Foreclosure Giants Last Stand?

August 19, 2011

Bank of America's stock has dropped 20% in the this month and is now looking at another $10 billion lawsuit courtesty of AIG for fraudulent MBS offers. Last week, CEO Brian Moynihan sent out the following letter to his employees:

"All of you know that our stock price has suffered substantially over the last few months. One of my top priorities will be to restore a significant amount of the stock value we have lost as soon as possible. Our performance has never been stronger; our business model has never been most robust; our growth has never been more certain; and most importantly, we have never had a better nor deeper pool of talent throughout the company. We have the finest organization in American business today."

Wait...actually, two letters got mixed up here...this was actually the letter Enron CEO Ken Lay sent to his employees almost exactly ten years ago today, less than 4 months before the energy giant declared bankruptcy. As you may recall, Ken Lay died before he could be sentenced on conspiracy and fraud convictions. Here's some excerpts from Moynihan's letter:

"The most important point to keep in mind is that our company remains financially strong ...Customers and clients are doing more business with us across the franchise and we are deepening and strengthening their relationships with us. Deposit levels and new account openings are increasing. Loan growth outside the U.S. shows that we are effectively serving our clients’ global needs. Customer satisfaction is improving. ...We do not know how long this period of uncertainty will continue. Because we serve one in two households in the U.S. and have leading positions with the global Fortune 500 companies here and around the world – a market advantage in most respects – turbulence in the global economy will affect us as well...We are doing everything we must do to move forward. We are strengthening our balance sheet, addressing our mortgage issues and reducing the risks in that portfolio.... We cannot control the seas around us, but with the best franchise in the industry, and the best team in place to deliver its benefits to our customers, I am confident we will achieve our goals working together."

What more needs to be said? That the amount of fraudulent foreclosures the banks have enacted dwarf the scale of the California energy crisis Enron created? That their relationships with the US government are even more friendly than Ken Lay and Dick Cheney?

The real question that needs to be asked, is that when Bank of America, CITI, and Chase, end up with still more bail-outs as a result, how and why are ever more unaffordable mortgages going to continue to be serviced? Why are successfully paid mortgages going to failed and crooked banks? Even if these questions can't be easily answered, the safest place to shield your home from the corrupt and sinking mortgage industry is in the hands of a foreclosure defense lawyer.