbo loan, we are jumbo loan specialists.

5 Reasons to Hire a Real Estate Professional

Originally posted by  The KCM Blog
Posted: 03 Feb 2014 04:00 AM PST
2.3 Blog VisualWe are often asked if it makes sense to hire a real estate professional when buying or selling a home. We always emphatically answer – YES!
Here are five reasons why:


An agent will help with all disclosures and paperwork necessary in today’s heavily regulated environment. This helps remove much of the liability a buyer or seller could face.


Navigating today’s real estate and mortgage processes can be like walking through a minefield of challenges. Real estate professionals are well educated in and experienced with the entire sales process.


Negotiating such a large financial transaction can get tricky. Agents act as a ‘buffer’ in negotiations with all parties throughout the entire transaction.


Real estate professionals help buyers and sellers understand the true real estate value of a property in today’s market. This is crucial when setting the price on a listing or on an offer to purchase.


There is a plethora of housing information available today. The challenge is that some information appears to be in direct conflict with other pieces of information. A true real estate professional can simply and effectively explain today’s real estate headlines and decipher what they mean to you.
Choose a Lender that can get you pre-approved quickly and painlessly.  Whether you are choosing an FHA loan, a VA loan, a Jumbo loan or a specialty SEC 184 Native American Loan, we have the experience to keep the process simple.

What Issues do Realtors Face? — “I need more customers!”

What are some of the common problems that real estate agents face in growing their business?

As a Realtor for almost 20 years, I can attest to having several real estate problems or issues that many others also seem to have.  For instance,
#1  Inconsistent referrals or lack of customers.
Past clients working hand in hand with you on new referrals
Sometimes we get so busy working with current clients that we don’t spend enough time developing relationships that will produce future referrals and new customers.
Real estate in large part is driven by referrals.  The agents in the office with the largest production seem to have the biggest circles of influence.  While that may be part of it, reality is that those who spend time developing relationships produce more referrals.
From experience, I know that most Realtors are VERY good at their job.  They know how to stage a home, they know how to market their listings and they know how to write acceptable contracts, but they don’t always focus on pursuing new clients.
If you, or some agents in your office, are having difficulty receiving consistent referrals, what difficulties does this present?  Please reply and let us know.
For me, inconsistent referrals and lack of new customers means unstable/inconsistent income.  
Please comment with some issues that you have dealt with in growing your real estate business–if we can get a discussion going on this maybe we can all benefit from it.
Please comment on what you have done to overcome the lack of consistent referrals andwhat this has meant to your business
# 2  High Advertising Costs
Marketing Strategy BIG
What can we do to combat the cost of advertising?
As real estate agents, we like to get the word out for all listings.  Where do you spend money for advertising?   Signs, farming postcards, “Just Listed” or “Just Sold” postcards, real estate magazines, newspapers, websites, E Flyer Marketing, TV, other?
Please comment on “what difficulty does the high cost of advertising present?”
For me, it makes it more difficult to get the word about listings or services out as efficiently,
Please comment on “How does the high cost of advertising affect your business?”
For instance, for me I must spend more on advertising, shrinking the profit margins, and causing me to work harder for less income
Please comment on “What are some ways to solve the high cost of advertising?”
Blogging,  social marketing, low cost ads
Please comment on  “What would solving the high cost of advertising mean to you?”
# 3  Poor Client Loyalty 

Niche Marketing and Sphere of Influence Marketing help maintain loyalty.

How have you used these marketing techniques to assure client loyalty? 

Realtors have changed over the years.  Many years ago they would find a potential buyer at an open house or from a call from advertising, such as newspaper or real estate magazine, set an appointment to show a couple of homes in the customers desired price–and then get them pre-approved with a quality lender.
The problem with that strategy was that the buyers would often display poor or no loyalty to the Realtor.
Loyalty issues also arise when agents don’t farm a geographical location or regularly market to their databases.
Please comment on techniques that you have used to maintain client loyalty.
Please comment on what solving client loyalty issues would mean to your business
For most of it simply helps to have a friend in the business.

Homes for sale with in home bars — drown the Super Bowl sorrows

Homes for sale with in home bars — drown the Super Bowl sorrows

Well, on the night that crushed much of the Orange Crush nation, especially here in Denver, maybe it would help to have a great home bar.

If you don’t already have one, Google: Homes for sale in Denver with an in home bar.

It was hard to image that this game could start off so so badly.  Manny Ramirez doesn’t shoulder the blame for the whole game, but that errant snap into the end zone was the snow ball that started the avalanche of demolished dreams.

The defense tried to keep it close by only allowing two field goals on Seattle’s first two drives but then came the turnovers.

Interception, Interception for a touchdown, fumble, kickoff return for a touchdown, fumble —  OUCH OUCH OUCH!  Too much pain to handle.

About this time many TV’s where being shut off and many where making another trip HERE:

Basement Bar

basement bar 3

basement bar 2

Every Super Bowl Party in the future will be in this basement.
So now what houses that are actually for sale in Denver with something similar?  I am sure there are many and if you know of some, please comment on this page.
Here is one, don’t look at the price just image watching your favorite team in the NCAA Tournament in this home located at 4603 South Denice Drive, Cherry Hills Village, Colorado for a mere $9,500,000.
Talking about needing a Jumbo loan —  might need several Jumbo loans for this one.


This one can be seen on the Perry & Co.  website

Google:  Houses for sale with in home bars.
Well, that’s it for your Friend in the Business real estate blog for this weekend, we have reviewed homes for sale with wine cellars, homes for sale with swimming pools, homes for sale with tennis courts, and now homes for sale with home theater and walkout basements, and this one, homes for sale with an in home bar.
Coming soon–Homes for sale with grand entries.  Should be fun!  The Passion of Blog!  Be Empowered!
 Contributors to this Blog:

720 Credit? Here’s a little help!

How can I make corrections to my credit report?

If you find something wrong in your credit report, you should dispute it.

Under the Fair Credit Reporting Act (FCRA), both the credit reporting company and the information provider (the person who you have an account, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report.

If you find a mistake in a report from a credit reporting company, you should contact, in writing, both the credit reporting company and the company, that provided the information to explain what you think is wrong and why:

  • Provide your complete name and address, telephone number, credit report confirmation number, and account number for any account you are disputing.
  • Explain what information you think is inaccurate, clearly identify each mistake, explain why you are disputing the information and request that the information be deleted or corrected.
  • Include copies (NOT originals) of documents that support your position. You may want to enclose a copy of your credit report with the items in question circled.
  • Send your letter by certified mail, return receipt requested, so you have a record that your letter was received.
  • Keep copies of your dispute letter and enclosures.

Credit reporting companies must investigate the items in question.

This is usually done within 30 days unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the credit reporting company, it must investigate, review the relevant information, and report the results back to the credit reporting company.

If the company corrects your information as a result of your dispute, it must notify all of the credit reporting companies to which it provided the wrong information, so they can update their reports with the correct information.

When the investigation is complete, the credit reporting company must give you the written results and a free copy of your report if the dispute results in a change. (This free report does not count as your annual free report under the FACT Act.) If an item is changed or deleted, the credit reporting company cannot put the disputed information back in your file unless the information provider verifies that the information is, indeed, accurate and complete. The credit reporting company also must send you written notice that includes the name, address, and phone number of the information provider.

If you request, the credit reporting company must send notices of any correction to anyone who received your report in the past six months. A corrected copy of your report can be sent to anyone who received a copy during the past two years for employment purposes.

How to submit a dispute to the nationwide credit reporting companies

To submit online, by mail, or by phone, use the following contact information:
By mail: Click here to download the dispute form
Mail the dispute form with your letter to:
Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374
By phone: Phone number provided on credit report or (800) 864-2978
By mail: Use the address provided on your credit report or mail your letter to:
P.O. Box 4000
Allen, TX 75013
By phone: Phone number provided on credit report or (888) 397-3742
By mail: Click here to download the dispute form
Mail the dispute form with your letter to:
TransUnion Consumer Solutions
P.O. Box 2000,
Chester, PA 19022-2000
By phone: 800-916-8800

If you are dissatisfied with the resolution

If an investigation doesn’t resolve your dispute with the credit reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the credit reporting company to provide your statement to anyone who received a copy of your report in the recent past. Expect to pay a fee for this service.

You also have the option of submitting a complaint to the Consumer Financial Protection Bureau. To do so:

  • Go to:
  • Select the icon labeled “credit reporting”
  • Complete and submit the online form
  • If you suspect that the error on your report is a result of identity theft, visit the Federal Trade Commission’s Fighting Back Against Identity Theft website for information about identity theft and steps to take if you have been victimized. This will include filing a fraud alert and possibly filing a security freeze.
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