Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Nye Lavalle
Bank of America to Invest
$2 Billion in Countrywide
By VALERIE BAUERLEIN
August 22, 2007 5:47 p.m.
Bank of America Corp. is making a $2 billion equity investment in Countrywide Financial Corp., the embattled mortgage giant, according to people familiar with the situation.

Bank of America will purchase $2 billion worth of preferred Countrywide stock yielding 7.25%, and that can be converted into common stock at $18 a share, those people said.
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Nye, you mean another 2 Billion, on top of the 11.5 they got last week?, and the reduced insterst rate of .05 %, along with the FED not charging a penality for going over their reserves borrowing?  WOW
 
I guess they maybe in in serious trouble, if its 13.5 Billion in ten days!
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I did not look at that right Nye, it said they can convert at $18 a share? and still get the interest? mmmmm
 
The stock is at $22, so if it drops they can covert to the interest rate of more than 7%, or does this seem like a "Short Sell" here?  I dont know anyone with some ideas?
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Moose
There are differences between "preferred" and "common" stock. We'd have to look at the SEC registration of the various classes of traded shares to see specifically.

As an example, and without looking at those, I would venture the preferred stock has a guaranteed yield of some percentage. In other words, if there is a market for those shares, the price may go up and down but there will always be a yield (dividend).  The owner of those shares has an option to convert those preferred (guaranteed dividend paying) shares to "common" (no guaranteed dividend) at some point if they think there might be a good financial reason, i.e., improved price performance of the common shares making trading them more profitable than the dividend.

Hope that helps.

Moose



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