Oh, How I Wish Bank of America Had Done Some Due Diligence

before they bought Countrywide.

Backdrop:  Back in 2007 when the markets were frothy, I decided that when it was time to invest my bonus I would buy some nice safe bank shares for the dividends.  Sure there might be some volatility, but how bad could it be.  Thinking there were more risks on the International front for reasons that I cannot remember, I bought a little of JPM and C but mostly I bought BAC because they were not that big in mortgages.

Then along comes 2008 and the next thing I know, BAC has bought Countrywide, which was a relief professionally because my bank analyst did not have the foresight to get us out of Countrywide (or anybody else for that matter, may she RIP unfortunately).

Now 3 years later, most of BAC's problems can be traced back to that purchase of Countrywide.  You all know about the RMBS lawsuits, but the reason I write this today is the news that Countrywide was pushing "qualified for prime status minorities" unnecessarily into subprime loans.  Now while I realize these people should have done some homework to protect themselves, it was sleezy behavior on the part of Countrywide.  Not to mention all the other sleezy things Countrywide and the others were doing originating liar loans and any number of varieties on that which have turned out poorly.

Sadly, I as a shareholder with a full time job did not have the time to do my due diligence on what any of the banks were doing, but I would have assumed that BAC would know what Countrywide was doing in general and figured out in due diligence what they were doing specifically and walked away from this mess to protect their shareholders.  Oh wait, I have a dim memory they tried to but the Bush Administration made them go forward.  Thank you Hank Paulsen!

It is now clear that BAC did no due diligence and we shareholders have suffered mightily.  That is how capitalism works so I am only kavetching (sometimes it is hard to know how to spell a Yiddish word) and expressing remorse that the management team "I hired" did not do their job better.

Of course, they walked off with huge paydays upon their exit because the Boards take care of their own and that is why I am at least sympathetic with the Occupy Wall Street crowd.  Even if I am perhaps a target of theirs.