BOFI - The latest exposure article!

Investment Analysis Clubs Saul’s Investing Discussions
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Here’s today’s latest exposure. To me this hasn’t been anything like a normal short attack, which are usually scare people, drop the price, and close your short. This has been one documented shady deal being exposed after another, each one skating at the edge of illegality. I don’t know if they are actually illegal or not, but if you can read this one, and the last two or three exposure articles, and stay in BOFI, you have lots more courage than I have. Lots and lots more. There are other stocks out there to invest in. This isn’t the BOFI we signed up for.
Saul

http://seekingalpha.com/article/3699616-bofi-risky-loans-to-…

BofI: Risky Loans To Undisclosed, Off-Balance Sheet SPEs Found Disguised Within Mortgage Warehouse Portfolio

Summary

BOFI’s large mortgage warehouse business is widely believed to be extremely safe. Footnotes, however, reveal that $297 Million of far riskier lender-finance loans are disguised as belonging to this category.

The article examines BOFI’s undisclosed relationship with Center Street Lending which specializes in highly suspect, single family “fix and flip” loans requiring “no doc”, “no FICO”, and “no income verification”.

The apparently unlicensed Center Street was recently accused of “Enabling And Assisting” the perpetuation of a ponzi-scheme that was shut down by the SEC earlier this year.

Documents confirm that BOFI is funding Center Street via another undisclosed, off-balance sheet, special purpose entity that is also the subject of a recent lawsuit.

BOFI’s sponsorship of Center Street appears to contradict management’s public statements and introduces enormous potential risks…

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… and stay in BOFI, you have lots more courage than I have. Lots and lots more. There are other stocks out there to invest in. This isn’t the BOFI we signed up for.

I thought you said something very close to that not too long before you bought BOFI back.

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This same author has published a previous BOFI bear article in SA . So it may well be an orchestrated short attack. Or maybe not.

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As you know, BOFI used to be one of my big three positions, with at times more than 15% of my portfolio. As I made clear, after I sold out, I never bought back more than a tiny keep-it-on-my-board position, so talking about “before you bought BOFI back” is kind of disingenuous.

Saul

PS My dictionary defines “disingenuous” as:

not candid or sincere, typically by pretending that one knows less about something than one really does.

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And by the way, I wrote that first post in this thread because I was worried about any of my board members still being in BOFI. Sorry if it offended you, but this is not an ordinary short attack on some innocent pure-as-driven-snow virgin company. This is a steady stream of EXPOSURES, not ACCUSATIONS. At least that’s the way it seems to me.

Saul

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you said you had 4.1% position.

that’s a tiny, keep it on the board position?

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Thanks for sharing Saul.

My brother in law was considering BOFI. I will share this article with him as well.

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off-balance sheet

Sounds like Enron?