:( Banks might not have gotten a Get Out Of Jail Free Card afterall :)

It looks like the first major salvo has been fired in potentially forcing the banks to accept liability in the Residential Mortgage Backed Securities (RMBS) fiasco that cause devastating harm to the US economy recently.

The New York Fed, BlackRock, and Pacific Investment Management Company sent letters to Bank of America alleging that its subsidiary, Countrywide, failed to perperly service loans totaling $47 billion.

While the letter itself doesn’t constitute any litigation, it does lay the groundwork for investors filing to recover investments that may have been negligently (mis)handled by banks.

This is a direct result of the “robo-signing” mess that banks have gotten themselves into; since it would be fairly easily established that the banks did not perform due diligence on loans where the documents were not properly reviewed.

I suspect this time it won’t be quite as easy for the banks to pull a rabbit out of the hat by getting the Federal government to provide them with loans — but then again, if you and I don’t make it clear to our elected officials that we’re not interested in another loan to banks, that we expect them to resolve it just like regular Americans have during this economic crisis that banks are largely responsible for.

Originally posted 2010-10-26 02:00:55.