Mind you, ‘Puter’s impression of U.S. Attorney Preet S. Bharara’s action against Bank of America is based entirely on Mr. Bharara’s press release, which you may review here.

Here’s a very brief synopsis of the government’s claims. For a more full understanding, read the linked press release.  Better yet, read the actual complaint when it becomes available.

The Obama Administration claims Bank of America knowingly sold fraudulent loans and noncompliant loans to Fannie Mae and Freddie Mac. Bank of America’s high volume loan origination pipeline process and procedures were stripped of safeguards to sort out fraudulent and noncompliant loans in favor of quickly issuing debt.  Bank of America did not tell Fannie Mae and Freddie Mac it had stripped out procedural safeguards, nor that loans Bank of America sold Fannie Mae and Freddie Mac were noncompliant, fraudulent or both. Fannie Mae and Freddie Mac suffered damages when forced to make good on guarantees to investors in mortgage backed securities the entities issued that were comprised of Bank of America originated loans. American taxpayers were damaged when Congress bailed out Fannie Mae and Freddie Mac, which entities were left insolvent when investors called for the entities to honor their guarantees.

‘Puter has some thoughts on this action, as he is more than passingly familiar with the business of purchasing commercial debt from lending institutions in the secondary market.  Many of his business acquaintances started in consumer debt backed bond markets on Wall Street, and ‘Puter’s picked up some war stories from them on precisely this issue.

Here are ‘Puter’s thoughts on the President Obama’s Shiny Object Pre-Election Distract-o-Matic Lawsuit:

1.  Mr. Bharara’s suit is purely political, calculated in timing and substance to give Mr. Obama a much needed bump going into Election Day. Duh.

2.  Mr. Bharara’s action likely has a colorable claim pursuant to law, as ‘Puter’s certain a gentleman politically savvy enough to make it to the post of United States Attorney for the Southern District of New York isn’t going get his tit caught in the wringer for anyone, not even The One.

3.  Mr. Bharara’s action is bullshit to the nth degree. Everyone in the market at the time except the investors knew the loans bundled, securitized and sold to investors (and Fannie Mae and Freddie Mac) contained tons and tons of loans that were bad when made.

4.  Fannie Mae and Freddie Mac were complicit in the fraud and violations of law of which Mr. Bharara complains.

4a.  Individuals at Fannie Mae and Freddie Mac knew, and if they didn’t know it was due to wilful disregard of reality, that the loans purchased were bad at the time.  Hell, the industry referred to many of the low-doc and no-doc loans as “liar loans.”

4b. Fannie Mae and Freddie Mac issued guidelines that not only permitted but encouraged banks to make bad loans and sell the loans to them.  Buying, securitizing and selling mortgage backed securities is how Fannie Mae and Freddie Mac made most of their money.  It’s still how they make their money.  Without tons of new debt to securitize, Fannie Mae and Freddie Mac are nothing more than boring old government agencies.

4c. Fannie Mae and Freddie Mac’s management depended on tons of newly originated loans for their livelihoods.  Many former executives had generous stock options and bond return based performance pay packages.  These executives were incentivized to look the other way, and they got rich doing just that.

5. If Bank of America and its merged acquisition Countrywide were making bad mortgage loans from at a minimum 2007 onward, as alleged, where in the holy Hell were the government regulators? ‘Puter understands that government employees enjoy official immunity in performance of their duties in all but the most egregious cases, but Jeebus H. Tapdancing Christ on a Bicycle, our regulators couldn’t figure out over several years that Bank of America originated, allegedly, over $1 billion in bad and/or fraudulent loans?  If regulators can’t spot a $1 billion fraud, why the heck even have them?

6. The only blameless party in the entire mess is the party that bore the cost of making good on Fannie Mae and Freddie Mac’s guarantees.  If you go over to the closest mirror, stand in front of it and point, that person you’re pointing at is the sucker left holding the bag.

Here’s some free advice for whatever poor law firm gets stuck representing Bank of America. 

1.  Go big, and go big now.  Have press conferences where you state how much you are looking forward to finally having the opportunity to tell your story in court. State that you will seek contribution for any damages from employees and managers at Fannie Mae and Freddie Mac.

2.  Bring a third party claim against Fannie Mae and Freddie Mac, claiming they were complicit in the alleged fraud and violations of law. As such, they are necessary and indispensable parties.

3.  Subpoena everyone even remotely associated with Fannie Mae and Freddie Mac during the time frame in question.  Make their depositions public, and insist when the government moves for a confidentiality order that the public has a right to know what its government employees are up to. ‘Puter’d start with Jamie Gorelick and work down the chain from there, but where you start is not as important as the naming and shaming.

4.  Subpoena former Sen. Kent Conrad, a recipient of a “Friends of Angelo” loan. Hire in-house counsel from the Washington Post as co-counsel to conduct the depositions.  Publish the results.

5. Pound Congress for passing laws that almost required Bank of America to engage in risky behavior in order to meet arbitrary targets for minority home ownership, as well as for low LTV at origination requirements.  FHA guaranteed loans still only require a three percent down payment.  If the loan is legal to make, why is Bank of America in trouble for making them?

6. State again and again and again and again that it’s impossible to defraud an entity that is in on the fraud, if in fact any fraud occurred, which you will not admit. If there was fraud, Fannie Mae knew.  Freddie Mac knew.  Congress knew.  Wall Street knew. Only small investors and taxpayers didn’t know.  Every entity in court, whether plaintiff or defendant, knew damned well that the system was broken, and yet everyone agreed to look the other way.

Mr. Bharara, at best for you, this is a run of the mill breach of contract action.  Keeping in mind that your client had full knowledge at all times, ‘Puter’d toss you out on your ear with a stern lecture, were he the sitting judge.

‘Puter’s no fan of Bank of America, and Bank of America was at a minimum complicit in the shenanigans directly leading to The Great Not-Obama’s-Fault Financial Crisis of 2008, but if we’re going to have a show trial, let’s at least get all the villains in the dock, not just the politically expedient ones.

'Puter

Always right, unless he isn’t, the infallible Ghettoputer F. X. Gormogons claims to be an in-law of the Volgi, although no one really believes this.

’Puter carefully follows economic and financial trends, legal affairs, and serves as the Gormogons’ financial and legal advisor. He successfully defended us against a lawsuit from a liquor distributor worth hundreds of thousands of dollars in unpaid deliveries of bootleg shandies.

The Geep has an IQ so high it is untestable and attempts to measure it have resulted in dangerously unstable results as well as injuries to researchers. Coincidentally, he publishes intelligence tests as a side gig.

His sarcasm is so highly developed it borders on the psychic, and he is often able to insult a person even before meeting them. ’Puter enjoys hunting small game with 000 slugs and punt guns, correcting homilies in real time at Mass, and undermining unions. ’Puter likes to wear a hockey mask and carry an axe into public campgrounds, where he bursts into people’s tents and screams. As you might expect, he has been shot several times but remains completely undeterred.

He assures us that his obsessive fawning over news stories involving women teachers sleeping with young students is not Freudian in any way, although he admits something similar once happened to him. Uniquely, ’Puter is unable to speak, read, or write Russian, but he is able to sing it fluently.

Geep joined the order in the mid-1980s. He arrived at the Castle door with dozens of steamer trunks and an inarticulate hissing creature of astonishingly low intelligence he calls “Sleestak.” Ghettoputer appears to make his wishes known to Sleestak, although no one is sure whether this is the result of complex sign language, expert body posture reading, or simply beating Sleestak with a rubber mallet.

‘Puter suggests the Czar suck it.