Countrywide’s headlong rush to write as many loans as possible was really an effort to extract as many fees as possible from those transactions. That’s how mortgage originators make their money. Countrywide’s brokers also systematically discriminated against minorities (about two-thirds Hispanic and one-third black); in over 200,000 cases, it jacked up interest rates and fees, and added less-favorable terms.
Adam Levitin’s analysis of the coming debit card fees from Bank of America and others is spot on, and it boils down to this: On the one hand, it’s an improvement to see banks being up-front about fees, instead of screwing you without telling you. On the other hand, a monthly fee has nothing to do with usage, risk, or anything else relevant. And, yet, maybe the biggest reason the banks are raising fees is because they can, because there isn’t any real competition in banking.
Gerri Willis from Fox Business News did just that. On the air.
Watch the latest video at video.foxbusiness.com
Turns out SunTrust is also planning to add a monthly debit card charge. If you’re banking with Bank of America, SunTrust, or Wells Fargo, are you sticking with your bank, or are you planning to switch to a bank that will continue to let you use your debit card without nickel-and-diming you?
As of October 1st, banks will be able to charge only 21¢ per transaction for debit cards, due to the Dodd-Frank Act’s Durbin Amendment. That’s a completely reasonable charge for sending a few bits of data over the wires. But charging comically large percentages for transactions is how banks pay for the mortgages on those skyscrapers, so they’re just going to charge you, instead.
Bank of America will begin charging $5/month to use a debit card early next year, and Wells Fargo is already testing a $3/month fee in some states. In other words, debit card use is going to get a lot more expensive for consumers.
Price tags on everything else may rise, too, since Visa and Mastercard (not banks, so not bound by the Dodd-Frank Act’s Durbin Amendment) plan to quadruple their merchant transaction fee.
In not-surprising-but-still-enraging news, it turns out that Countrywide kept its mortgage fraud racket alive by silencing whistleblowers. Like I said, not surprising. What is (a little) surprising is that this “legacy of corruption” still goes on at Bank of America, which bought Countrywide after it collapsed.
The pair of articles by mortgage industry watchdog and investigative journalist, Michael Hudson, exposes the past and present fraud in the Countrywide-Bank of America mega lender.
Bank of America (BOA) has announced they will provide some relief to homeowners with underwater mortgages. BOA said it will forgive up to 30% of the total mortgage for homeowners who are at least 2 months behind in payments and owe at least 20% more than their home is worth.
Consumers have complained for years about being charged $35 overdraft fees for a $2 purchase. At least one bank, Bank of America (BoA), has listened and will eliminate overdraft fees on debit card purchases.
Starting on June 19 for new customers, and in early August for existing customers, customers who attempt to use a debit card without sufficient funds will be declined. For example, if your account has $1.56, and you attempt to buy a $5 sandwich, your card will be declined, and you will not incur an overdraft fee.
California attorney Ben Pavone refuses to pay his credit card debt until Bank of America lowers his interest rate. Pavone has also threatened to sue Bank of America if they try and ruin his credit because of his non-payment.
Pavone asked BOA for an increased credit limit a few months ago, when he needed the extra cash. BOA replied by lowering his credit limit.
Note to banks accused of misleading investors: hypocritical defenses will not fly.
Bank of America told its investors that it would not pay bonuses to Merrill Lynch executives as part of the merger. At the same time, BOA authorized Merrill Lynch to pay up to $5.8 billion in discretionary year-end bonuses; $3.6 billion in bonuses were actually paid.