BofA, Perhaps Countrywide Wrote Dodd-Shelby Bailout – THIS NEWS MUST GET OUT THERE!

Posted on June 21st, 2008 in Daily Mortgage/Housing News - The Real Story

None of us really believed that Dodd could come up with anything close to this. Just go through transcripts or videos and look at the language and terminology he used just a few months back when referring to the subprime and credit meltdown. Think back to the left-field, irrelevent questions he asked at hearings when he could have made a difference by asking the right questions and getting information out. I have always wondered who was behind it all. Now we know what $70k in contributions, which is what BofA has given Dodd in the past 18-months, will buy. Only Hillary and Obama have received more from BofA.

This $300 billion Dodd-Shelby bailout is an absolute crime. It bails out the banks by limiting their loss to 10%; a joke since many of the problem areas like CA are down as much as 30% already on the median in the past 12-months and the rate of acceleration of the price declines are picking up steam. The subprime crisis is nearly over and now Prime, Alt-A, Pay Option ARMs and Home Equity Lines/Loans are failing. If they get this $300 billion passed, another $1 trillion+ will have to come on its heels for all of the other bailouts.

This needs to be fought and/or vetoed or it’s potentially $300 billion of taxpayer money down the toilet. Bernanke already cost global citizens enough by ratcheting down rates the most in the shortest amount of time in history, sparking a massive inflation wave in order to save the very investment banks who started all of this in the first place. Now, unless we all do something and get this story out there, another $300 billion will go up in smoke.

The National Review Online has obtained an internal 64 page document on Bank of America letterhead dated March 11th that matches the Dodd-Shelby Bill almost identically (see below).

First, we find out that Dodd is a Countrywide “insider” who claimed ignorance over being given special considerations saving him $75k over the life of his loan and is so ignorant he didn’t read his loan papers. Now, we find out that BofA, who is supposed to be closing on their Countrywide purchase in the next few months, wrote the Bill for him.

If this Bill passes, BofA’s Countrywide buyout is much more palatable and the $60+ billion in toxic loans are mostly covered by the taxpayers. This stinks to high-heaven. its no wonder why BofA is so comfortable closing the CFC deal, which with will cost them at least $40 billion when considering the value of theie toxic assets (loans) vs massive debt. I actually did a post on it, if you are so inclined.

Even more disturbing, in the BofA draft it proposes than Ginnie Mae gives an explicit guaranty on the loans. I wonder if you read the fine print of the Dodd-Shelby Bill if it is in there somewhere but has just has not been publicized?

This just in, found by a TickerForum says that “Senate Housing Bill Requires eBay, Amazon, Google, and all Credit Card companies to Report Transactions to the Government”.

“Washington, DC – Hidden deep in Senator Christopher Dodd’s 630-page Senate housing legislation is a sweeping provision that affects the privacy and operation of nearly all of America’s small businesses. The provision, which was added by the bill’s managers without debate this week, would require the nation’s payment systems to track, aggregate, and report information on nearly every electronic transaction to the federal government.

FreedomWorks Chairman Dick Armey commented: “This is a provision with astonishing reach, and it was slipped into the bill just this week. Not only does it affect nearly every credit card transaction in America, such as Visa, MasterCard, Discover, and American Express, but the bill specifically targets payment systems like eBay’s PayPal, Amazon, and Google Checkout that are used by many small online businesses. The privacy implications for America’s small businesses are breathtaking.”

National Review Online story and link to document below. -Best Mr Mortgage

NRO Doc Drop: BofA-Scripted Bank Bailout Looks Awfully Similar to Dodd-Drafted Housing Bill [Stephen Spruiell]

National Review Onlinehas obtained an internal Bank of America “discussion document” (pdf here) on the subject of the FHA Housing Stabilization and Homeownership Retention Act of 2008, a.k.a. the Dodd-Shelby mortgage-lender bailout bill.

Yesterday, Tim Carney reportedthat the prevailing sentiment on Capitol Hill is that the Dodd-Shelby bill “is exactly what Bank of America and Countrywide wanted.” BofA is in the process of acquiring Countrywide. Countrywide is currently embroiled in a scandal over its V.I.P. program, under which several powerful politicians, including Sen. Chris Dodd, got preferential loan rates.

This discussion document (dated March 11, 2008) would appear to support the contention that BofA essentially wrote the bailout section of the bill. Almost all of BofA’s preferences are mirrored in the Dodd-Shelby legislation. The BofA document even offers PR tips, such as “We believe that any intervention by the federal government will be acceptable only if it is not perceived as a bail-out of the bond market.”

The president has threatened to veto Dodd-Shelby because it would “unfairly benefit lenders who made bad loans.” The Senate will resume debating the bill on Monday.

The BofA doc is worth posting here for a couple of reasons: First, the similarities between BofA’s ideal bill and the bill before the Senate are obvious even to the layperson — read the document, then read David C. John’s analysis of the bailout and see for yourself.

Second, we’d invite our readers with some expertise in this area to look over the document for things we might have missed. Opponents of the bailout are lucky that a few tenacious Republicans (Kit Bond, DeMint et al) were able to hold up the bill and keep it from passing as quickly as expected. The fight resumes next week, so take a look at this document and keep digging.


33 Responses to “BofA, Perhaps Countrywide Wrote Dodd-Shelby Bailout – THIS NEWS MUST GET OUT THERE!”

  1. What amazes me is that you seem surprised… This is our goverment voted stupidly into office over and over again to screw us the very people that elected them. We get what we deserve as a nation until the sheeple wake up and vote each and every incumbant out of office.

    We must take back our goverment and it starts by moving the good old boy network out in one fell swoop and let the newbies know they are next if they don’t get with the program. See how fast they respond to unemployment… fast trust me!!!

    Most will not find 6-figure jobs in the real world and let’s face it… many could not find a decent paying job anywhere because they are so incompetent. They are good at spin, yapping, and doing nothing. Not a good blend in the private sector!!!

  2. Son, You obviously have No idea of how legislation gets drafted.

    What a Country!


  3. What time frame are we talking about here ? when is that bill supposed to be discussed / voted ?

  4. Congress=A bunch of lying scumbag lawyers hell bent on keeping the Washington system as slow moving and full of graft as possible. Try and read some of this legislation. It reads like an option arm note. The more confusing the better.

    We need business people and business minds representing us. The country needs to start being run like a business, starting by not spending more money than it earns.

    This story needs to get huge, so every rank and file working American can become educated on exactly what their elected $169k a year leaders are producing for them.

  5. Let me see if I get this right!
    1. Your new appraised Loan amount is the current mortgage balance less the foreclosure cost, which is approx. 10%.
    2. Then they push your new loan out 4.1 years to see if they can get your new payment adjusted down to approx. 31% less than you are now paying.
    3. Then your new loan has a new soft second to cover the 10% foreclosure write down cost. Which will stay with your loan up to 5 years or you sell your up-side-down home for a profit. (-40%) + (10%) = (-30%) Oh Boy!!!!!
    4. Here’s the best part Cut the Throats of The Second Notes holders and let them get into all the action!
    5. Now you have to pay PMI insurance and all the cost of a new loan and Yes! Yes! All that New Great Servicing cost.

    Yes this is what I though was going on the whole time with this deal, Yes this is a great deal if your are, BOA & CW but for the rest of us please return to the back of the line and give it that good old American try one more time for the next 5 years. Same great Interest Only ARM Rate and that new Loan balance with all those great late fees and missed payments added on.
    Crash & Burn Baby!

  6. […] BofA, Perhaps Countrywide Wrote Dodd-Shelby Bailout – THIS NEWS MUST GET OUT THERE! […]

  7. BobMo – right. This is a fuching disaster. Our politicians are so currupt it is beyond belief. Whatever it takes to make the banks happy.

  8. Imperator Mozilo rules Washington or is it Capo.

    Well it’s the final stage of Empires. Nothing new under the sun. At the end of the Roman Empire, the very rich had all these privileges, while the ordinaty roman, the small entrepreneur or farmer was overburdened with debts and taxes of all sorts.

    The Empire crumbled to smitthers because of excessive taxes on the poor and the middle class and no taxes to the rich. That’s what would be required in the US in 2008 ; another Boston Tea party against your stinking corporate America. Ain’t no socialist, but have no sympathy for the bums and tramps running corporate America.

    Yeah. I wasn’t impressed at all by the little parade Chioppi, the Bear Stearns Trader. Poor guy. He will get all the flack. What about the bums working at Lehman Brothers, Morgan Stanley, Merrill Lynch, Countrywide, JP Morgan, Fannie Mae or Sallie Mae ?

  9. The banks and lenders have bought this country lock stock and barrel… We do not even have a free market society any longer. We have a Fed manipulated market and it is steered to benefit the financial industry. This is the way it has been for years, but nobody ever spoke up because everyone was making money. Watch the finger pointing, that has already started, get really ugly and really fast!!

    The one thing that just continues to amaze me is the sheeple’s inability to understand what is going on here. Are people really that busy that they are willing to just sit and allow this all to happen without a peep? This should all be major league water cooler talk at work, but most of it isn’t even mentioned. You bring it up and people stare like a deer in headlights… amazing! Sure gas prices are but not the reason why… THE FED and their stupid A%$ policies!!!


  10. I’d also hazard a guess that the toss in of tracking all those electronic transactions from CC’s/paypal/amazon/google etc. are to have that info available for tax purposes. National internet sales tax or something similar. That and it’d make investigations easier for law enforcement… who needs a warrant? Gov already has all that data in storage “legally”.

  11. Boy and you think it’s just an American problem. It’s even far bigger than small USA.

    Everybody imitated your geniuses. Far places like Eastern Europe even have these types of bubbles ! It’s not just the USA. They are a lot of USA “Monkey see, monjkey do.” in Canada, Spain!, Greece, Italy, UK !, Australia!, New-Zealand!, France, Ukraine, Croatia, Latvia, Estonia, Lithuania, South America, Asia. Bubbles everywhere not just California. The list goes on and on and on, like the bunny on batteries. Stu in ain’t just the USA. It’s the Wide World and it’s real scary.

    It’s not just the stupid FED also. It’s also the crazies at Bank of Japan with their hysterical Zero interest rates for 10 years and the craked up carry trade !

  12. You should have title the article “Taxpayers to Bail Out Countrywide’; it is more attention grapping =)

  13. I understand totally the extent of the problem, but I could care less about Croatia… My point is that we need to address THIS countries problems! It starts by taking back control of OUR goverment who WE over pay!

    It starts by scaring the HE&% out of those in office and those about to come into office as a result of OUR actions. By voting EVERY single person in office out of office we get instant stand at attention goverment representing US THE PEOPLE. Now lets roll our sleeves up and get to work!

    Second we call on these newbies to disband the Fed and allow FREE MARKETS to run things as it should haven been all along. We would NEVER have gotten this over our heads if this were the case!!!

    Third we must stop these silly a%$ “bail out” proposals immediately and get real. WE don’t have the money!! WE THE PEOPLE ULTIMATELY PAYING FOR THIS DON”T HAVE THE MONEY!!! We are broke as a nation and draconian style cuts need to be made and that list doesn’t have room for “bail out” proposals on it…

  14. Those in office coun’t care a —- about you. THEY DON’T CARE. They absolutely do not care. In the USA, in Japan, in China, in France, in Germany, in Canada. They really don’t care. May they be liberals or conservatives. Cynical you bet ! Consevatives get elected promising small,lean and efficient government. And the first thing you see is stupendous Pentagone spending and orgy of debts, wars and stealing ! So you vote for liberals and nothing changes. Libertarians are right on this. Big government destroy democracy, lead to imperialism and destruction of the economy. Colonial Spain, Napoleon’s Bonaparte regime and the USSR are good examples. The good old USA is next on the list. So unfortunate.

  15. Wow, this stinks to high heaven. While I’m no big fan of George W, this may be the final straw that will give him the courage to veto this turkey of a bill. At least I sure hope so.

  16. Turkey of a bill. Let them sink.

    What is wrong with buying properties at dirt cheap prices ? Let the market do its work. What’s this with these banks ? Market forces and rules don’t apply to them ? Bankruptcy is not just for Joe Blow. It’s for Mozilo and why not for Bank of America, JP Morgan and Morgan Stanley too. I think that the FED and your politicians have been infected by the Japaneese flue. If this is the case, the USA will be in deep depression for at least 15 years like Japan. Zero interest rates for 10 years ?

  17. This scandal is absolutely immense. Here we had a bill that was presented to the public as one that would bailout struggling borrowers. Now, it turns out that in fact two powerful banks bought Dodd’s complicity in a bill that would benefit them as part of an overall bill that would cost the tax payers $300 billion.

    The worst part is that the MSM is complicit in the corruption because they refuse to report on it. I wrote a detailed summary, adding some context and backstory on how all this came about. Here it is…

  18. Unless Mr. Army can get this story out to the MSM and persuade them this is front page news, a few dozen phone calls from constituents are not likely to affect the votes of more than a handful of legislators. But I will do my best.

  19. You guys have to understand that banking is going to have to tell the politicians what to do because they have nary a clue on how to fix this. Unfortunately that leaves a vested interest designing the bailout which will likely be in their favor.

  20. Get your priorities straight, you Right Wing Nut of an idealistic Utopian capitalist. The twisted corrupted Republican Fat Cats need to be busted and buried 6 feet under.

    When will people learn to go after the Republican Party of Business, Owned by Business and Destroyer of Middle America.

    The Republican list is too long and the money laundering is beyond comprehension.

  21. […] BofA, Perhaps Countrywide Wrote Dodd-Shelby Bailout – THIS NEWS MUST… This $300 billion bailout is an absolute crime. It bails out the banks by limiting their loss to 10%; a joke since many of the problem areas… […]

  22. Mr. Mortgage, I cannot find where Dodd is associated with H.R. 5830, which has the title “FHA Housing Stabilization and Homeownership Retention Act of 2008.” According to the CRS summary of this bill at THOMAS, the bill still rests in the House, as item #386 on the Union Calendar (5/5/08), whatever that means.

    The bill that Dodd discussed last week, which is apparently in the process of having its versions between the two houses reconciled, is H.R. 3221. whose short titles in the Senate include “FHA Modernization Act of 2008” and “Foreclosure Prevention Act of 2008.” This bill was passed by the House last summer and read to the Senate 9/4-5/2007. At the time it was an energy bill.

    Transmogrification into a housing bill appears to have occured sometime in early April. The referral of the bill to Senate Banking, Housing, & Finance last week is the first official record of Dodd’s involvment with the bill that I can quickly find, though I’m sure someone with more time for this (and patience) than I have can nail the particulars down exactly.

    Perhaps your sources have some reconciled links? Also, linkage to the full text of the bills would be nice; I’ve looked, and even ran across what I think to be the correct file, but mislaid it, and it is not straightforward to find a lot of this stuff, unfortunately.

    Thank you for your consideration.

  23. Have you heard of the ‘Incredible Shrinking Comments’? Yup, right here on Mr. Mortgage’s website! The Truth simply vanishes as soon as I post it! (actually, there is a very useful delay before the comments disappear!). Can Mr. Mortgage eradicate Truth? Of course not! You can still SEE! it by clicking on my name! What’s ‘in a name’? More than you can digest. 😉

    So why would Mr. Mortgage continue to censor ‘Inconvenient Truth’ here, long after Donny, evil-A and others of their ilk have left for greener pastures? Hmmmmmmmmmmm….?! Could Mr. Mortgage be a Zionist shill, as well??? Think about it!

  24. Ah come Eternal Optimist. Cut it out! We are talking about finances here. Hell everybody is sinking. From Asia, to Saudi Arabia, to the USA, the system is cracking and crashing. I don’t see a relation between the Vietnameese stock market crashing 75% and this. Come on. The only conspiracy here is pure greeed, stupidity, arrogance, ignorance worldwide from politicians and central bankers. And believe me. It’s global. It has nothing to do with one group in particular. Now let’s get back to business and talk sensibly. The only conspiracy is WORLDWIDE GREED and STUPIDITY. As usual.


    You are absolutely RIGHT! I have been sending this article to every mainstream media outlet I can find, because I am so disgusted with what they are again, trying to pull over on responsible taxpayers.

    This is the grossest example I have seen in some time of Corporations using some idiot to push, push, PUSH their agenda, only this time, the cracks are clearly visable. Is Dodd really this stupid that he is willing to take 70K for the complete trashing of every shred of his reputation and credibility?? (Obviously, that isn’t such a problem since we have learned he as NONE).

    Voters should be RIOTING in the streets over this!! We are being robbed blind!!

    Keep getting the mssg. out- I will help however I can!!

  26. MA: You seem to be a shrewd Cookie – Fortune, I think! 😉 Now, about all this being about unadulterated human GREED and nothing more, I beg to differ. Some nasty (Zionist) slimeballs have been playing the GREED card for sure – among many other dirty tricks up their sleeve (like the ‘antiSemitism’ hate card). While we all have our very human frailties, there are some unscrupulous characters (humanoids) who like to prey upon those weaknesses. The Devil has been known to do just that! Don’t think the Devil exists? Sure as Hell he exists!

    I know that you, Mr. Mortgage and some others here just want to discuss ‘high finance’ and lay down a big smokescreen, but Mortgage Messes, Depressions and wars are just means to an End for those nasty Zionist (Satanic) slimeballs! (like Greenspan & Bernanke). The End they have in mind for you, me and millions of others is foreclosure, financial ruin, slavery, suffering and death.
    They think of us Goyim as just a larger group of Palestinians and the rest of the Globe as just a larger Gaza.

    Hitler had his plan for the 3rd Reich and these diabolical Zionists have their plan for ‘Greater Israel’ and the NWO. Read “The Protocols of the Learned Elders of Zion” if you want to know the (gory) details of their Game Plan!

    The VERY last thing these Zionists, their stooges and their shills want humanity to think about is “WHO DID IT” – just like they don’t want anyone to think about “WHO DID 9/11”!

    No matter, MELT, they will!

  27. Oh God, I don’t want to be paranoid but all this (e.g. 9/11, Patriot Act, Economy Destroyed, tracking finances and more) is discussed in William Cooper’s book “Behold of the Pale Horse” do a google and you’d be surprised…

  28. Rabid truthers . . . always good for a laugh.

  29. Hey, Matt – remember that he/she who laughs last, laughs best! 🙂 You may be laughing now – but you sure as Hell won’t be laughing then! 😉 In fact, you’re not likely to be laughing before the end of this year. After that, it’ll be crying all the way to the bank (and back) – to coin a variation on a theme! :O

    The Voice: You don’t have to read no books – you just have to keep your eyes and ears open! – and then check my website now and then to confirm that you’ve heard it all before – long before it happened! 😉

  30. “It bails out the banks by limiting their loss to 10%;”

    Why do you say this? I’ve been a bit annoyed by this bill, but if that’s true, I’ll be PISSED.

  31. I hope everyone is writing to their congressmen,senators and any newspaper that will listen and publish your views.
    This bill can not pass. There are few people to benefit from this and the rest of us will be paying for it. SCHOOLS and other government run services will be cut. And for what? To pay for the mistakes of GREEDY people.
    The ones who gave loans when they shouldn’t have just to get the commission. The ones who bought homes to make money with no intention of actually paying that price. By both parties doing just that they drove the home prices up. Now that neither can play the money game anymore they want our help to bail them out. NO. You must pay for your own mistakes. I shouldn’t have to. I want a home too, but I have been forced to pay high rent because I wasn’t willing to pay for a home that I new I could not afford or there was a chance for me to lose. Why should anyone have to pay the debt of the greedy. And why should programs suffer because tax dollars will do just that if this bill passes. DON’T LET YOUR HARD EARNED TAX DOLLARS GO TO THE PEOPLE THAT CREATED THIS PROBLEM IN THE FIRST PLACE. Yes some companies will go under… and they should. The ones losing there house…they didn’t put any money down anyway so they can just go back to renting.
    And try to get your car loan adjusted after you drive it off the lot, because the value has gone down. It doesn’t work like that. You signed a contract to pay and you should. It is not like an ER visit and you have a bill you never wanted to create, but just happened. You went to the bank !!!!! They didn’t come to you. I have no compassion for Banks either. They are in the business to make money. And that is there only concern. It’s not me or the rest of the public. So take responsibility for your own mistakes and stop asking for others to pay.

  32. One more thing. If you don’t do the bailout and let this cycle take its natural course. The end result will be :
    yes, some will lose there jobs, some businesses will go under, but most importantly… there will be more affordable housing. The prices will come down. And people should be saving for a home. Not just be able to one day go out and get one without any money down. You want to get a house easy…….. win the lotto. You should have known that if it seems too good to be true. It is.

  33. Load up. You going to need it. The storm has just begun.

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>