House committee subpoenas Federal Reserve

http://rawstory.com/blog/2009/06/house-committee-subpeonas-federal-reserve/

The congressional panel investigating what happened to all that bank bailout money has issued a subpoena to the Federal Reserve, asking them to hand over all documents relating to the takeover of Merrill Lynch by the Bank of America.

On January 1, BofA finalized its purchase of Merrill Lynch for just over $29.1 billion. That made the bank eligible for an additional $20 billion in federal rescue money, bringing BofA's total to some $45 billion. Now, Reps. Dennis Kucinich (D-OH) and Edolphus Towns (D-NY) want to know exactly what the banks and the Federal Reserve agreed to when they arranged the deal last year.

(snip)

New York Attorney-General Andrew Cuomo has claimed that, in 2008, then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke strong-armed BofA into buying Merrill -- a move that, if true, could expose Paulson and Bernanke to prosecution.

Last week, news services reported that the House had asked Bank of America CEO Kenneth Lewis to testify before the House Committee on Oversight and Government Reform. That hearing takes place on Thursday (June 11).

(end snip)

:popcorn:

How many of these loans were insured?

The basics of private mortgage insurance (PMI)
By Bankrate.com
If your down payment on a home is less than 20 percent of the appraised value or sale price, you must obtain private mortgage insurance, known as PMI, with your lender. This will enable you to obtain a mortgage with a lower down payment because your lender is now protected against any default on the loan

http://www.bankrate.com/brm/news/mtg/20010601b.asp



So, a bank is in trouble because of their sub-prime dealings... a mortgage defaults, and a PMI is paid the bank... and they get more from us? Isn't this one of the big problems for AIG? That they paid out too much on the PMI side?

I smell a big, stinking, dirty, slimy rat.