BofA (shorthand for Bank of America - NYSE: BAC) got another round of bailout money from not only the Treasury, but also from the Fed and the FDIC as well. BofA has already recieved one of largest dole outs of the first round of TARP funds along with the other eight Paulson hand-picked mega-banks when the initial bailout was approved and funded by Congress a few short months ago.

BofA = One of Biggest Bailout Recipients

In the wake of the Senate passing the release the second half of TARP funds (an estimated $350 billion) last night after posturing earlier in the week they might not, BofA gets this “combo” meg-bailout package worth about $20 billion.

I don’t know if this means the country can’t live without BofA or if it just means politicians can’t.

I can guess…and so can you on that one.

Here’s the FDIC press release on the BofA bailout of late…so you can read the details,

Treasury, Federal Reserve and the FDIC Provide Assistance to Bank of America

FOR IMMEDIATE RELEASE
January 16, 2009 Media Contact:
Andrew Gray (202) 898-7192

Washington, DC - The U.S. government entered into an agreement today with Bank of America to provide a package of guarantees, liquidity access and capital as part of its commitment to support financial market stability.

Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $118 billion of loans, securities backed by residential and commercial real estate loans, and other such assets, all of which have been marked to current market value. The large majority of these assets were assumed by Bank of America as a result of its acquisition of Merrill Lynch. The assets will remain on Bank of America’s balance sheet. As a fee for this arrangement, Bank of America will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In addition, Treasury will invest $20 billion in Bank of America from the Troubled Assets Relief Program in exchange for preferred stock with an 8 percent dividend to the Treasury. Bank of America will comply with enhanced executive compensation restrictions and implement a mortgage loan modification program.

Treasury exercised this funding authority under the Emergency Economic Stabilization Act’s Troubled Asset Relief Program (TARP). The investment was made under the Targeted Investment Program. The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security.

Separately, the FDIC board announced that it will soon propose rule changes to its Temporary Liquidity Guarantee Program to extend the maturity of the guarantee from three to up to 10 years where the debt is supported by collateral and the issuance supports new consumer lending.

With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy. As was stated in November when the first transaction under the Targeted Investment Program was announced, the U.S. government will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks.

BofA supposedly must “implement a mortgage modification program” but those have come underfire as of late and BofA, to their credit was attempting to do just that when an investor lawsuit stopped them. Read my post, “Is the new Bank of America-Countrywide loan modification program real?” for more.

As I have said many times before, there is simply no evidence any of the banks, including BofA, will start lending again regardless of how much “bailout” money they get. Or the bigger question no one ever seems courageous enough to ask…

“Even if the banks were willing, are there any borrowers, other than the clearly unqualified, asking for home loans or any other kind of loan for that matter?”

Only time will tell…and after the recent employment numbers more and more of us will have plenty of time to ponder it.

Good Luck!

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