Foreclosure-Gate: Banks Offering A 40 Year, 2% Loan Mod To Cover It Up

11-14-2010 • NakedCapitalism.com/

Banks are going to qiuite some lengths to avoid doing principal mods. I’d love to know how Bank of America will book this loan versus the it one currently has. Lawyers for borrowers have been pushing principal mods when the bank is having trouble proving standing and is suddenly very willing to negotiate. But deals are confidential, so I have not gotten any reports as to success. Comments from the reader who passed this along: This is a BAC mode from 10/8. Note that there is only a two week window to execute this. Note the terms. Deferral of a portion of the principal. FOURTY YEAR MATURITY. 2% interest. This is one hell of a mod. I wonder if this was cooked up as this loan has a Doc problem behind it. The mod would eliminate all the paperwork issues. I also wonder how this new loan will be accounted for. I can’t tell if this is in a pool or actually owned by BAC. But if it is going on someone’s books at par then the whole thing is just a scam. This is not a loan. It is a patch to gloss over accounting and regulatory problems.