NEW YORK (TheStreet) -- Shares of Bank of America Corp. (BAC) are down 0.81% to $17.18 after CEO Brian Moynihan said the will avoid easing mortgage standards even as regulators seek to expand lending, according to Bloomberg.
"You won't see us start to expand our criteria much past what we've done today," Moynihan said at a New York investor conference sponsored by Bank of America, Bloomberg reports.
"I don't think there's a big incentive for us to start to try to create more mortgage availability where the customers are susceptible to default," Moynihan said, adding that a customer without the means to make a down payment of at least 10% should consider renting rather than trying to buy a home.
Why is BOA not making loans? Because the FHFA will make them buy them back if the borrower defaults. It was different before when BOA sent loans to fannie in 2007, they did not care if the loan went bad. Fannie would be stuck with it or PLS (bear stearns) but in todays world BOA would have to take back its crap loan and would be stuck with the loss. WHY? THE FHFA who stole fannie mae from private investors will have the DOJ sue the bank for the loss if they dont take it back. This is why Private money will never enter housing. FHFA and Banks will not be on same page. FHFA wants to not be taken to cleaners by banks, and banks want to not be taken to cleaners by FHFA.
Its like two mob gangs talking to each other. Both ready for the shoot out at any time.
Fannie needs to be released so the FHFA will quit suing banks, Banks will deal with private fannie mae, not with conservatorship FHFA!! FHFA is not the banks friend. BOA makes it clear.