September 18, 2012
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I am tired of reading articles like this: http://finance.yahoo.com/news/fannie-mae-paid-bofa-premium-040153431.html;_ylt=AmyIUA2NS4x.FflOlvTDnX.iuYdG;_ylu=X3oDMTRwYXZqa2c4BG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yaWVzIG1peGVkIGxpc3QEcGtnAzVjZDczYzg2LTc3ZGItMzU5OC04ZDcyLTBhZDBkZGNlYzgwMwRwb3MDMQRzZWMDTWVkaWFCTGlzdE1peGVkTFBDQVRlbXAEdmVyA2U0MDBlMDEwLTAxNDUtMTFlMi1iZmNiLWU5MGVlMTU1MTA1NQ--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
Stop saying company x and company y did so and so. Start saying NAMES. Start saying Mr. X agreed to collude with Mr. Y to engage in so and so. Start saying names so those PEOPLE get prosecuted instead of the SEC or US AG just fining companies which fines are just passed off to the average consumer.
Isn't this simply a consequence of the legal status of corporations? As one particular politician put it: "Corporations are people too."
Corporations are considered as "individuals" for purposes of taxation. The main reason for incorporating is so the owners become shielded against personal liablities (with a few exceptions).
However, a corporation does not have a brain, mouth, eyes, heart, hands, legs, etc. So when I read an article saying Fannie Mae agreed to do basically a backdoor bailout with BAC, I want to know the names of the people working at Fannie Mae and BAC who came up with this.
I am tired of the lack of accountability by individuals who engage in questionable activities. And I am tired of seeing the purported regulating agencies constantly giving passes to individuals by entering into settlements where "the coporation neither admits nor denies liability but agrees to pay x million dollars."
From a legal standpoint I agree with the original post. When individual members of a company commit crimes, they need to be prosecuted as individuals.
From a media standpoint, telling me which companies were involved is more useful information than names of people I do not recognize.
Names would be a welcome addition to articles. However, the linked article raises more questions than it answers and it isn't clear if there was even anything amiss here.
Eventually, Fannie Mae agreed to pay a termination fee of $512 million to Bank of America, about $85 million more than it had to under its contract
Right after that, we learn the premium allowed Fannie to transfer the servicing rights three months sooner than it otherwise could have. I have no way of knowing if three months was worth $85 million, but someone must have thought so. Then we find out (and the math doesn't add up) that:
Fannie Mae ended up paying a total of $421 million to the bank because of a reduction of the number of loans in the portfolio.
But, we don't know how many fewer loans, just that the final number was $90 million less than the starting point and $5 million less than BoA would have been entitled to under the original terms.
Then there's an FHFA official who's either clueless, was misquoted or was talking about something entirely different than what the article is covering.
In a July 2011 email, one FHFA official wondered whether Fannie Mae squeezed Bank of America hard enough on price considering the bank was benefiting by "getting this stuff off their books."
The article is talking about mortgage servicing rights, that wouldn't have taken any "stuff" off of BoA's books.
Thanks for the replies. I guess I just get ticked off when I keep reading about how corporation X did so and so instead of how the CEO of corporation did so and so. I read about MF Global, for example, where 1.6 BILLION dollars has been stolen yet the CEO gets a pass, Corzine, and the regulatoray agencies basically say they don't think they can win so they won't prosecute.
Hire me. Please. I will prosecute. I will let the juries decide, not political connections. Stop with this nonsense that well it isn't right to prosecute if we aren't sure if we can win. Hire smarter people then.
The real problem is not overpaying by 21% - they should have canceled the contract "for cause" and paid nothing. Fannie Mae had to cancel because BAC was negligent in servicing these loans.