Mergers Abound in Mortgage Crisis
Well, it was just recently announced that two big mergers happened in the world of mortgage financing, and one mortgage giant bought out another one the most recently, meaning Bank of America bought out it’s former rival Countrywide Financial for a whopping 4 billion dollars in stock. Another good candidate for a buyout right now according to analysts who know more about this stuff than I’d ever care to, are Washington Mutual, which has been battered by subprime mortgage loans, and also Bear Stearns who says right now they are not looking to merge with anyone.
Two other mortgage lenders and bankers that are being speculated on as possible merge partners are National City and Key Corp (where I actually do my banking, and I actually had a car loan with National City for a long time). There has been lots of talk of these mergers because it’s kind of an effort to make the banking industry a bit more solid and united and “unbreakable” by large aquisitions since now more and more cities are also expected to go after bank litigation since their cities have been battered by the subprime crisis.
Take for example Wells Fargo, who is being sued now by Baltimore, who says that they have evidence that according to maps and other demographics, their subprime division specifically went after minorities (predatory lending) and also tacked on numerous fees and high interest. The company says that they have done no wrong, and that those terms apply for any subprime mortgage lender.
The amount of foreclosures has been outrageous in many major cities, including Cleveland, which is by where I live. I know people who have personally been touched by a foreclosure, and it really takes a toll on their credit and on their spirit, so I can understand why people are upset about these practices, however, I’d have to see more proof that company blatantly took advantage of certain poor areas before I could say much!
