New Bank Of America Loan Could Further Push Black And Latino Families Out Of Communities
ForbesNov 25, 2022
Bank of America to Pay $1.8B to Ambac in Mortgage Crisis Settlement
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Image copyright: Shutterstock [via Top Class Actions]
The Facts
Bringing an end to the last of the North Carolina-based mortgage lender's lawsuits involving the 2008 financial crisis, Bank of America (BoA) on Friday agreed to pay bond insurer Ambac Financial Group $1.84B.
The agreement "resolve[s] all pending Ambac lawsuits" stemming from a dispute over the mortgage-backed securities company Countrywide, which BoA bought in 2008 and was accused of misrepresenting the quality of its loans ahead of the crisis.
The Spin
Establishment-critical narrative
BoA knew exactly what it was doing when it defrauded bond insurers over a decade ago. When the crisis came, and smaller companies like Ambac saw what had happened, BoA decided to bully them through the courts rather than pay for their wrongdoing. Thankfully, the little guy won this time, and Goliath has to pay David what he's owed.
Pro-establishment narrative
To claim Ambac was some small, vulnerable company up against a financial titan is absurd, as it was the second-largest bond insurer in the world at its peak. While everyone likes to pick on BoA in light of the 2008 crisis, the truth is that Ambac accepted the risks of insuring those mortgage-backed securities to profit millions in premiums.
