test

952 Words2 Pages
bulb-icon

Recommended: lessons learned from corporate scandals

Bank of America (BofA), a trustee of Countrywide Financial, uncovered some suspicious evidence after it hired an underwriting consultant to review some nonperforming loans. The consultant looked at a small sample, 786 loans out of 4,484 mortgages, and found that two-thirds of the loan sample contained one or more breaches of representations and warranties. About 90% of those breaches involved fraud or violations of Countrywide's underwriting guidelines. Countrywide deals were originally worth $424 billion and are now expected to lose about $100 billion. Bank of America calculates the average Countrywide defect rate to be 36%. If investors failed to accept BofA's $8.5 billion take-it-or-leave-it offer, the bank would put its Countrywide subsidiary into Chapter 11. Poor record-keeping by all parties provides barriers to pursuing and winning litigation. David Federer (2013) made the statement that once the state passed a law making parties criminally liable for committing fraud as part of a foreclosure process, home foreclosures came to a virtual standstill.

Relief is on the way if you owe more on your home loan than it is worth with Bank of America (BofA). BofA plans to give about $3 billion through the National Homeowners Retention Program in loan forgiveness to homeowners who need help. This program helps borrowers to keep their homes. This enhancement is in response to a court settlement concerning Countrywide Financial. BofA took on many of Countrywide’s subprime mortgage changes after it acquired the company. BofA will provide up to 30% forgiveness to 60 days late homeowners who owe more than 120% of their home’s value. The bank wants homeowners to take advantage of modifications to help them keep their homes and ...

... middle of paper ...

...pper-level managers to not report their fraudulent ways. Whistleblowers, like Eileen, were being harassed, transferred, or terminated by the deceiving managers. Loan fraud, drug abuse, and sexual harassment were revealed after investigations were completed. I think that Ms. Foster should be reinstatement at Bank of America/Countrywide because she did nothing wrong. She exposed those that needed to be exposed and cleared her name in the process. Dylan Blaylock (2011, December 7) made the statement that instead of accepting a payment of almost $228,000 for her silence, Foster wanted to ensure the corrupt practices at Countrywide were exposed and that the wrongdoers were held accountable. Foster filed a Sarbanes-Oxley Act whistleblower complaint with OSHA challenging the legality of her firing. The Department of Labor ordered her reinstatement and $930,000 in damages.

Show More
Related

  • Talia's Letter Summary

    1029 Words  | 3 Pages

    through a public way online, which seemed very unprofessional. I think the outcome of her getting fired

    Read More

  • Pros and Cons of Criminal Charges on JP Morgan

    1342 Words  | 3 Pages

    After the time of financial crisis, JP Morgan was not the only national bank in US which got involved in trade of toxic loans related to mortgage. Before JP Morgan, it was Goldman Sachs-another large US Bank that faced the allegation of manipulating the trades in its own self interes, ended up in favor of SEC while GoldMan Sachs were asked to pay $500 Million during late 2011 in a deal called Abascus 2007-AC1 where the bank were alleged to mislead its investors on a deal related to Collateral Debt Obligation(CDO). (Eaglesham, 2011) The ab...

    Read More

  • Meritor Savings Bank V. Vinson

    710 Words  | 2 Pages

    In this case, Taylor who was the Vice President of Meritor Bank hired Vinson as a teller for Meritor Savings Bank. For Taylor, there was an instant attraction to Vinson and he pursued her sexually. Vinson started meeting Taylor outside of work and the relationship grew to be of the sexual nature. Taylor, being her boss, started showing possessive displays of affection within the work place in front of job candidates and current employees. Taylor then suggested that Vinson apply for a higher-ranking job he supervised. Vinson deliberated on it, decided to interview, and was then promoted. Taylor and Vinson had many sexual encounters, 40-50 times, during the course of her employment with the bank. Taylor started getting more aggressive with his impromptu barrage of sexual encounters in places like the women's bathroom. When Vinson notified Taylor that she had developed and was embarking on a relationship with another male, Tay...

    Read More

  • Similarities Between the Great Depression and the Great Recession

    974 Words  | 2 Pages

    Leading up to the crisis of the housing market, borrowers got mortgages without understanding the terms. Banks were giving out loans to people the banks weren't sure could pay the money back. The closer to the crisis, the higher the frequency of illegitimate loans and mortgages. Because there were so many mortgages on houses that could not be paid back, millions of mortgages were foreclosed on, and the houses we...

    Read More

  • The Dodd-Frank Wall Street Reform and Consumer Protection Act

    1575 Words  | 4 Pages

    The Dodd-Frank Wall Street Reform and Consumer Protection Act’s policies haven’t really been implemented to the extent that regulators would have liked. Although the legislation takes many steps in addressing systematic risks in the United States financial system and improving coordination among regulators, some critics believe that alternative options might have been more effective. The coming years will give us a better understanding of how well the Dodd-Frank Act addressed these concerns.

    Read More

  • The Catbird Seat Setting

    691 Words  | 2 Pages

    If someone had confronted her would that have made a difference? It seems that employees of F&S made their minds up about the newly appointed special advisor to Mr. Fitweiler and did not give her a fair

    Read More

  • The Sub-Prime Mortgage Crisis of 2008

    934 Words  | 2 Pages

    The Sub-Prime Mortgage Crisis of 2008 has been the largest financial crisis to take place since the end of the Great Depression. It was the actions of individuals and companies that caused this crisis. For although it could have been adverted, too much money was being made by too many people in place of authority to think deeply on the situation. As such, by the time actions were taken to attempt to rectify the situation, it was already too late. Trillions of dollar of tax payers’ money was spent trying to repair the situation that was caused by the breakdown of ethics and accountability in the private sector. And despite the government’s actions to attempt to contain the crisis, hundreds of thousands lives were negatively affected before, during, and after this crisis.

    Read More

  • Test

    675 Words  | 2 Pages

    Making a good and persuasive argument is very much an acquired skill. It requires much practice and perfecting. It takes more than just having passion and making good points. Just because a person is passionate about the topic or has supporting details does not mean they can make a successful argument. Much more thought and skill is required. Gordon Adams, in his letter to the Arizona State University standards committee, demonstrates this quite well. Gordon Adams writes a passionate argument, yet his argument lacks several critical aspects.

    Read More

  • Scandal Wells Fargo Scandal

    980 Words  | 2 Pages

    First of all, they will not be able to buy tangible properties such as house, car and etc. because of that their credit ratings got a huge hit. Moreover, only 5,300 of the employees that were fired from the Bank, 10% were Managers. What could have motivated them to engage in this sham? This is not an attempt to imply all were of malicious but certainly most them led the way. The aggressive sales goals pushed employees to break the rules. “On average one percent 1 percent of employees have not done the right thing, and we terminated them. I don’t want them here if they don’t represent the culture of the company,” says John Stumpf, the company’s longtime chief executive, in an interview with The Washington Post. It is obvious that simple employees and managers could not break the law if someone from the top did not allow them to do so. But the executive board of Wells Fargo claimed that they only fired 1 percent of below employees and some managers for fraudulent accounts, however they also might be involved in that business crime although to build a case against a company executive, prosecutors would have to show “they knew there was a plan to create false accounts to drive up sales,” said Brandon L. Garret, a professor at the University of Virginia School of Law. Even if it appears that the executive purposefully attempted to avoid knowing about the fraud, prosecutors may be able to build a case. Because they don’t have to participate if there is willful

    Read More

  • Worldcom Case Study

    1575 Words  | 4 Pages

    Although many of her actions were parallel with fellow manager in General Accounting Troy Nordmand’s, he did not receive a prison sentence due to the fact that he attempted to leave the company (although Vinson did initially plan to resign). Conversely, Vinson was sentenced to five months in prison and five months of home detention. One particularly interesting aspect of Betty Vinson’s case is the inclusion of her concerns over taking home pay and having health insurance, in addition to the fact that she had a positive reputation and was known for doing “anything you told her”. While it is normal to have concerns over job security, the emotional appeals in her situation add a different side to the story. One could argue that she is a victim -- she could have been targeted due to her reputation, or that fear drove her to do things she otherwise would not have considered. The issue here, however, is that she facilitated the fulfillment of Sullivan’s requests and pleaded guilty to one count of securities fraud and one count of conspiracy to commit securities fraud. As far as the case specifies, despite any superior’s knowledge of Vinson’s tendencies, she was not absolutely forced to do or not do anything. Because she committed the crime and pleaded accordingly, the criminal charges and consequent sentencing was both expected and

    Read More

  • Hostile Work Environment: Closed-door Meetings Violate Company Policy

    879 Words  | 2 Pages

    Facts of the case: Anna’s immediate supervisor, Michael, repeatedly required that she have “closed door” meetings with him. Closed-door meetings violate company policy. Other employees were aware of these closed-door meetings and, as a result, rumors began to spread that Anna and Michael were having an office romance. In fact, in these closed-door meetings Michael tried to convince Anna to lend him money, a practice that also violates company policy. Anna repeatedly denied the request and Michael stopped asking. However, the rumors continued and affected Anna deeply. She was treated like an outcast by her co-workers. Anna asked Michael to clear up the rumors, but he found them amusing. Anna had two evaluations where she scored low points for “integrity” and “interpersonal relations” as a consequence of the rumors. She was passed over for two promotions for which she applied where her skills and experience were superior to the employees who were promoted. She filed an action against her employer on the ground that her supervisor had created a hostile work environment because he refused to stop the rumors.

    Read More

  • Film Analysis Of The Untouchables

    878 Words  | 2 Pages

    Countrywide’s business tactic was “Fund ‘em”. If a person does not have a job, or any assets the answer was still “Fund ‘em”. This is a practice called subprime lending which allows loan...

    Read More

  • Too Big To Fail

    893 Words  | 2 Pages

    In previous years the big financial institutions that are “too big to fail” have come to realize that they can “cheat” the system and make big money on it by making poor decisions and knowing that they will be bailed out without having any responsibly for their actions. And when they do it they also escape jail time for such action because of the fear that if a criminal case was filed against any one of the so called “too big to fail” financial institutions it...

    Read More

  • Bank Of America Case Analysis

    1331 Words  | 3 Pages

    The 2008 crash in the U.S. Housing market associated with subprime mortgage and Merry Lynch losses, Bank of America accepted a $20 billion government bailout with the intention of stabilizing the financial marjets (Gupta & Herman, 2012). Band of America later repaid that amount with interests. In 2010, according to Forbes, Bank of America was the world’s third largest company after JP Morgan Chase and General Electric. In 201, however, Bank of America began conducting personnel reductions of an estimated 36,000 people, contributing to intended savings of $5 billion per year by 2014 (Bank of America Ending 30K more jobs, 2011). As for ownership, Bank of America is a publicly traded company listed under BAC in the New York Stock Exchange (NYSE)

    Read More

  • Greediness of Mortgage Lenders

    666 Words  | 2 Pages

    Countrywide Financial got greedy and started to make questionable and unethical decisions to make money. Countrywide Financial preyed on consumers that could not qualify for conventional loans and those that could to make more money with subprime loans. Countrywide was found guilty of mortgage fraud. The U.S. government is seeking to have Bank of America Corp. pay nearly $864 million in damages after the company was found liable for mortgage fraud (Subramanian, 2013).

    Read More

More about test

Open Document