Ritholtz: Why foreclosure fraud is so dangerous to property rights

[Winehole23]

Bank of America Corp said it will pay $3.6 billion to Fannie Mae to settle claims related to residential mortgage loans for the nine years to the end of 2008.

The bank also entered into agreements with Nationstar Mortgage Holdings LLC and Walter Investment Management Corp to sell about $306 billion of residential mortgage servicing rights.
The rights allow banks to earn fees from mortgage investors in exchange for collecting home loan payments from borrowers.


As part of the settlement with Fannie Mae, the bank will repurchase $6.75 billion of residential mortgage loans sold to the government agency.

http://www.reuters.com/article/2013/01/07/us-bofa-msrs-sale-idUSBRE9060D220130107

[Winehole23]

Surprise, Surprise: The Banks Win By GRETCHEN MORGENSON (http://topics.nytimes.com/top/reference/timestopics/people/m/gretchen_morgenson/index.html) Published: January 5, 2013 IF you were hoping that things might be different in 2013 — you know, that bankers would be held responsible for bad behavior or that the government might actually assist troubled homeowners — you can forget it. A settlement reportedly in the works with big banks will soon end a review into foreclosure (http://topics.nytimes.com/top/reference/timestopics/subjects/f/foreclosures/index.html?inline=nyt-classifier) abuses, and it means more of the same: no accountability for financial institutions and little help for borrowers.




Last week, The New York Times reported that regulators were close to settling with 14 banks whose foreclosure practices had ridden roughshod over borrowers and the rule of law. Although the deal has not been made official and its terms are as yet unknown, the initial report said borrowers who had lost their homes because of improprieties would receive a total of $3.75 billion in cash. An additional $6.25 billion would be put toward principal reduction for homeowners in distress.


The possible settlement will conclude a regulatory enforcement action brought in 2011 by the Comptroller of the Currency (http://topics.nytimes.com/top/reference/timestopics/organizations/c/comptroller_of_the_currency/index.html?inline=nyt-org) and the Federal Reserve (http://topics.nytimes.com/top/reference/timestopics/organizations/f/federal_reserve_system/index.html?inline=nyt-org). Regulators moved against 14 large home loan (http://topics.nytimes.com/your-money/loans/index.html?inline=nyt-classifier) servicers after evidence emerged of rampant misdeeds marring the foreclosure process.


Under the enforcement action, the banks were required to review foreclosures conducted in 2009 and 2010. They hired consultants to analyze cases in which borrowers suspected that they had been injured by bank practices, such as levying excessive and improper fees or foreclosing when a borrower was undergoing a loan modification (http://topics.nytimes.com/your-money/loans/loan-modifications/index.html?inline=nyt-classifier). Some 4.4 million borrowers journeyed through the foreclosure maze during the period.


Some back-of-the-envelope arithmetic on this deal is your first clue that it is another gift to the banks. It’s not clear which borrowers will receive what money, but divvying up $3.75 billion among millions of people doesn’t amount to much per person. If, say, half of the 4.4 million borrowers were subject to foreclosure abuses, they would each receive less than $2,000, on average. If 10 percent of the 4.4 million were harmed, each would get roughly $8,500.


This is a far cry from the possible penalties outlined last year (http://www.occ.gov/topics/consumer-protection/foreclosure-prevention/financial-remediation-framework.pdf) by the federal regulators requiring these reviews. For instance, regulators said that if a bank had foreclosed while a borrower was making payments under a loan modification, it might have to pay $15,000 and rescind the foreclosure. And if it couldn’t be rescinded because the house had been sold, the bank could have had to pay the borrower $125,000 and any accrued equity.


Recall that the foreclosure exams came about because regulators had found pervasive problems. A study by the Fed and the comptroller’s office found “critical weaknesses in servicers’ foreclosure governance processes, foreclosure document preparation processes, and oversight and monitoring of third-party vendors, including foreclosure attorneys.” The United States Trustee, which oversees (http://www.nytimes.com/2011/05/15/business/15gret.html?pagewanted=all&_r=0) the nation’s bankruptcy courts, also uncovered huge flaws in bank practices.


So if you start to hear rumbling that the reviews didn’t turn up many misdeeds, you can discount it as nonsense. One could easily argue that this reported settlement was pushed by the banks so they could limit the damage they would have incurred if an aggressive review had continued.


“We think if the reviews were done right, the payouts would have been significantly higher than they appear to be under this settlement,” said Alys Cohen, staff attorney at the National Consumer Law Center (http://www.nclc.org/). “The regulators will have abdicated their responsibility if the banks end up getting off the hook easily and cheaply.”


Let’s not forget that this looming settlement will also conclude the foreclosure reviews that were supposed to provide regulators with chapter and verse on how banks abused their customers. Stopping the reviews before they are finished means that the banks will be allowed to claim that abuses were rare and that $10 billion is an adequate penalty.

http://www.nytimes.com/2013/01/06/business/bank-settlement-may-leave-tiny-slices-of-a-smaller-pie.html?_r=2&

[boutons_deux]

“The regulators will have abdicated their responsibility if the banks end up getting off the hook easily and cheaply.”

they can look forward go through the swinging door into quid-pro-quo high-paid financial jobs.

[Winehole23]

self-service pays for sure

[Winehole23]

http://www.bloomberg.com/news/2013-01-04/goldfinger-would-envy-latest-taxpayer-shakedown.html

[boutons_deux]

The Financial War Against the Economy at LargeThe weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

Workers have become so deeply indebted on their home mortgages, credit cards and other bank debt that they fear to strike or even to complain about working conditions. Losing work means missing payments on their monthly bills, enabling banks to jack up interest rates to levels that used to be deemed usurious. So debt peonage and unemployment loom on top of the wage slavery that was the main focus of class warfare a century ago. And to cap matters, credit-card bank lobbyists have rewritten the bankruptcy laws to curtail debtor rights, and the referees appointed to adjudicate disputes brought by debtors and consumers are subject to veto from the banks and businesses that are mainly responsible for inflicting injury.


The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society. In contrast to the promise of democratic reform nurturing a middle class a century ago, we are witnessing a regression to a world of special privilege in which one must inherit wealth in order to avoid debt and job dependency.

The emerging financial oligarchy seeks to shift taxes off banks and their major customers (real estate, natural resources and monopolies) onto labor. Given the need to win voter acquiescence, this aim is best achieved by rolling back everyone’s taxes. The easiest way to do this is to shrink government spending, headed by Social Security, Medicare and Medicaid.

Financial lobbyists quickly discovered that the easiest ploy to shift the cost of social programs onto labor is to conceal new taxes as user fees, using the proceeds to cut taxes for the elite 1%. This fiscal sleight-of-hand was the aim of the 1983 Greenspan Commission.

The government’s seashore insurance program, for instance, recently incurred a $1 trillion liability to rebuild the private beaches and homes that Hurricane Sandy washed out. Why should this insurance subsidy at below-commercial rates for the wealthy minority who live in this scenic high-risk property be treated as normal spending, but not Social Security?

By not raising taxes on the wealthy or using the central bank to monetize spending on anything except bailing out the banks and subsidizing the financial sector, the government follows a pro-creditor policy. Tax favoritism for the wealthy deepens the budget deficit, forcing governments to borrow more. Paying interest on this debt diverts revenue from being spent on goods and services. This fiscal austerity shrinks markets, reducing tax revenue to the brink of default


http://truth-out.org/news/item/13718-the-financial-war-against-the-economy-at-large

America is so fucked and so unfuckable. But cheer up, mates, Be Happy, Don't Worry.

[Winehole23]

according to new documents filed in state Supreme Court in Manhattan late on Friday, questionable practices by the bank’s loan servicing unit have continued well after the Countrywide acquisition; they paint a picture of a bank that continued to put its own interests ahead of investors as it modified troubled mortgages.

The documents were submitted by three Federal Home Loan Banks (http://topics.nytimes.com/top/reference/timestopics/organizations/f/federal_home_loan_banks/index.html?inline=nyt-org), in Boston, Chicago and Indianapolis, and Triaxx, an investment vehicle that bought mortgage securities. They contend that a proposed $8.5 billion settlement that Bank of America struck in 2011 to resolve claims over Countrywide’s mortgage abuses is far too low and shortchanges thousands of ordinary investors.


The filing raises new questions about whether a judge will approve the settlement. If it is denied, the bank would face steeper legal obligations. http://www.nytimes.com/2013/02/04/business/new-questions-raised-over-a-bank-of-america-settlement.html?_r=0

[TDMVPDPOY]

fck was looking for this thread to posts in again

have u guys seen where you get arrested for 2 charges, they will charge you the first one to let you posts bail, then bam they send out a warrant for the 2nd charge arrest just to take ur bail money.....

[Winehole23]

LE is all about fees and fines, amigo . . .

[coyotes_geek]

When an outside analysis uncovered serious flaws with thousands of home loans, JPMorgan Chase executives found an easy fix.

Rather than disclosing the full extent of problems like fraudulent home appraisals and overextended borrowers, the bank adjusted the critical reviews, according to documents filed early Tuesday in federal court in Manhattan. As a result, the mortgages, which JPMorgan bundled into complex securities, appeared healthier, making the deals more appealing to investors.


The Dexia lawsuit centers on complex securities created by JPMorgan, Bear Stearns and Washington Mutual during the housing boom. As profits soared, the Wall Street firms scrambled to pump out more investments, even as questions emerged about their quality.

With a seemingly insatiable appetite, JPMorgan scooped up mortgages from lenders with troubled records, according to the court documents. In an internal "due diligence scorecard," JPMorgan ranked large mortgage originators, assigning Washington Mutual and American Home Mortgage the lowest grade of "poor" for their documentation, the court filings show.

The loans were quickly sold to investors. Describing the investment assembly line, an executive at Bear Stearns told employees "we are a moving company not a storage company," according to the court documents.

As they raced to produce mortgage-backed securities, Washington Mutual and Bear Stearns also scaled back their quality controls, the documents indicate.

In an initiative called Project Scarlett, Washington Mutual slashed its due diligence staff by 25 percent as part of an effort to bolster profit. Such steps "tore the heart out" of quality controls, according to a November 2007 e-mail from a Washington Mutual executive. Executives who pushed back endured "harassment" when they tried to "keep our discipline and controls in place," the e-mail said.

Even when flaws were flagged, JPMorgan and the other firms sometimes overlooked the warnings.

link (http://finance.yahoo.com/news/e-mails-imply-jpmorgan-knew-033129158.html)

[boutons_deux]

Why Pete Petersen has spent $100Ms trying privatize SS. He knows Wall St will simply steal $100Bs.

[Winehole23]

When an outside analysis uncovered serious flaws with thousands of home loans, JPMorgan Chase executives found an easy fix.

Rather than disclosing the full extent of problems like fraudulent home appraisals and overextended borrowers, the bank adjusted the critical reviews, according to documents filed early Tuesday in federal court in Manhattan. As a result, the mortgages, which JPMorgan bundled into complex securities, appeared healthier, making the deals more appealing to investors.
The Dexia lawsuit centers on complex securities created by JPMorgan, Bear Stearns and Washington Mutual during the housing boom. As profits soared, the Wall Street firms scrambled to pump out more investments, even as questions emerged about their quality.

With a seemingly insatiable appetite, JPMorgan scooped up mortgages from lenders with troubled records, according to the court documents. In an internal "due diligence scorecard," JPMorgan ranked large mortgage originators, assigning Washington Mutual and American Home Mortgage the lowest grade of "poor" for their documentation, the court filings show.

The loans were quickly sold to investors. Describing the investment assembly line, an executive at Bear Stearns told employees "we are a moving company not a storage company," according to the court documents.

As they raced to produce mortgage-backed securities, Washington Mutual and Bear Stearns also scaled back their quality controls, the documents indicate.

In an initiative called Project Scarlett, Washington Mutual slashed its due diligence staff by 25 percent as part of an effort to bolster profit. Such steps "tore the heart out" of quality controls, according to a November 2007 e-mail from a Washington Mutual executive. Executives who pushed back endured "harassment" when they tried to "keep our discipline and controls in place," the e-mail said.

Even when flaws were flagged, JPMorgan and the other firms sometimes overlooked the warnings.



financial intermediaries preying on their clients? tends to undermine trust, but they probably figured on not being caught.

absent the Panic of 2008, they'd likely not have been.

[boutons_deux]

And how the 0.01% benefit from the Banksters Great Depression of their own making0

The Ugly Truth About America's Housing "Recovery" -- It's Wall St. Buying Homes to Rent Back to Their Former Owners

In Georgia, home prices are up 5 percent over last year, a year in which we also had one of the highest foreclosure rates in the country. Seems a little odd, doesn’t it? Don't foreclosures usually drive down the market?

That’s because the housing “recovery,” as they’re calling it, is fueled almost entirely by Wall Street private equity firms, hedge funds and the Fed's unwavering support. After creating a massive bubble in home prices that eventually burst and caused our economy to go into a tailspin, these guys have decided to come back for more, and figured out a way to profit off their destruction -- by turning foreclosed homes into rentals and securitizing the rental income.

Many are claiming this is the “private-sector solution” for the recovery we need to get the economy going again. The argument goes that investors snapping up these homes and fixing them up does more for the community than letting the houses just sit there, blighting the neighborhoods and lowering values.

That argument might have made sense for the pilot program Fannie Mae launched last year. In that bulk auction deal, investors had to agree not to sell properties facing foreclosure for a designated period of time. Many of the homes were occupied with tenants, and vacant homes had been on the market and not sold for at least six months. Of course, that deal proved too restrictive for most Wall Street types, leading the sale in Atlanta to eventually fall through.

The Blackstone group, the biggest player in the new REO to rental market, has spent $2.5 billion in the last year purchasing 16,000 homes, a number that amounts to over $100 million per week. Property records show that many of the homes Blackstone has acquired in Fulton County over the last few months were purchased on the courthouse steps at the monthly foreclosure auction, or through short sales—when a lender agrees to accept less than the amount owed on a loan.

The vast majority of these homes are not empty, but occupied by homeowners who fell behind during the great recession.

The sale often represents the last nail in the coffin of foreclosure in Georgia, a non-judicial foreclosure state where there is very little opportunity or time to make good once a homeowner falls into default. Blackstone, operating under its subsidiary, THR Georgia, buys the homes for cash, usually at deep discounts from the principle balance owed on the mortgage. Take one of the homes it snapped up at the November auction as an example: THR purchased the Southeast Atlanta home at auction for $90,000. The principle due on the mortgage that was foreclosed upon was $219,300.

http://www.alternet.org/occupy-wall-street/ugly-truth-about-americas-housing-recovery-its-wall-st-buying-homes-rent-back

[boutons_deux]

Bank of America Bombshell: Whistleblowers Reveal Orchestrated Coverup and Massive Borrower Harm


Borrowers who had had foreclosures that were pending or had completed foreclosure sales in 2009 and 2010 could request an investigation by independent reviewers, selected and paid for by the servicers but subject to approval by the OCC.


Some experts argued that the 2009 and 2010 time range was too narrow and excluded many borrowers who had been treated improperly. These professionals also questioned whether the investigators would operate independently and fairly.
?The OCC consent orders had been launched in an unsuccessful effort to render the ongoing 50 state attorney general/Federal negotiations moot. Critics described how these orders were regulatory theater, with Georgetown law professor Adam Levitin comparing them to promising in public to spank a child, then taking him indoors and giving him a snuggle. Leaks during the course of the reviews confirmed these concerns, revealing deep-seated conflicts, limited competence among the review firms, half-hearted efforts to reach eligible homeowners, and aggressive efforts by the banks to suppress any findings of harm.

As grim as this sounds, the conduct was worse than the leaks suggested. After extensive debriefing of Bank of America whistleblowers, we found overwhelming evidence that the bank engaged in certain abuses frequently, in some cases pervasively, in its servicing of delinquent mortgages. This is particularly important because Bank of America has been identified in previous settlements as far and away the biggest mortgage miscreant, paying over 40% of last year’s state/federal mortgage settlement among the five biggest servicers.

This settlement, as intended, was yet another significant bailout to predatory servicers. As we will demonstrate over our upcoming series of posts, conservative estimates of damages due to borrowers under the consent order who suffered improper foreclosures from Bank of America exceed $10 billion. That contrasts with the cash portion of the settlement amount for Bank of America of $1.2 billion.** The amount owing for other abusive practices would have increased this total further.

Overwhelming evidence of widespread, systematic abuses. No interviewee estimated harm as occurring in less than 30% of the files they reviewed; one put serious harm at 80%. The interviewees did not simply describe individual borrower suffering in graphic terms (as one put it, “I saw files that would make your stomach turn.”) Multiple interviewees would describe widespread, sometimes pervasive patterns of impermissible conduct.


The reviews confirm what both servicing experts and foreclosure defense attorneys have seen since the crisis: Bank of America’s servicing standards were poorly designed and thus unable to handle the deluge of troubled borrowers (suspense accounts, modifications, bankruptcy, etc.). In addition, BofA had a low level of competence in their servicing area and, as a result, the problems with their servicing was made worse. For instance, reviewers gave examples of types of behavior where Bank of America practices were clearly contrary to the law, yet the banks’ personnel confidently maintained that they were proper


OCC’s badly flawed review structure compounded by complex, chaotic, and undermanaged implementation by Promontory. By delegating so much of the review process to “independent” firms (many of whom had little or no experience with servicing and foreclosure), the OCC doubled down on the same incompetence and poor standards that Bank of America and the other servicers already had in their servicing departments. Many of the flaws in the review process (compartmentalized reviews, conflicted supervisors, poor senior review for issues or disputes) were mirror images of the problems at the servicer. These problems were made worse by a bizarre management structure and frequent changes to test content and directives.


Concerted efforts to suppress finding of harm. The organizational design, the way the reviewers were managed, the elimination of areas of inquiry, and evidence of records tampering with Bank of America records all point to a multifacted, if not necessarily well orchestrated, program to make sure as much damaging information as possible was not considered or minimized. To give one example: state law issues were eliminated from the in G test, which covered loan modifications (see Appendix II below), reducing it over time from 2200 questions to 500.


Dubious role of Promontory. Promontory was a poor choice to perform the review. It had virtually no internal expertise in serivcing, provided little or no supervision, and, either by design or incompetence, managed to politicize the review process rather than make it independent.


Promontory’s recent accomplishments include telling MF Global’s board that it had “robust enterprise-wide risk management” five months before it failed [16] and finding only $14 million of Standard Chartered wire transfers in a money laundering investigation to be out of compliance, when the bank eventually admitted the amount was $250 billion [17]. That is no typo, that is an over four order of magnitude difference.


Why does Promontory prosper despite such implausible, indeed, embarrassing performances? It’s because financial firms are eager buyers of extreme management-flattering positions that are seldom subjected to scrutiny thanks to Promontory’s roster of former regulators. Indeed, Promontory occupies a position no firm holds in any other heavily regulated space, that of being the dominant shadow regulator. As we will demonstrate in later posts, the claims made by Promotory about the review process as to its independence and completeness are at odds with considerable evidence on the ground.


http://www.alternet.org/economy/bank-america-bombshell-whistleblowers-reveal-orchestrated-coverup-and-massive-borrower-harm


It was dubya's OCC that shutdown 19 states, including NY Spitzer whom dubya's DoJ later took down, that ask the govt to stop predatory lending.

[boutons_deux]

OCC FundingThe OCC does not receive appropriations from Congress. Instead, the OCC's operations are funded primarily by assessments on national banks and federal savings associations. National banks and federal thrifts pay for their examinations, and they pay for the OCC's processing of their corporate applications. The OCC also receives revenue from its investment income, primarily from U.S. Treasury securities.
The OCC's ObjectivesThe OCC's activities are predicated on four objectives that support the agency's mission to ensure a stable and competitive national system of banks and savings associations:


Ensure the safety and soundness of the national system of banks and savings associations.
Foster competition by allowing banks to offer new products and services.
Improve the efficiency and effectiveness of OCC supervision, including reducing regulatory burden.
Ensure fair and equal access to financial services for all Americans.

http://www.occ.gov/about/what-we-do/mission/index-about.html

:lol

So OCC is financed by financial sector, OBVIOUSLY NO CONFLICT OF INTEREST :lol

[Winehole23]

Let the lawsuits and the fines begin. Here is the conclusion from the Senate report; more detail later after the hearing today.


“The J.P. Morgan Chase whale trades provide a startling and instructive case history of how synthetic credit derivatives have become a multi-billion source of risk within the US banking system. IE Buffett’s “weapons of mass destruction” pose a dangerous risk to the banking system. I was shocked that JP Morgan breached their risk limits on derivatives positions more than 330 times over 5 months in 2012. Get that? The most iconic name in banking hid hundreds of millions of losses, billions really, from the public, the regulators, the politicians and the shareholders over a span of 3 months. Ouch!


“They also demonstrate how inadequate derivative valuation practices enabled traders to hide substantial losses for months at a time; lax hedging practices obscured whether derivatives were being used to offset risk or take risk;
risk limit breaches were routinely disregarded; risk evolution models were manipulated to downplay risk; inadequate regulations oversight was too easily dodged or stonewalled and derivative trading and financial results were misrepresented to investors, regulators, policy makers, and the taxpaying public who, when banks lose big, may be required to finance multi-billion bailouts.”

http://www.forbes.com/sites/robertlenzner/2013/03/15/the-cover-up-is-always-worse-than-the-crime/

[boutons_deux]

http://www.forbes.com/sites/robertlenzner/2013/03/15/the-cover-up-is-always-worse-than-the-crime/

by this time, the crimes and criminals are well-known, the solutions are, in practice, non-existent

[boutons_deux]

TTP news:

"Everyone but China" Agreement Prevents Regulation of Hot Money and Speculation

For example, one of the things going on in the world economy right now is that there's all sorts of hot speculative capital or finance--bonds, derivatives, and so forth--moving out of the rich countries because the rich countries aren't doing so well and sloshing around in the emerging market in developing countries. And those countries are regulating that so that it doesn't cause asset bubbles and crises in their countries. But our treaty would make those kind of measures illegal.

The TPP requires that capital among all the trading partners in the treaty freeze flows freely and without delay in between all the trading partners. This stands in stark contrast with most of the economic evidence that's been coming out, and even the views of the IMF.

But 20�years of economic evidence shows that there's no strong relationship between opening yourself up to capital flows and economic growth and that there is a pretty strong relationship between opening up to capital flows and having banking crises,

What we're really concerned about is the movement of things like you noted, such as derivatives, currency trades, stocks and bonds, and so forth that can move in and out of a country within minutes and days.

Brazil's had an interest rate at about 10�percent since 2009. The United States interest rate's been about 2�percent. So you borrow money from the United States at 2�percent, you invest it in Brazil--say you buy the Brazilian currency at 10�percent. You make the differential in between the two interest rates. You can manufacture a derivatives trade within that and bet against the dollar and on the Brazilian real at the same time, and if you're leveraged significantly, you can make a killing for yourself. But you might also cause some real problems in the case of Brazil.

JAY: The TPP--everyone but China--is this part of the scenario, that the Trans-Pacific Partnership becomes a tool for waging currency war against China?

GALLAGHER: I'm not sure it's a tool for waging a currency war against China, but it really is going to restrict the ability of the countries to defend themselves with respect to this currency war.


http://truth-out.org/video/item/15175-everyone-but-china-agreement-prevents-regulation-of-hot-money-and-speculation

iow, how the US private sector is negotiating the rigging the international money game, with no participation or even knowledge by the US govt.

[Winehole23]

Goldman Sachs Group Inc suffered a defeat on Monday as the U.S. Supreme Court let stand a decision forcing it to defend against claims it misled investors about mortgage securities that lost value during the 2008 financial crisis. Without comment, the court refused to consider Goldman's appeal of a September 2012 decision by the 2nd U.S. Circuit Court of Appeals in New York. Goldman shares sank more than 2 percent.


That court let the NECA-IBEW Health & Welfare Fund, which owned some mortgage-backed certificates underwritten by Goldman, sue on behalf of investors in certificates it did not own, but which were backed by mortgages from the same lenders.
Goldman and other banks have faced thousands of lawsuits by investors seeking to recoup losses on mortgage securities.


The bank has said that letting the 2nd Circuit decision stand could cost Wall Street tens of billions of dollars.http://www.reuters.com/article/2013/03/18/us-usa-court-goldman-idUSBRE92H0IU20130318

[Winehole23]

JPMorgan, don’t forget, is the largest derivatives dealer in the world. Trillions of dollars in such instruments sit on its and other big banks’ balance sheets. The ease with which the bank hid losses and fiddled with valuations should be a major concern to investors.


As for taxpayers, the Senate report clearly indicates that JPMorgan Chase is too big to regulate. The report found that the bank failed to provide crucial portfolio data to its regulators at the Office of the Comptroller of the Currency and that those regulators did not investigate questionable trading at the bank. The overseers accepted the bank’s assurances that nothing was amiss.


We already know that banks of JPMorgan’s size are also too big to be allowed to fail and too big to prosecute. Such banks are too big to regulate and apparently too big to manage. So how much more evidence do we need that banks like JPMorgan are simply too big a risk for taxpayers to bear? http://www.nytimes.com/2013/03/17/business/jpmorgans-follies-for-all-to-see-in-a-senate-report.html?_r=0&adxnnl=1&ref=todayspaper&pagewanted=2&adxnnlx=1363792563-ZBgQNrxQwr2XcwUOBueXkA

[Winehole23]

regulators asleep at the switch:


For more than five years, many homeowners who complained about mortgage industry foreclosure abuses have wondered whether anyone with a financial stake in keeping them in their home was paying attention. On Thursday, with the release of a new report from a federal watchdog, they got their answer: No.

The report, by the inspector general of the Federal Housing Finance Agency, says banks and other companies that manage more than 10 million home loans for Freddie Mac "largely failed" to alert the mortgage giant to the most serious category of homeowner complaints, despite a requirement they do so. These "escalated complaints" often include the most serious allegations of misconduct, including improper fees, misapplied mortgage payments and a frustrating cycle of lost paperwork and unreturned calls. In some instances, the mismanagement has led to a wrongful foreclosure.


"The results are shocking on a number of different levels," said Steve Linick, the FHFA inspector general, in an interview with The Huffington Post. "It is surprising that servicers were not reporting in such large numbers, that Freddie was not on top of this, and that [the FHFA] did not catch it in its exam."


Four of the largest bank servicers -- Bank of America, Wells Fargo, Citigroup and Provident -- reported no escalated cases to Freddie Mac, despite handling more than 20,000 over a 14-month period, according to the report. Freddie Mac examiners did not notice that the mortgage companies were failing to disclose the complaints, nor did the FHFA, which relied on "incomplete" Fannie Mae examinations, the report concludes. The FHFA oversees the bailed out lenders Freddie Mac and Fannie Mae.http://www.huffingtonpost.com/2013/03/21/freddie-mac-homeowner-complaints-inspector-general_n_2919641.html

[boutons_deux]

Foreclosure Review Report Shows That the OCC Continues to Bury Wall Street’s Bodies


From the homeowner who died fighting a foreclosure based on a typo (http://www.laweekly.com/2013-03-07/news/wells-fargo-typo-victim-dead-larry-delassus/full/) to the family evicted at gunpoint at 3am (http://www.alternet.org/story/155292/dozens_of_police_evict_georgia_family_at_gunpoint_ at_3am?ak_proof=1&akid=8725.47561.tAOB5N&rd=1&t=2), there is no shortage of heartbreaking stories of improper evictions. But while victims of wrongful foreclosures are frequently too small to find justice, the banks perpetuating the crimes against them remain far too big to be held accountable. The most recent entry in the “banks got bailed out, we got sold out” saga is the latest report by the Government Accountability Office on the Independent Foreclosure Review.


Deception #1: Regulators obfuscated abuses by failing to provide a consistent approach.

Deception #2: Lack of transparency.

Deception #3: The OCC misled the public about how many homeowners were harmed.

Deception #4: Missing Documents were not considered “errors.”

Deception #5: Regulators tried to find as few harmed borrowers as possible.

http://truth-out.org/news/item/15767-foreclosure-review-report-shows-that-the-occ-continues-to-bury-wall-streets-bodies

[boutons_deux]

Here’s How the Foreclosure Reviews Could Have Been Done Much Faster and Cheaper (http://www.nakedcapitalism.com/2013/04/heres-how-the-foreclosure-reviews-could-have-been-done-much-faster-and-cheaper.html)

The OCC made the not-surprising confession in Senate hearings last week that if it had to do them all over again, it would have handled them differently.

On the assumption that the OCC is sincere in its repentance, Michael Olenick offers one way to have executed the reviews at vastly lower cost than the botched process that resulted.

However, there is no particular reason to believe that. As we and other observers said from the announcement of the Fed and OCC consent orders, the IFR was never intended to be a serious exercise. The approach of having bank-friendly consultants hired by the banks assured a compromised outcome.

Years mired in the world of foreclosure fraud leaves one aghast at the level of sheer chutzpah people exhibit. It was difficult, in this context, to believe that the OCC could sink to a new low – especially now that Julie Williams, Chief Counsel of the OCC, exited her regulatory role, through the revolving door of course, and straight to Promontory, a firm she helped enrich enormously by approving it for three large consulting projects in the Independent foreclosure review. But the OCC managed to do the impossible last week in continuing to claim that the consultants they’d approved, and who demonstrated themselves incapable of managing the foreclosure reviews, were actually up to the task.


http://www.nakedcapitalism.com/2013/04/heres-how-the-foreclosure-reviews-could-have-been-done-much-faster-and-cheaper.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

systematic theft of $100Bs, $Ts?, of Human-Americans' homes and wealth.

and MERS lives on

[boutons_deux]

Are the Banks Already Orchestrating Another Meltdown?On Friday, the New York Times reported (http://www.nytimes.com/2013/04/19/business/banks-revive-risky-loans-and-mortgages.html?pagewanted=1) that banks are continuing to practice risky behavior as the economy “improves.” While the mainstream media has been quick to discuss the improving economy, not much conversation has been situated around whom exactly the economy is improving for and how millions of Americans still struggle financially. Just one example, for instance, is that 11 million renters currently pay more than 50 percent (http://www.alternet.org/activism/how-much-your-income-goes-toward-rent-11-million-shelter-comes-high-price) of their incomes on housing.

But Wall Street is making more investments, known as structured financial products, and escaping new financial regulations, such as the Dodd-Frank bill that did not change the structure of how loans are bundled — which, when done riskily, causes crisis.


http://www.alternet.org/economy/are-banks-already-orchestrating-another-meltdown

[boutons_deux]

Bank Of America Paid Foreclosure Bonuses While Lying To Homeowners (http://thinkprogress.org/economy/2013/06/17/2166451/bank-of-america-foreclosure-bonuses-lying/)


One of the nation’s largest mortgage servicers intentionally, knowingly, and routinely falsifies paperwork and lies to homeowners in order to boot them from their homes, according to bank insiders (http://www.propublica.org/article/bank-of-america-lied-to-homeowners-and-rewarded-foreclosures).

The latest of many civil suits over Bank of America’s handling of foreclosures and mortgage modifications has produced affidavits from six former employees alleging the bank actively and systematically deceived homeowners and sought foreclosures over modifications that would have kept borrowers in their homes. A seventh signed statement from a man who worked for one of the bank’s contractors reinforces the picture of a company-wide culture of putting profits over customers, even in defiance of facts.

The documents, first reported by Pro Publica (http://www.propublica.org/article/bank-of-america-lied-to-homeowners-and-rewarded-foreclosures), are part of a lawsuit over the bank’s handling of trial loan modifications under the Home Affordable Modification Program (HAMP) created by the Obama administration. The employees, whose work for the bank ranged from loan origination to collections to reviewing internal loan databases, swear that Bank of America used a variety of internal policies to discourage loan modifications and encourage foreclosures, even
when loan documents visible to the employees showed the bank’s rationale for foreclosing was untrue. Those policies include:

• ‘Blitzing’ (http://www.propublica.org/documents/item/713751-declaration-william-wilson.html): According to William Wilson, the bank conducted a “blitz” twice a month, instructing case managers to deny any HAMP application more than 60 days old, including “files [in] which the homeowner had provided all required financial documents and fully complied with the terms of a Trial Period Plan.”


• $500 bonuses for filling foreclosure quotas (http://www.propublica.org/documents/item/713752-simone-gordon-declaration.html): According to Simone Gordon, an employee “who placed ten or more accounts into foreclosure in a given month received a $500 bonus. Bank of America also gave employees gift cards to retail stores like Target or Bed Bath and Beyond as rewards for placing accounts into foreclosure.”


• Lying to clients about documentation: Gordon’s affidavit (http://www.propublica.org/documents/item/713752-simone-gordon-declaration.html) says it was bank policy to sit on financial documents borrowers submitted for 30 days, then label them “stale” and require the homeowner to re-apply. Bert Sheeks, the contract employee, was instructed “to find any pretext (http://www.propublica.org/documents/item/713746-declaration-bert-sheeks.html)” to justify closing outstanding loan modification applications, “even in cases where we knew the borrower had, in fact, responded with complete documents.” Erika Brown “was instructed to inform every homeowner who called in that their file was ‘under review’” even when she could see no one had looked at the documents in question. Brown says she personally saw more than a hundred instances in which a bank official cancelled a loan modification due to “non payment” when the file showed all payments had been received (http://www.propublica.org/documents/item/713747-declaration-erika-brown.html) on time.



The sum of the allegations is that the bank routinely falsified documents and knowingly foreclosed on borrowers who were in full compliance with modification plans. The program, which was the biggest federal initiative intended to alleviate the foreclosure crisis, should have helped 800,000 more homeowners (http://thinkprogress.org/economy/2012/09/11/829461/report-blames-big-banks-preventable-foreclosure/) than it did, according to a 2012 report.

Bank of America spokespeople say the allegations are false. The company has already “spent more than $45 billion to settle claims (http://www.bostonglobe.com/business/2013/06/15/bank-american-gave-bonuses-foreclose-clients-lawsuit-claims/2e0t7a2jWdtS0yUqwXeH8H/story.html) tied to its 2008 takeover of Countrywide Financial Corp,” the Boston Globe notes, and the top-to-bottom malfeasance alleged in this suit echoes allegations from 2011 that the bank paid to settle (http://www.propublica.org/article/four-whistleblowers-who-sounded-the-alarm-on-banks-mortgage-shenanigans). Bank of America is far from alone in that regard, as many of the largest banks in the country have paid to settle allegations of abusive practices such as “robosigning (http://thinkprogress.org/economy/2010/10/14/173573/wells-fargo-busted/).”

Despite such settlements, the government has prosecuted more protesters than it has banks (http://thinkprogress.org/economy/2013/06/12/2145291/meet-the-foreclosed-grandmas-facing-federal-charges-for-protesting-too-big-to-jail/) involved in the foreclosure crisis, and abuses have continued (http://thinkprogress.org/economy/2012/10/03/952601/report-abusive-practice-settlement/).

Bank of America and other large banks that were supposed to harness HAMP funds to help resolve the foreclosure crisis were instead quite effective at using the program to boost their own balance sheets. The manipulation of the program depicted in these affidavits is more evidence that direct principal reduction (http://thinkprogress.org/economy/2013/06/04/2100661/despite-rising-home-prices-we-still-need-principal-reduction/) would be a more effective (http://thinkprogress.org/economy/2013/05/02/1956881/budget-office-principal-reductions-would-save-taxpayers-billions-reduce-unnecessary-foreclosures/) use of federal housing funds than HAMP’s attempted partnership with banks.

http://thinkprogress.org/economy/2013/06/17/2166451/bank-of-america-foreclosure-bonuses-lying/

[Winehole23]

looks like another big fine for BofA.

the pattern is clear: they'll admit no wrongdoing, pay a billion to settle, and promise to do better next time.

[Winehole23]

www.theonion.com/articles/financial-sector-thinks-its-about-ready-to-ruin-wo,32865/

[boutons_deux]

:lol

SEC Will Get Tougher On Wrongdoing At Big Banks (http://thinkprogress.org/economy/2013/06/19/2179161/sec-will-get-tougher-on-wrongdoing-at-big-banks/)

In a break from past practice, the Securities and Exchange Commission (SEC) will begin seeking more admissions of wrongdoing (http://www.bloomberg.com/news/2013-06-18/sec-to-seek-guilt-admissions-in-more-cases-chairman-white-says.html) when it settles enforcement cases with banks, Chairman Mary Jo White announced. Agency staff was alerted to the decision in a letter sent on June 17.

The change won’t apply to all cases, but will depend on “how much harm has been done to investors, how egregious is the fraud,” White said at a Wall Street Journal event on Tuesday, Bloomberg reports

http://thinkprogress.org/economy/2013/06/19/2179161/sec-will-get-tougher-on-wrongdoing-at-big-banks/

"harm has been done to investors"

only sympathy for harm to capitalists, NONE for robbed municiplalities, or homeowners who got "harmed" by 4M fraudulent foreclosures.

[boutons_deux]

well, no fucking shit, I'm so surprised

Monitor Finds Lenders Failing Terms of Settlement

The nation’s five biggest mortgage lenders have likely already satisfied their financial obligations under last year’s $25 billion settlement over mortgage abuses, helping hundreds of thousands of families keep their homes. But four of the five have yet to meet the settlement’s second goal: ending the maze of frustrations that borrowers must navigate in order to modify their loans, according to a report Wednesday by the settlement’s independent monitor.

Four of the banks failed to meet at least one of the 29 loan-servicing criteria they agreed to meet, like a requirement that borrowers be notified of any documents missing from their applications in a timely manner. The settlement requires that borrowers be notified within five days and given 30 days to supply the missing paperwork.

“I think what you see is there’s still a communication problem,” said Joseph A. Smith Jr., the monitor. “If there’s a unifying feature, it’s that the servicers who failed these things are not yet communicating effectively.” The banks report their own performance on the 29 criteria, and their findings are then tested in a random sampling by outside groups.

Citibank failed three metrics, two of which involve notifying borrowers of missing documents in a timely fashion and one that requires a letter containing accurate information be sent to a homeowner before foreclosure.
Bank of America failed two metrics, one regarding missing documents and the other regarding the pre-foreclosure letter. Wells Fargo also flunked on the missing documents.

JPMorgan Chase failed to adhere to the prescribed timeline for reviewing loan modification requests and notifying customers of its decision. It also failed to remove home insurance policies, known as forced-place insurance, within two weeks of a homeowner’s submitting proof that he or she had insurance.

The fifth lender, Ally Financial, whose mortgage servicing is now handled by other companies, was not found to have failed on any of the metrics.

http://mobile.nytimes.com/2013/06/20/business/economy/monitor-finds-lenders-failing-terms-of-settlement.html?from=homepage

and the punishment will be ???

[boutons_deux]

6 Unbelievable Ways the Big Banks Are Scamming You

It is going on five years since the financial crash and three years since President Obama signed the meager Dodd–Frank Wall Street Reform and Consumer Protection Act, and the big banks are still scamming and conning and ripping off their customers. What a huge surprise.

After the financial crash, we heard about a laundry list of abuses and frauds that ranged from small things, like hidden fees, to pushing minorities into subprime loans and then switching them into more expensive mortgages at signing time, to huge things like selling trillions of dollars in complicated CDO schemes and making bets on derivatives of derivatives without having the reserves to pay off what they owed when the bets went bad.

Of course, no one at the top was prosecuted and the banks were allowed to settle a host of charges (which meant that their shareholders, not the executives who made the decisions, paid the fines). The bad behavior gave these giants a competitive advantage, driving out what good companies there were. So the costly and destructive bad behavior, schemes, cons and scams continue.

1. Falsifying Paperwork, Blitzing, Lying About Payments to Force Homeowners Into Foreclosure

This week, ProPublica (http://thinkprogress.org/economy/2013/06/17/2166451/bank-of-america-foreclosure-bonuses-lying/) [3] released a report detailing the shocking ways that Bank of America has been pushing homeowners into foreclosure. Employees lied about documentation and falsified paperwork to force families out of their homes when these customers thought they were getting a loan modification under the government’s Home Affordable Modification Program (HAMP). To make matters worse, the bank gave bonuses to employees who were able to reach monthly quotas of people they forced into foreclosure.

According to a lawsuit against Bank of America, the bank used “blitzing” twice a month to deny HAMP applications even when the homeowner had fully complied with the program’s requirements; it gave employees $500 bonuses each month they forced 10 or more homeowners into foreclosure; it intentionally ignored applications for 30 days, then declared them late and forced homeowners to reapply; it closed applications even when they knew the homeowner had met all criteria; and it canceled loan modifications because of “late payments” when the bank’s records shows that payments had been made on time.
Of course, as long as the government refuses to prosecute banks and bankers for violating laws, and instead negotiating “settlements” that require bank shareholders to pay fines, bankers will see no reason to stop this kind of activity.

2. Bank Protection “Service” Puts Consumers at “Greater Risk Of Harm”

Last week a report (http://www.consumerfinance.gov/reports/the-cfpb-study-of-overdraft-programs/) [4] from the new Consumer Financial Protection Bureau (CFPB) found that the big banks are still scamming their customers with ridiculous fees that are hugely profitable for the big banks.
Three years ago the government required banks to ask their customers if it is okay (this is called “opt-in”) before they charge them for “overdraft protection” service. CFRB has been studying how this is working out, and its report shows that customers who do not opt-in to this heavily marketed “protection” service pay much, much less in fees than those who do. In other words, agreeing to use the “protection” actually puts you at a much greater risk of incurring expenses than those who are not “protected.”

According to a McClatchy News report (http://www.mcclatchydc.com/2013/06/11/193528/banks-profiting-from-overdraft.html#.Ubj8CvlwrSg) [5] on a call with CFPB director Richard Cordray to discuss the report, Cordray said, "What is marketed as overdraft protection can, in some instances, put consumers at greater risk of harm.”
How much risk? People who are “heavy overdrafters” but still opt out of this service save on average more than $900 a year. But it isn’t just heavy overdrafters who are saving. According to the CFPB report “… the reduction in fees for those who did not opt in was $347 greater, on average, than for those who did opt in.” People who opt in are also more likely to lose their bank accounts, with the bank “involuntarily” closing it.
Banks have made $32 billion from these fees. So maybe this isn’t about providing a “protection” to consumers at all. As NPR puts it (http://www.npr.org/blogs/thetwo-way/2013/06/11/190671281/report-overdraft-protection-puts-customers-at-greater-risk) [6], "Overdraft and non-sufficient funds fees accounted for 61 percent of total consumer deposit account service charges in 2011 among the banks in the CFPB report."

3. Transaction Ordering

Not only do customers who opt-in pay more for this “protection service,” but the banks are still scamming them by causing the overdrafts that generate these fees. The CFPB report says that some banks still use “transaction ordering” to cheat customers out of additional fees. These banks post checks or debit transactions from large to small to trigger these fees. In other words if you write several small checks (or make debit card transactions) and then a big one that overdraws your account, they credit the large one first so each of the smaller transactions causes its own fee to be charged, even though those transactions occurred before the account ran out of money.
From the report, “The earlier in a sequence that an account becomes negative, the more overdraft or NSF transactions may occur.”

4. Forced Arbitration

Another big-bank scam on consumers is “forced arbitration” clauses in bank account, credit card, mortgage and other financial-service agreements. Forced arbitration clauses – also called mandatory arbitration or binding arbitration – require you to give up your legal right to take a big bank to court if it cheats or harms you. And if you don’t agree (which requires reading the entire agreement) you can’t get the account.

They way this works is that instead of being able to pursue your legal rights, you have to take your complaint to an arbitrator, and then must accept the arbitrator’s decision. The catch is that the bank gets to pick the arbitrator, and the arbitrators naturally know they’ll never work in this town again if they ever rule against the banks. So there is an inherent conflict of interest working in favor of these companies.

How is that conflict of interest working out for us? A 2007 Public Citizen report revealed that arbitrators working for the National Arbitration Forum (NAF) had ruled against consumers 94 percent of the time.
In another blow to the big banks, the CFPB is beginning to take steps to reign in forced arbitration clauses in consumer financial contracts.

The five-year-old Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the CFPB and the Securities and Exchange Commission to regulate mandatory arbitration. The SEC is resisting implementing their part of this law, but the CFPB is conducting a survey to determine consumer awareness of forced arbitration clauses in credit card agreements. On its blog (http://www.consumerfinance.gov/blog/help-us-design-a-consumer-survey-about-mandatory-pre-dispute-arbitration/) [7], the CFPB said the study will “explore consumer awareness of dispute resolution terms in credit card agreements. The survey will gather information about consumers’ perceptions, preferences, and assumptions related to arbitration proceedings.”

5. Marketing Refinancing That Costs People

Thom Hartmann has exposed (http://www.alternet.org/bank-america) [8] yet another banker scheme. This time banks are marketing a mortgage refinancing that promises annual savings of more than $4,000. But the scheme really just adds more than $37,000 to the cost of a loan.
Basically, the mailer focuses on lowering monthly mortgage payments, while neglecting to mention that the borrower would end up paying a higher overall interest rate, and would be adding 10 more years to the overall length of their loan. Hartmann writes (http://www.alternet.org/bank-america) [8],

Back in November of 2012 (http://www.consumerfinance.gov/pressreleases/consumer-financial-protection-bureau-warns-companies-against-misleading-consumers-with-false-mortgage-advertisements/) [9], the Consumer Financial Protection Bureau sent warning letters to around a dozen of America’s largest mortgage lenders and brokers, advising them to “clean up” potentially misleading advertisements, especially those targeting veterans and older Americans.

At the time of the CFPB’s announcement, CFPB director Richard Cordray said that, “Misrepresentations in mortgage products can deprive consumers of important information while making one of the biggest financial decisions of their lives.”


And, as we also know, deceptive mortgage advertisements like this can cause consumers to bite off more than they can chew, ultimately leading to a nationwide financial meltdown.

6. Banks Trying To Kill the CFPB

Over the years, scam after scam is exposed, and nothing has been done about it. But there is a new cop on the beat, the Consumer Financial Protection Bureau. The CFPB’s job is to police the big banks, and protect financial consumers. Of course the big banks are trying to head this agency off at the pass.

The Republican Party and its conservative infrastructure have basically been contracted by Wall Street’s big banks to obstruct and even kill this agency. Senate Republicans have been blocking the confirmation and are still trying to obstruct the nominee to head up the agency. Republicans have been filibustering the nomination of Richard Cordray to be its director and even vowing to filibuster to keep any nominee from being confirmed to head the agency. President Obama finally made a recess appointment (http://www.nytimes.com/2012/01/05/us/politics/richard-cordray-named-consumer-chief-in-recess-appointment.html?pagewanted=all&_r=0) [10] of Cordray in January 2012. But this recess appointment runs out at the end of the year with no end to Republican obstruction in sight.

Republicans are also trying to defund (http://www.huffingtonpost.com/2013/01/31/recess-appointment-ruling_n_2593330.html?ref=topbar) [11] the agency. Republicans and the (billionaire, Wall Street, oil and tobacco-financed) conservative movement have also launched a propaganda campaign against the agency. Recently, at the Senate Republican Policy Committee website, "CFPB: Unaccountable and Unrestrained," claims, “A recent action by the CFPB to monitor consumer credit cards and the spending habits of millions of Americans is raising new concerns in a government suffering from a trust deficit.” In an example of how the right’s echo machine works, the Heritage Foundation echoes this attack, alleging that CFPB gathering data for reports like this one is an example of government “surveillance” on consumers, “amassing an Orwell-worthy database on all manner of spending, including … overdrafts …”

http://www.alternet.org/corporate-accountability-and-workplace/bank-scam?paging=off

[boutons_deux]

Lawsuit Reveals Wall Street Banks Lied Because They Couldn’t Prove Ownership (http://news.firedoglake.com/2013/08/13/lawsuit-reveals-wall-street-banks-lied-because-they-couldnt-prove-ownership/)

The unsealing of a lawsuit has let a major cat out of the bag vis-à-vis the housing crisis. Many wondered why the banks were engaging in fraudclosure or the creation of fraudulent documents to foreclose on homeowners. There were various speculations but thanks to FDL alum David Dayen (http://www.salon.com/2013/08/12/your_mortgage_documents_are_fake/)one of the theories just got a lot more weight – the banks made up documents because they could not establish legitimate ownership.


If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)

A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.


So much for property rights. Was not the entire point of free market capitalism to establish clear lines of ownership? In other words, if a person claimed to own something, then that person should be able go to court and prove it.

Otherwise the entire system doesn’t work, right?

It is an amazing and tragic admission of the asymmetries of power in America that Wall Street has been able to snatch millions of homes from middle class and poor Americans despite not being able to establish legitimate ownership.

The system is against them.


Most of official Washington, including President Obama, wants to wind down mortgage giants Fannie Mae and Freddie Mac, and return to a system where private lenders create securitization trusts, packaging pools of loans and selling them to investors. Government would provide a limited guarantee to investors against catastrophic losses, but the private banks would make the securities, to generate more capital for home loans and expand homeownership.

That’s despite the evidence we now have that, the last time banks tried this, they ignored the law, failed to convey the mortgages and notes to the trusts, and ripped off investors trying to cover their tracks, to say nothing of how they violated the due process rights of homeowners and stole their homes with fake documents. The very same banks that created this criminal enterprise and legal quagmire would be in control again.


Obama’s plan is to run the exact same program again and hope for different results. It would be insane if he actually cared about fixing the housing market, but the reality is the Obama Administration has always seen its real constituents as the banksters not the public at large, which is an unsurprising result of stacking the government with Wall Street bootlickers. (http://news.firedoglake.com/2013/03/28/after-sabotaging-wall-street-prosecutions-lanny-breuer-will-return-from-whence-he-came-wall-street/)

The truth is, this has nothing to do with the law. Wall Street is well above it. This is a struggle for power and whether Wall Street will continue to call the shots while suffocating the country into debt slavery. Power is a zero sum game, for the public to win the banks must lose.

http://news.firedoglake.com/2013/08/13/lawsuit-reveals-wall-street-banks-lied-because-they-couldnt-prove-ownership/

[TDMVPDPOY]

you guys do know when you sign that slave contract away to the bank, if the banks do get into a "going concern" position to be trading insolvent/bankrupt, they can do "call-ups" of outstanding mortgages right? yet you never hear these fuckers calling up their shareholders for capital injection.....

[Winehole23]

there'd be a revolt if that happened

[boutons_deux]

you guys do know when you sign that slave contract away to the bank, if the banks do get into a "going concern" position to be trading insolvent/bankrupt, they can do "call-ups" of outstanding mortgages right? yet you never hear these fuckers calling up their shareholders for capital injection.....

as we saw in Greece, tactics that were approved/recommended in Europe and USA for their banks, banks in trouble can increase their capital simply by confiscating/stealing from deposit accounts.

[boutons_deux]

The Real Foreclosure Scandal: Why Have Virtually No Lawyers Been Disbarred? (http://www.nakedcapitalism.com/2013/08/the-real-foreclosure-scandal-why-have-virtually-no-lawyers-been-disbarred.html)

Colorado’s two biggest foreclosure mills are under investigation the state attorney general. The Denver Post summarized the complaint (http://www.denverpost.com/realestatenews/ci_23833815/ag-lawyer-e-mails-indicate-collusion-control-foreclosure):

Because the firms for years controlled the bulk of the foreclosure work in Colorado, they could profit handsomely and easily on a state law requiring legal notices to be posted on homeowners’ properties by steering that work to companies they owned or had a heavy interest in.

Starting in 2009, Aronowitz and Castle created or bought into process-service companies that would handle their workload just as the legislature was to pass a law requiring the first of what would be a pair of legal-notice postings in a foreclosure.

The law firms allegedly leveraged their stranglehold on the foreclosure market — estimates are that they control about 90 percent of the cases filed in Colorado — and conspired to fix the price to post those notices at $125, an amount five times more than what other companies charged for the same service, investigators said in court papers that included e-mail exchanges between the two firms.

Then, when their plan proved so successful — one of the posting companies made more than $2 million in the first year — at least one of the law firms worked tirelessly to persuade legislators to change state laws in a way that doubled their profits overnight by requiring a second notice, investigators said documents indicate.

The legislation requiring the postings, investigators say, was offered under the guise that consumers were getting better disclosure. But it was the law firms’ principals who ultimately profited, earning nearly $20 million in revenues in the next four years just for having the notices posted.

Here is a typical report (from the Palm Beach Post (http://www.palmbeachpost.com/news/business/real-estate/foreclosure-mills-in-the-clear-state-closes-cases-/nSWQ5/)) from one of the ground zeros of foreclosure fraud, Florida, in October 2012, a full two years after the robosigning scandal broke:


Florida’s attorney general has closed a high-profile investigation into alleged wrongdoing by the state’s largest foreclosure law firms with no findings..

A February Florida Supreme Court decision that upheld a ban on the state from investigating the firms under the Florida Deceptive and Unfair Trade Practices Act was the real decider, attorney general communications director Jennifer Meale said Friday…

The Florida Bar has maintained it only has the power to investigate individual attorneys. As of mid-August, 149 cases of attorney-related foreclosure fraud had been investigated by the Florida Bar with no disciplinary actions taken. There were 171 cases pending at that time.


Translation: The state AG wanted to go after the foreclosure mills. The state bar association barred that action and has proceeded to clear the attorneys. If in a state like Florida they’ve looked at 149 cases and found nothing wrong, they are going to find nothing wrong.

And why does this occur? State bar associations, once you pass the bar exam, are not professional organizations. They are social clubs. The large, high billing firms contribute to the bar association and in many cases have firm partners involved in various bar committees. Think someone in the bar is going to act against a colleague that he knows socially and who gives his club a lot of money? As candid lawyers who will tell you, the lawyers who get sanctioned are small fry, usually sole practitioners. By contrast, the foreclosure mills, which had such insane leverage ratios that those alone would show they were not maintaining work standards (one attorney to 40 to as many as 100 paralegals) were hugely profitable machines. It’s almost a given that they had the survival skills to make sure they were generous with the state bar association so as to deter any hard looks at what they were doing.


etc etc

http://www.nakedcapitalism.com/2013/08/the-real-foreclosure-scandal-why-have-virtually-no-lawyers-been-disbarred.html

[boutons_deux]

The Looming Burden For Underwater Homeowners That No One Is Talking About (http://thinkprogress.org/economy/2013/11/04/2887601/looming-burden-underwater-homeowners-talking/)


Since the start of our housing crisis, struggling homeowners have had few places to turn for relief. Now, thanks to settlements between the federal government and banks and mortgage servicers, some borrowers will be able to get relief from their massive debt and unaffordable mortgage payments. But if Congress fails to act by the end of this year, many struggling homeowners who get this relief will face a new problem: a huge tax bill.

At issue is whether underwater homeowners — those who owe more on their mortgage than their home is worth — should be taxed on mortgage debt that their lenders agree to forgive. Since the passage of the ‘Mortgage Debt Forgiveness Relief Act’ (http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation-) in 2007, homeowners haven’t been taxed on this debt. But starting January 1, forgiven debt will again become taxable, imposing huge penalties. For example, an underwater homeowner who earns $40,000 a year and is able to receive $100,000 in debt relief would see her taxes balloon to nearly three-quarters (http://www.newrepublic.com/article/115382/jpmorgans-mortgage-penalty-could-be-huge-blow-homeowners) of her income.

Both short sales, where underwater homeowners are allowed to sell their homes for less than they owe on their mortgages, and principal reductions, where a lender agrees to reduce the amount of money a homeowner owes on a mortgage, will be rendered essentially useless if forgiven debt is taxed. As a result, underwater homeowners have even fewer options to escape their debt, communities will suffer from more foreclosures, and banks and investors will lose access to tools that limit their losses on mortgages.

Additional urgency comes from the pending settlement over mortgage practices between JP Morgan and the Justice Department, which is rumored to contain $4 billion (http://www.bloomberg.com/news/2013-10-19/jpmorgan-said-to-have-reached-13-billion-u-s-accord.html) in homeowner relief. But if Congress fails to exempt this relief from taxation, much of it will be of little help to homeowners.

http://thinkprogress.org/economy/2013/11/04/2887601/looming-burden-underwater-homeowners-talking/

I expect House Repugs will block this, too. Why not? it's ALL the motherfuckers do.

[Winehole23]

The U.S. government urged that Bank of America Corp pay $863.6 million in damages after a federal jury found it liable for fraud over defective mortgages sold by its Countrywide unit.

In a filing late Friday in the U.S. District Court in Manhattan, the government also asked for penalties against Rebecca Mairone, a former midlevel executive at the bank's Countrywide unit who the jury also found liable, "commensurate with her ability to pay."

The government said the penalties were necessary to punish the bank and Mairone "and to send a clear and unambiguous message that mortgage fraud for profit will not be tolerated."

Bank of America and Mairone were each found liable for defrauding government-controlled mortgage companies Fannie Mae and Freddie Mac through the sale of shoddy loans purchased from Countrywide in 2007 and 2008.

The case centered on a mortgage lending process at Countrywide, which Bank of America bought in July 2008, known as the "High Speed Swim Lane," or alternatively "HSSL" or "Hustle."

The government said Countrywide's program emphasized and rewarded employees for the quantity rather than the quality of loans produced, and eliminated checkpoints designed to ensure that loans were sound.http://www.chicagotribune.com/business/sns-rt-us-bankofamerica-hustle-20131109,0,5110794.story

[boutons_deux]

L.A. sues Wells Fargo and Citigroup, alleging predatory lending



The city of Los Angeles accused banking giants Wells Fargo & Co. and Citigroup Inc. of a “continuous pattern and practice” of mortgage discrimination that led to a wave of foreclosures, reduced property tax revenue and increased costs for city services.

In twin lawsuits filed in U.S. District Court, the city alleged that both banks engaged in predatory lending practices and redlining that saddled minorities with loans they couldn’t afford and resulted in a disproportionately high number of foreclosures in their neighborhoods compared with white neighborhoods.

“Today we begin to address the devastating consequences of the foreclosure crisis in America's second-largest city,” Los Angeles City Atty. Mike Feuer said late Thursday in announcing the actions.
The suits, he said, send “the firm message that we will use every tool at our disposal to fight for all Los Angeles taxpayers and neighborhoods."

Both banks released statements calling the suits “baseless” and “without merit.” Wells Fargo, the nation’s biggest mortgage lender, said it was proud of its record “as a fair and responsible lender.” Citi said its lending standards are “fair to all” and its lending criteria are “blind to race, ethnicity, gender and any other prohibited basis.”

The suits cited reports from two advocacy groups for low-income and minority neighborhoods that claimed the mortgage crisis resulted in more than 200,000 foreclosures in Los Angeles from 2008 through 2012 and, in turn, in depressed property values, leading to an estimated loss of $481 million in tax revenue for the city.

In addition, the local government costs for safety inspections, police and fire calls, trash removal and property maintenance of all foreclosed L.A. houses has hit $1.2 billion, according to the California Reinvestment Coalition and the Alliance of Californians for Community Empowerment.

The suits, which do not specify the amount of damages sought, alleged that the banks’ predatory lending and redlining started in at least 2004 and still continues.

Los Angeles is seeking damages based on the reduced property tax revenue of foreclosed properties caused by the alleged discriminatory lending and for the increased costs for city services on those properties.

http://touch.latimes.com/#section/5/article/p2p-78451161/

[TDMVPDPOY]

predatory lending is the only reason the banks, stakeholders and Investment Property investors continue to let the engine running cause they are the only ones benefiting from all this activity, govt wont let it fail or intervene to stop such measures, cause too much is already invested into it....but fck the govt why should they be concern about it when they are not obligated to bail them out if shit hits the fan....

[Winehole23]

Judge Jed S. Rakoff in NY Review of Books: http://www.nybooks.com/articles/archives/2014/jan/09/financial-crisis-why-no-executive-prosecutions/

related:

http://www.spurstalk.com/forums/showthread.php?t=161185
http://www.spurstalk.com/forums/showthread.php?t=135008
(http://www.spurstalk.com/forums/showthread.php?t=135008)http://www.spurstalk.com/forums/showthread.php?t=132807
http://www.spurstalk.com/forums/showthread.php?t=150055&page=2&p=5467724&viewfull=1#post5467724

[Winehole23]

HELOCS originating in 2004 reset next year. The peak years for HELOCs were 2006-7, 40% of all HELOCs originated in California.

http://advisorperspectives.com/dshort/guest/Keith-Jurow-131216-HELOC-Resets.php

[Winehole23]

Wall Street could pay nearly $50 billion to buy peace from federal authorities who are taking aim at the banks over their role in the mortgage crisis, according to interviews and a confidential analysis of the industry’s potential legal exposure.


Bracing for a potential reckoning, the banks and their outside lawyers are quietly using JPMorgan Chase (http://dealbook.on.nytimes.com/public/overview?symbol=JPM&inline=nyt-org)’s record $13 billion mortgage settlement in November to do the math and determine just how much each bank might have to pay to move beyond the torrent of government mortgage litigation that has dogged them since the financial crisis. Such calculations, people briefed on the matter said, have gained particular urgency among the banks’ board members.


If the settlements materialize, they could yield, according to the analysis, $15 billion in relief for consumers — a mixture of cash payments and other assistance, like reductions in the size of homeowners’ loan payments. A payment of $50 billion, made up of a string of separate deals, would amount to roughly half the total annual profit of large American banks in 2012. The $50 billion figure does not include JPMorgan’s $13 billion payout, which means the ultimate industry tab could exceed $60 billion, according to the analysis.

http://dealbook.nytimes.com/2014/01/09/wall-street-predicts-50-billion-bill-to-settle-u-s-mortgage-suits/?_r=0

[boutons_deux]

Elizabeth Warren Introduces Bill To Expose ‘Sweetheart Deals’ For Corporations

Senator Elizabeth Warren (D-MA) rose to the floor of the Senate on Thursday morning to introduce the Truth in Settlements Act, which is co-sponsored by Senator Tom Coburn (R-OK).

“Several years ago the government announced a $385 million settlement with Fresenius Medical Care for allegedly defrauding Medicare and other health programs for years,” Warren said.

“When the agreement was originally announced, the Justice Department touted the sticker price as the agency’s largest civil recovery to date in a health care fraud case. But the DOJ didn’t say a word about the tax treatment. The agency’s failure to even consider that issue was a very costly mistake. By the time the company finished claiming all its tax deductions from the settlement, it ended up paying $100 million less than originally advertised. In other words, the taxpayers picked up more than a quarter of the tab.”

The senator also compared a settlement last year between Wells Fargo and the Federal Housing Finance agency for $335 million in fraudulent sales to Fannie Mae and Freddie Mac, which was about 6 percent of what JPMorgan paid to the same agency for a similar claim.

What was the difference in the two settlements?

“Well, we’ll never know because the JPMorgan settlement is public. But the much smaller Wells Fargo settlement is confidential.”

The bill implements (http://www.warren.senate.gov/files/documents/Truth%20In%20Settlements%20Bill.pdf) several requirements on settlements made in disputes that are not being litigated, including a requirement (http://elizabethwarren.com/blog/settlementsact) that the government offer a rationale whenever an agreement is kept confidential.

http://www.nationalmemo.com/watch-elizabeth-warren-introduces-bill-to-expose-sweetheart-deals-for-corporations/

[Winehole23]

CFPB: mortgage reinsurance kickbacks:


Enforcement Action
Today’s Notice alleges that PHH used mortgage reinsurance arrangements to solicit and collect illegal kickback payments and unearned fees – through its affiliates Atrium Insurance Corporation and Atrium Reinsurance Corporation – in exchange for the referral of private mortgage insurance business. The Bureau believes that from the start of the arrangements, and continuing into at least 2009, PHH manipulated its allocation of mortgage insurance business to maximize kickback reinsurance payments for itself. PHH Corporation and its affiliates are specifically accused of:



Kickbacks: Over the approximately 15-year scheme, the CFPB alleges that PHH set up a system whereby it received as much as 40 percent of the premiums that consumers paid to mortgage insurers, collecting hundreds of millions of dollars in kickbacks;



Overcharging Loans: In some cases, PHH charged more money for loans to consumers who did not buy mortgage insurance from one of its kickback partners. In general, they charged these consumers additional percentage points on their loans; and



Creating Higher-Priced Insurance: PHH pressured mortgage insurers to “purchase” its reinsurance with the understanding or agreement that the insurers would then receive borrower referrals from PHH. PHH continued to steer business to its mortgage insurance partners even when it knew the prices its partners charged were higher than competitors’ prices.

A Notice of Charges initiates proceedings in an administrative forum (http://www.consumerfinance.gov/administrativeadjudication/), and is similar to a complaint filed in federal court. This case will be tried by an Administrative Law Judge from the Bureau’s Office of Administrative Adjudication, an independent adjudicatory office within the Bureau. The Administrative Law Judge will hold hearings and make a recommended decision regarding the charges, which may be appealed to the Director of the CFPB for a final decision.



http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-phh-corporation-for-mortgage-insurance-kickbacks/

[boutons_deux]

Here We Go Again!

Home equity credit lines see a resurgence

One of the mortgage products that contributed to the housing crash is booming again: New home equity credit line borrowings soared 42% in the final three months of 2013 and were up sharply for the entire year, to $111 billion.

But does this point to a return to the "my house is an ATM" mentality that characterized excessive home equity borrowing from 2004 through 2007, just before the crash? Should consumers — and the banks doling out the cash — be cautious about this trend?

Researchers at Experian Information Solutions estimate that originations of home equity lines of credit — HELOCs, in mortgage industry shorthand — rose 58% in the final quarter of last year in the Western states, 38% in the Northeast and 36% in the Midwest.

The average line of credit for new borrowers with "super-prime" VantageScores (781 to 850) was $120,000. VantageScores are one of the two main types of risk-evaluation scores used by lenders. More ominously, new equity credit lines extended to owners with "deep subprime" scores (300 to 499) increased faster than in previous years and averaged more than $60,000, roughly triple the amounts in late 2010. On the other hand, according to researchers, serious delinquencies in outstanding HELOCs continued to be
low, generally well under 1%.

What's behind the equity credit line eruption? A record-fast rebound in owners' equity holdings tied to rising home prices is one key. Between the third quarter of 2012 and the same period last year, Americans' real estate equity expanded by $2.2 trillion, according to the Federal Reserve. That growth is offering owners more options to tap their real estate wealth to fund home renovations, tuition payments, auto purchases and a variety of other consumer expenditures.

Banks are also pushing equity line products. Mike Kinane, senior vice president of TD Bank, said that home equity lines are providing a money-saving alternative to refinancing in a rising interest rate environment. With rates that are currently well below those quoted for fixed-rate 30-year mortgages, tapping "home equity looks attractive" to growing numbers of owners. TD Bank's equity line rates go as low as 2.75% (prime bank rate minus half a percentage point) for qualified applicants.

Lenders I interviewed for this column, however, insisted that the rapid rise in new equity lines is different this time around, under much tighter controls. Cindy Balser, senior vice president of consumer credit products for Key Bank in Cleveland, says underwriting in 2014 is more intensive than it was a decade ago. Not only are credit limits more restrained — generally held to 80% of the home value, counting both the first and second mortgages against the property — but banks like hers require full appraisals or property condition reports by licensed appraisers to supplement electronically derived valuations.

But even with tighter controls, bankers and lending industry analysts acknowledge, there are potential downsides. Competition is encouraging some lenders to push their limits for combined first and second mortgage debt to 90% of home value or higher. That's risky for them and for borrowers who could find themselves underwater in the event of another economic downturn.

Also, warns Amy Crews Cutts, chief economist for Equifax, today's enticing interest rates are likely to increase. Since equity credit lines typically carry floating rates, borrowers could eventually find themselves paying much more every month than they ever anticipated.

Here's what else to watch for if you're thinking of jumping on the equity line bandwagon:

•"Teaser" rates. These short-term discounts on new credit lines may beguile you, but they are simply borrower bait. Focus on the index your credit line rate will be based on and the size of the "margin" tacked on by the bank. Run scenarios of what you might be paying if the index increases.

•Option to lock. Look for credit lines that come with an option to switch to a fixed rate if you choose. If your variable rate starts to take off sharply in future years, this will be a way to lock in your rate before things spiral out of control.

•Read the fine print. Credit lines can be complicated — your maximum draw can be limited or the entire line frozen under certain conditions. Your early payments may be interest-only, but they'll switch to full amortization at some point. You should understand all the features of your credit line before signing up.

http://touch.latimes.com/#section/1780/article/p2p-79468304/

[Winehole23]

Government Admits It Is Going Easy On Fraudsters The Inspector General of the Department of Justice just issued a report (http://www.justice.gov/oig/reports/2014/a1412.pdf) slamming DOJ’s prosecution of mortgage fraud.


Initially, the report found that – despite talking a good game about going after mortgage fraud – the Department of Justice and its subsidiary, the FBI, placed a very low priority on mortgage fraud:

DOJ and its components have repeatedly stated publicly that mortgage fraud is a high priority and during this audit we found some examples of DOJ-led efforts that supported those claims. Two such examples are the Criminal Division’s leadership of its mortgage fraud working group and the FBI and USAOs’ participation on more than 90 local task forces and working groups. However, we also determined during this audit that DOJ did not uniformly ensure that mortgage fraud was prioritized at a level commensurate with its public statements. For example, the Federal Bureau of Investigation (FBI) Criminal Investigative Division ranked mortgage fraud as the lowest ranked criminal threat in its lowest crime category. Additionally, we found mortgage fraud to be a low priority, or not listed as a priority, for the FBI Field Offices we visited, including Baltimore, Los Angeles, Miami, and New York.
In addition, the Inspector General found that funds earmarked for mortgage fraud went to other activities:

We also found that while the FBI received $196 million in appropriated funding to investigate mortgage fraud activities from fiscal years 2009 through 2011, in FY 2011 the number of FBI agents investigating mortgage fraud as well as the number of pending investigations decreased.
The report slams the Department of Justice for wildly inflating the number of prosecutions and the amount of taxpayer losses involved:

During this press conference, the Attorney General announced that the initiative resulted in 530 criminal defendants being charged, including 172 executives, in 285 criminal indictments or informations filed in federal courts throughout the United States during the previous 12 months. The Attorney General also announced that 110 federal civil cases were filed against over 150 defendants for losses totaling at least $37 million, and involving more than 15,000 victims. According to statements made at the press conference, these cases involved more than 73,000 homeowner victims and total losses estimated at more than $1 billion.


Shortly after this press conference, we requested documentation that supported the statistics presented. In November 2012, in response to our request, DOJ officials informed us that shortly after the press conference concluded they became concerned with the accuracy of the statistics. Based on a review of the case list that was the basis for the figures, the then-Executive Director of the FFETF told us that numerous significant errors and inaccuracies existed with the information. For example, multiple cases were included in the reported statistics that were not distressed homeowner-related fraud. Also, a significant number of the included cases were brought prior to the FY 2012 timeframe.


Over the following months, we repeatedly asked the Department about its efforts to correct the statistics. We learned that, on August 9, 2013, the FBI provided a memorandum to the FFETF concluding that several of the statistics announced during the October 2012 press conference were substantially overstated. Specifically, the number of criminal defendants charged as part of the initiative was 107, not 530 as originally reported; and the total estimated losses associated with true Distressed Homeowners cases were $95 million, 91 percent less than the $1 billion reported at the October 2012 press conference. The Department’s October 9, 2012, press release and the press conference transcript of the Attorney General’s remarks, both available on the Department’s website, now include disclosures citing the inaccuracy of the originally reported statistics, and the language in each has revised wording and statistics based on the FBI’s August 2013 memorandum.


Despite being aware of the serious flaws in these statistics since at least November 2012, we found that the Department continued to cite them in mortgage fraud press releases that it issued in the ensuing 10 months. We believe the Department should not have continued to issue press releases with these statistics once it became aware of the serious flaws.


We also found that neither DOJ nor the FFETF had an established methodology for obtaining and verifying the criminal mortgage fraud statistics announced during the press conference on October 9, 2012. We found this process to be disturbing, and it led the Department to report inaccurate information to the public.


According to DOJ officials, the data collected and publicly announced for an earlier FFETF mortgage fraud initiative – Operation Stolen Dreams – also may have contained similar errors.According to these officials, a similar collection methodology was employed for the statistics publicly reported by the Department for this initiative.
Here’s the conclusion of the report:

The FBI did not rank mortgage fraud among its highest ranked priority white collar crimes. We further found that, despite receiving significant additional funding from Congress to pursue mortgage fraud cases, the FBI in adding new staff did not always use these new positions to exclusively investigate mortgage fraud. Moreover, when we attempted to assess the effectiveness of the Department’s efforts in pursuing mortgage fraud cases, we found that DOJ could not provide readily verifiable data related to its criminal and civil enforcement efforts. The DOJ’s release of significantly flawed information at a highly publicized press conference in October 2012 regarding the purported success of the FFETF’s and the DOJ’s recent mortgage fraud initiative reflects the lack of accurate data maintained by the Department regarding its mortgage fraud efforts, as well as the Department’s serious failure to adequately vet information that it was presenting to the public. Only days after the press conference the Department had serious concerns over the accuracy of the reported statistics, yet it was not until August 2013 when the Department informed the public that the October 2012 reported statistics were indeed flawed. Moreover, during those 10 months, the Department continued to issue press releases publicizing statistics it knew were seriously flawed. We believe the Department should have been more forthright at a much earlier date about this flawed information.

http://www.washingtonsblog.com/2014/03/inspector-general-slams-fbi-department-justice-lack-prosecution-mortgage-fraud.html

[Winehole23]

by contrast, there were tens of thousands of criminal referrals and ~ 1000 felony convictions in the S&L scandal in the 1990s.

[Winehole23]

Wells Fargo, the nation’s biggest mortgage servicer, appears to have set up detailed internal procedures to fabricate foreclosure papers on demand, according to allegations in papers filed Tuesday in a New York federal court.


In a filing in New York’s Southern District in White Plains for a local homeowner in bankruptcy, attorney Linda Tirelli described a 150-page Wells Fargo Foreclosure Attorney Procedures Manual created November 9, 2011 and updated February 24, 2012. According to court papers, the Manual details “a procedure for processing [mortgage] notes without endorsements and obtaining endorsements and allonges.”


Those are the technical terms for the paperwork proving that the company that’s foreclosing owns the loan, and therefore has the right to kick a family out of its home. Wells Fargo services roughly 9 million home loans, according to Inside Mortgage Finance.
A Wells Fargo spokesman denied that the manual could be used to order improper documents. “No note is endorsed without the proper authority,” he said. “Wells Fargo’s foreclosure processes—today and back in 2012—are legal [and] appropriate.”


Attorneys, forensic accountants and consumer advocates have long suspected that banks were systematically creating improper documents to prove ownership of loans. Foreclosure defense lawyers use the term ‘ta-da’ endorsement to describe situations in which they say a document appears, as if by magic, in the bank’s possession as needed in a foreclosure case—even though the proper endorsement was not included in the original foreclosure filing. It might sound like a technicality, but correct proof of ownership lies at the heart of the foreclosure crisis for securitized loans, which were sold by the lender that originally issued the mortgage. To legally transfer a securitized loan, the endorsements and allonges have to be created in a very specific way and within a specific time frame, usually 90 days after a residential mortgage trust closes. For many loans in foreclosure now, which were originated years ago and then sold, it’s way too late to correct incomplete documents, experts said.


If the allegations in Tirelli’s court filing are true, this manual represents the first time ‘ta-da’ endorsements are “being described and admitted to be a procedure” at a major bank, as Tirelli claimed to The Post.

http://nypost.com/2014/03/12/wells-fargo-made-up-on-demand-foreclosure-papers-plan-court-filing-charges/

[Winehole23]

Matt Taibbi previews his new book, "The Divide: American Injustice in the Age of the Wealth Gap," on Democracy Now.

The interview is long, but gives a good overview of the Too Big To Fail doctrine, the financial bailout and the impunity of great wealth.

http://www.alternet.org/books/matt-taibbi-superrich-america-have-become-untouchables-america-who-dont-go-prison?page=0%2C8&paging=off&current_page=1#bookmark

[boutons_deux]

Matt Taibbi previews his new book, "The Divide: American Injustice in the Age of the Wealth Gap," on Democracy Now.

The interview is long, but gives a good overview of the Too Big To Fail doctrine, the financial bailout and the impunity of great wealth.

http://www.alternet.org/books/matt-taibbi-superrich-america-have-become-untouchables-america-who-dont-go-prison?page=0%2C8&paging=off&current_page=1#bookmark

http://www.alternet.org/files/styles/large/public/matt_bors_1.png

[Winehole23]

lol Dr Pepper

[Winehole23]

love that shit

[Winehole23]

unduly proud of "mortgage reinsurance kickbacks,"

good night Austin,TX,



WH23

[boutons_deux]

Elizabeth Warren’s ‘A Fighting Chance’: An exclusive excerpt on the foreclosure crisis

By Senator Elizabeth Warren

BY LATE 2009, the mortgage crisis had prompted plenty of finger-pointing — and a lot of it was directed at the families losing their homes. Earlier in the year, when talk of writing down mortgages surfaced, a televised rant about “losers” went viral and was generally credited with sparking the Tea Party. Now everybody seemed to have a favorite story about a bus driver who bought an $800,000 home or somebody’s brother-in-law who flipped houses, made a fortune, and then lost it all when the music stopped.

It all seemed backward. It was as if people were saying:

“Oh, gosh, we can’t blame poor Mr. CEO Banker. He gets paid millions and millions of dollars because he’s really good at his job, so how was he supposed to know that his bank was about to collapse?”

And then they turned around and said:

“Hey, stupid homeowner! Why did you sign those confusing mortgage papers? Didn’t you know that your balloon payment would come due just the moment your job disappeared?”

The hypocrisy drove me nuts.

In fall 2009, Secretary Timothy Geithner invited people working on TARP oversight to a meeting. It was held in the Treasury Building in an incredibly fancy room that was loaded with historic furniture, rich draperies, and heavily framed paintings. It looked like a room for kings to negotiate over who was going to get what colony. The secretary and his aides sat on one side of a huge table. The rest of us lined up on the other side.

Secretary Geithner spoke quickly, often dropping his voice into a barely audible monotone, rushing ahead so fast that there was no room for interruptions. He was clearly smart and in command of the facts, but he didn’t offer many opportunities for questions. Maybe he was a little anxious. It probably wasn’t much fun to face more than half a dozen people whose job was to look over your shoulder and second-guess your decisions.

I tried not to fidget. But after we had listened to the secretary go on and on about his department’s cheery projections for recovery, I finally interrupted with a question about a new topic. Why, I asked, had Treasury’s response to the flood of foreclosures been so small? The Congressional Oversight Panel had been sharply critical of Treasury’s foreclosure plan. We thought that the program was poorly designed and poorly managed and provided little permanent help, and we worried that it would reach too few people to make any real difference. After the rush-rush-rush to bail out the big banks with giant buckets of money, this plan seemed designed to deliver foreclosure relief with all the urgency of putting out a forest fire with an eyedropper.

The secretary seemed annoyed by the interruption, but he quickly launched into a general discussion of his approach to dealing with foreclosures, rehashing the plan that the Congressional Oversight Panel had already reviewed. Next, he explained why Treasury’s efforts were perfectly adequate — no need to worry. Then he hit his key point: The banks could manage only so many foreclosures at a time, and Treasury wanted to slow down the pace so the banks wouldn’t be overwhelmed. And this was where the new foreclosure program came in: It was just big enough to “foam the runway” for them.

There it was:

The Treasury foreclosure program was intended to foam the runway to protect against a crash landing by the banks. Millions of people were getting tossed out on the street, but the secretary of the Treasury believed the government’s most important job was to provide a soft landing for the tender fannies of the banks.

I’VE NOW BEEN a US senator for a little more than a year. I’ve seen our Congress up close, and parts of it are truly dysfunctional. I’ve already lived through one government shutdown and too many Republican filibusters to count. Every day I wrestle with the same ruthless reality that I’ve known for many years: Change — real change — is hard. Uphill, grind-grind-grind, sweat-it-out hard.

Yes, change is hard, but it is possible — and that’s the part that fires me up.

Every day I think about the people I’ve met who are part of this battle. I remember their faces, their fears, their determination. Every one of them worries about our future. Every one of them has anxious days and sleepless nights. But every one of them is tough and resourceful. And every one of them — every single one of them — has a deep core of optimism that we can do better.
Equality. Opportunity. The pursuit of happiness. An America that builds something better for the next kid and the kid after that and the kid after that.

No one is asking for a handout. All we want is a country where everyone pays a fair share, a country where we build opportunities for all of us, a country where everyone plays by the same rules, and everyone is held accountable. And we have begun to fight for it.

Adapted from A Fighting Chance (http://www.amazon.com/exec/obidos/ASIN/1627790527/?tag=bostoncom-20) by Elizabeth Warren,

yep, Fed/Treasury, rapidly, continually revolving door with Wall St, bailed out the US/UK/EU financial sector, not the criminal victim of the US economy of the 99%.

[boutons_deux]

where is Geithner now?

"Warburg Pincus (http://topics.bloomberg.com/warburg-pincus/) LLC, the private-equity firm managing about $37 billion in assets, is considering investments in Africa and the Middle East (http://topics.bloomberg.com/middle-east/) as capital starts to flow back into emerging markets (http://topics.bloomberg.com/emerging-markets/).

Warburg Pincus, founded in 1966, owns stakes in more than 120 businesses and last year hired former U.S. Treasury secretary Timothy Geithner (http://topics.bloomberg.com/timothy-geithner/) as its president."

http://www.bloomberg.com/news/2014-04-08/warburg-pincus-to-buy-dubai-company-stake-in-middle-east-foray.html

[boutons_deux]

“Independent” Foreclosure Review Error Rate Vastly Higher Than Previously Admitted (http://www.nakedcapitalism.com/2014/04/independent-foreclosure-review-error-rate-vastly-higher-previously-admitted.html)


At this point, it seems hard to add insult to injury, given the terrible track record of the OCC Independent Foreclosure Reviews. But it’s nevertheless been done.

By way of background, in April 2010 the Office of the Comptroller and the Fed issued consent orders to 11 servicers (three more were added later). The orders mandated that borrowers who had had foreclosures that were pending or had completed foreclosure sales in 2009 and 2010 could request an investigation by independent reviewers, selected and paid for by the servicers but subject to approval by the OCC. It was clear from the outset, however, that this consent order process was never intended to help homeowners in a serious way, but was intended to give air cover for predatory servicers.

Even so, the foreclosure reviews turned out to be an embarrassing and costly fiasco. The investigation was halted abruptly, as more and more leaks showed that the foreclosure reviews were anything but “independent”. 11 servicers and the regulators hastily negotiated a settlement, with the authorities failing to identify any methodology for how the portion of the settlement allotted to cash awards, $3.3 billion, would be distributed to homeowners. It was predictable that the outcome would be that insultingly small checks would be distributed broadly to bolster claims of how many people has been recompensed, as if checks of a few hundred dollars on average was even remotely adequate restitution for the loss of one’s home.

Nevertheless, there had to be some sort of process put in place to distribute the piddling cash compensation, so the OCC set up a framework with various types of damage leading to stipulated levels of awards, with $125,000 the maximum. But this was all Through the Looking Glass logic. Since the foreclosure reviews had never been completed, how could anyone have the foggiest idea who deserved what? The only exceptions for those who got through the process early and servicemembers, who were treated with kid gloves. The death-of-a-thousand-unkind-cuts treatment continued with the Byzantine process of getting correct addresses to Rust Consulting, the firm in charge of sending the money, bounced checks and late mailings.

The abusive treatment of borrowers contrasted with how well the enablers made out. Across 11 servicers, the failed review-meisters pulled out $2 billion. Promontory, which mismanaged the reviews at Bank of America, Wells Fargo, and PNC pulled out a cool $930 million.

http://www.nakedcapitalism.com/2014/04/independent-foreclosure-review-error-rate-vastly-higher-previously-admitted.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

[boutons_deux]

What Problem Is Privatizing Fannie and Freddie Meant to Solve?

President Obama's chief economist, Jason Furman, weighed in (http://online.wsj.com/news/articles/SB10001424052702304279904579514121487642880?wpisrc =nl_wonk) behind efforts to privatize Fannie Mae and Freddie Mac last week. The main plan on the table is a bill put forward by Senators Tim Johnson and Mike Crapo, the chair and ranking member, respectively, on the Senate Finance Committee.

While Furman's column (which was co-authored with James Stock, another member of the president's Council of Economic Advisers) indicated support for the principles behind the Johnson-Crapo bill, it is not clear what problem they are hoping to solve.

At the moment, it seems Fannie Mae and Freddie Mac are doing their job just fine. They are issuing mortgage-backed securities (MBS) that include more than 60 percent of new mortgages. Interest rates on mortgages are low and both companies are making substantial profits which are refunded to the government. Why is there any need to overhaul this system?

The financial industry is of course unhappy with this situation. It sees the money being earned by Fannie Mae and Freddie Mac as money that could be going into its pockets. Of course there is nothing that prevents Goldman Sachs, Citigroup, and the rest from going out and issuing their own MBS right now.

The problem is that they have a really awful track record. Remember the financial crisis? And of course it is especially hard for them to compete with two relatively efficient government-run issuers like Fannie and Freddie.

Johnson-Crapo solves both problems for the industry. First, it shuts down Fannie Mae and Freddie Mac. This means Wall Street no longer has to worry about competing with them. But, Crapo-Johnson does more than just wipe out Wall Street's competition; it also allows banks to issue MBS that carry a government guarantee.

Under Johnson-Crapo, investors would have 90 percent of the price of a privately issued MBS guaranteed by the government. This means that no matter how much garbage Goldman Sachs or J.P. Morgan threw into an MBS, investors wouldn't have to worry about losing more than 10 percent of their investment. After an initial 10 percent loss, the taxpayers would be on the hook for the rest.

Proponents of Johnson-Crapo argue that the risk of losing 10 percent of their investment will ensure the quality of these MBS. Apparently these people are not old enough to remember back to the days of the housing bubble when investors gobbled up MBS issued by the Wall Street banks even though they could in principle lose 100 percent of their investment.

The moral hazard created by Johnson-Crapo, in which private banks get the profit and taxpayers get the risk, virtually guarantees the sort of abuses we saw during the housing bubble years. In fact, if we feel the need to get rid of Fannie Mae and Freddie Mac as government-run companies, it would make far more sense to just get the government out of the MBS market altogether.

The Wall Street boys will surely be able to figure out a way to provide credit for mortgages without the government holding their hands. They are able to do it now with the market for jumbo mortgages; if necessary we can send over some high school math majors to teach them to do it with the conventional mortgages handled by Fannie and Freddie.

It is worth challenging the idea that everything needs to be done by the private sector, even in cases where the government can do it more efficiently. This was the situation we faced back when President Bush wanted to privatize Social Security.

The privatizers derided Social Security as an old-fashioned one-size-fits-all model. The description is largely accurate, but that is exactly what we need in a system designed to provide workers with their core retirement income. According to the Bush administration's own estimates, the administrative costs of their privatized system would have been ten times as large as the administrative costs of Social Security.

We can tell the same story with Medicare compared with private issuers. The administrative costs of the Medicare system are 2-3 percent of what it pays out for health care. By contrast, the administrative costs of private insurers are 15-20 percent of annual payouts. In addition, providers face higher costs because of the office staff they need to hire to deal with an array of different insurance forms. Nonetheless, because of the political power of the insurance industry, the only way to extend health insurance coverage through the Affordable Care Act was to cut them in for a big piece of the action.

In principle, the power of inertia should work in favor of keeping Fannie and Freddie in place. However many of those who were opposed to privatizing Social Security have taken the side of the financial industry in this battle. At the least, it should be possible to block Wall Street's efforts to get a government guarantee for their new foray into the mortgage-backed securities market.

It is ironic that at a time when much of the liberal intelligentsia has become obsessed with Thomas Picketty's new book warning about ever greater concentrations of wealth and income, this huge giveaway to Wall Street could pass largely unnoticed. Of course no one ever expected much by way of serious thought from intellectuals.

http://truth-out.org/opinion/item/23349-what-problem-is-privatizing-fannie-and-freddie-meant-to-solve

[Winehole23]

the official review protected the targets instead of the victims:


The foreclosure review was supposed to uncover abuses in how the mortgage industry coped with the epic wave of foreclosures that swept the U.S. in the aftermath of the housing crash. In a deal with the Office of the Comptroller of the Currency and the Federal Reserve, more than a dozen companies, including major banks, agreed to hire independent auditors to comb through loan files, identify errors and award just compensation to people who'd been abused in the foreclosure process.


But in January 2013, amid mounting evidence that the entire process was compromised by bank interference and government mismanagement, regulators abruptly shut the program down. They replaced it with a nearly $10 billion legal settlement that satisfied almost no one. Borrowers received paltry payouts, with sums determined by the very banks they accused of making their lives hell.


Now, new evidence shows that had the reviews continued, they may have uncovered far more mistakes than regulators said were present when they scuttled the deal. If the program hadn't been shut down, aggrieved homeowners could've received another $1.5 billion in cash, according to a report from the Government Accountability Office (http://democrats.financialservices.house.gov/FinancialSvcsDemMedia/file/GAO%20Foreclosure%20Review%20RCSOITP.pdf) released Tuesday.


In a letter last week, Rep. Elijah Cummings (D-Md.) said an inquiry by his office had revealed "widespread and systematic foreclosure abuses" turned up by the auditors conducting the mortgage reviews. The letter was sent to Darrell Issa (R-Calif.), the chairman of the House Committee on Oversight and Government Reform.


Cummings specifically cited high error rates described in several reports issued by Promontory Financial, one of the auditing firms. In a May 2013 report, Promontory said that an audit of a small sample of Bank of America files revealed an error rate of 60 percent, Cummings said. These were mistakes made by the bank in its handling of mortgage modification applications, submitted by people hoping to avert a foreclosure.


In a separate report, Promontory said it found "borrower financial injury" in 21 percent of PNC Bank loans, according to the Cummings letter.



These numbers are vastly higher than the figure regulators gave when they cancelled the review program. At the time, regulators said they had detected an error rate of just 6.5 percent -- meaning the mortgage industry had made a mistake in handling about 1 in 20 foreclosures. The error rate is critical because it was almost certainly used by regulators when they were determining how much the mortgage companies should pay to settle abuse claims.


The Promontory documents have not been made publicly available. Officials at the Office of the Comptroller of the Currency and the Federal Reserve have declined to comment on the letter.


The Cummings letter offers the latest evidence that the government badly fumbled its best opportunity to learn the full scope of mortgage abuses that inflicted additional harm on already battered neighborhoods and almost certainly deepened the recession that gripped the U.S. in the wake of the financial collapse of 2008.


Untold thousands of people have complained that their lender fouled up their mortgage -- assessing bogus fees, losing applications for loan modifications and even pushing them into an unnecessary foreclosure. Nearly all the evidence that has come to light indicates that these errors were commonplace, and even intentional.


At Bank of America, employees have testified (http://www.propublica.org/article/bank-of-america-lied-to-homeowners-and-rewarded-foreclosures) that they lied to homeowners seeking loan modifications, denied their applications for invented reasons and were rewarded for pushing borrowers into foreclosure.


A 2012 study conducted by academics and regulators at both the Office of the Comptroller of the Currency and the Federal Reserve found that the mortgage industry had screwed up the modifications of more than 800,000 loans.

http://www.huffingtonpost.com/2014/04/29/bank-foreclosure-victims_n_5228275.html

[Winehole23]

the government knew Sallie Mae was cheating US service members and breaking the law, but renewed its five year contract anyway:


Federal investigators discovered evidence showing Sallie Mae cheated active-duty military service members on their federal student loans at least two months before the Department of Education told the company it planned to renew its lucrative contract to collect loan payments.


The evidence led officials to preliminarily conclude as early as August that Sallie Mae had allegedly violated the Servicemembers Civil Relief Act in servicing some federal student loans, according to people familiar with the probe. The law requires companies to reduce interest rates on student loans to no more than 6 percent upon request by service members called to active duty.


The revelation that some federal officials believed Sallie Mae violated the service members law by failing to allow active-duty soldiers to use critical protections for their federal student loans has prompted outrage among a bipartisan group of federal lawmakers. Student advocates are trying to use the findings to force the department to suspend ties with the company.


The timing of the discovery, not previously reported, raises new questions about the Education Department’s October decision (http://www.huffingtonpost.com/2013/11/29/education-department-sallie-mae_n_4351509.html) to reward Sallie Mae with a potential five-year extension of its existing contract to collect payments on federal student loans. The company’s contract (http://www2.ed.gov/policy/gen/leg/foia/contract/salliemae-061709.pdf) with the Education Department, which expires in June, requires it to comply at all times with all relevant federal laws in its pursuit of borrowers’ monthly payments on their federal student loans.

http://www.huffingtonpost.com/2014/04/28/sallie-mae-servicemembers_n_5229312.html

[Winehole23]

http://www.jennifertaub.com/books/other-peoples-houses/

[RandomGuy]

CFPB: mortgage reinsurance kickbacks:



http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-phh-corporation-for-mortgage-insurance-kickbacks/

ish.... interesting.

Thanks, I will have to devote a lunch hour to it at some point.

[boutons_deux]

Mortgage Companies Break The Law And Their Own Promises To Homeowners (http://thinkprogress.org/economy/2014/05/21/3440289/foreclosure-survey-california/)

Mortgage companies in California continue to routinely violate foreclosure laws (http://www.calreinvest.org/news/new-report-finds-ongoing-servicer-mistakes-push-homeowners-to-foreclosure) and go back on promises they made in legal settlements, according to housing counselors and advocates, despite new federal rules designed to stamp out lingering problems in the mortgage servicing industry.
Homeowner advocates “continue to report frustration with poor servicer responsiveness” in response to a survey (http://www.calreinvest.org/system/resources/W1siZiIsIjIwMTQvMDUvMTkvMjJfMjFfMDhfOTc1X0NSQ19SZX BvcnRfQ2hhc21fQmV0d2Vlbl9Xb3Jkc19hbmRfRGVlZHMucGRm Il1d/CRC%20Report%20Chasm%20Between%20Words%20and%20Dee ds.pdf) by the California Reinvestment Coalition (CRC). Mortgage servicers fail to provide a consistent contact person for caseworkers and homeowners, lose documents, ignore the timelines they are supposed to follow for responding to inquiries, and fail to process paperwork properly when a homeowner’s loan gets transferred from one company to another.

The survey is meant to capture the impact of new rules for mortgage servicers from the Consumer Financial Protection Bureau (CFPB), but most respondents say it’s too soon to tell how the new requirements are working. The CRC report says its respondents have seen a “moderate improvement in servicer practices,” but the counselors quoted in the report emphasize that new rules can only do so much without authorities following through with strict oversight of how the industry is responding. “Servicers have not changed their practices and will not unless there is auditing and enforcement,” one respondent to the CRC survey wrote.

The report also features nearly a dozen separate homeowner horror stories. Gemma and Cornelio Jaochico of Castro Valley followed every instruction they got from Wells Fargo in hopes of winning a loan modification after Gemma lost her job and their mortgage became untenable. The bank told the Jaochicos it would postpone the sale of their home while reviewing the modification request, but then sold the house out from under them and filed an eviction notice. The bank refused to revisit the modification application and even rejected the couple’s attempt to repay the full overdue amount after scraping funds together from family members. The Jaochicos ultimately lost their home in February of this year. Other foreclosure victims like Josefina Duenas held onto their homes, but only after years of stonewalling and paperwork deceptions drew homeowner advocates to file official complaints against the servicers.

The stories and survey findings from the CRC are in line with what other reports have found about the mortgage servicing business model (http://thinkprogress.org/economy/2014/02/04/3244811/mortgage-servicers-cfpb-report/). The official monitor for the National Mortgage Settlement that was supposed to clean up the industry found that banks continue to violate (http://thinkprogress.org/economy/2013/12/05/3023871/mortgage-settlement-violations/) the terms of that 2012 agreement. A CFPB review (http://files.consumerfinance.gov/f/201401_cfpb_supervision-highlights.pdf) of industry practices found that servicers frequently seek to intimidate borrowers who need modifications and routinely mishandle payments and paperwork that homeowners have made properly.

Evidence that mortgage servicers continue to flout the law in ways that cost people their homes shouldn’t be all that surprising. The industry’s paperwork problems have been building up for years, with loans frequently changing hands without all the proper documentation. Companies got so accustomed to doctoring the records in order to make deals appear legitimate that the largest mortgage servicer in the country even had a formal instruction manual (http://thinkprogress.org/economy/2014/03/13/3399511/wells-fargo-foreclosure-manual/) to teach employees how to gin up the document they needed to prove a sale or foreclosure was legal. Trillions of dollars worth of mortgages don’t have any legally valid owner (http://thinkprogress.org/economy/2013/08/13/2460891/new-fraud-evidence-shows-trillions-of-dollars-in-mortgages-have-no-owner/) thanks to the industry’s paperwork problems. But ineffectual enforcement efforts (http://thinkprogress.org/economy/2014/03/20/3417092/foreclosure-fraud-settlement-complete/) from the government have allowed companies to continue violating homeowners’ rights with near impunity.

http://thinkprogress.org/economy/2014/05/21/3440289/foreclosure-survey-california/

[Winehole23]

BofA to settle with DOJ for $12B:


Bank of America (http://quotes.wsj.com/BAC) Corp. BAC +1.13% (http://quotes.wsj.com/BAC) is in talks to pay at least $12 billion to settle civil probes by the Justice Department and a number of states into the bank's alleged handling of shoddy mortgages, an amount that could raise the government tab for the bank's precrisis conduct to more than $18 billion, according to people familiar with the negotiations.

At least $5 billion of that amount is expected to go toward consumer relief—consisting of help for homeowners in reducing principal amounts, reducing monthly payments and paying for blight removal in struggling neighborhoods, these people said. As the negotiations with the government heat up, the bank is being pressed to pay billions more than the $12 billion it is offering.

http://online.wsj.com/news/article_email/bofa-in-talks-to-pay-at-least-12-billion-to-settle-probes-1402006948-lMyQjAxMTA0MDAwNTEwNDUyWj

[boutons_deux]

I'd make the Fed cram back down the banks' throats all the toxic MBS it bought with QEx.

[Winehole23]

and in so doing, you'd wreck the US banking system. admittedly, it deserved to fall on its face.

problem there was, the political and social consequences would have been profound. misery, chaos, economic breakdown, probable martial law...a radical change in the status quo no doubt, but would that really have been preferable?

[boutons_deux]

and in so doing, you'd wreck the US banking system. admittedly, it deserved to fall on its face.

problem there was, the political and social consequences would have been profound. misery, chaos, economic breakdown, probable martial law...a radical change in the status quo no doubt, but would that really have been preferable?

The TBTF banks were bankrupt, should have been nationalized, investors take a haircut, TBTF broken up (esp separate insurance from investment banking from retail banking), the new banks severely regulated as to interest rates and fees. Could it have happened? hell no. Will the financial sector continue to create financial crises and fuck Human-Americans in every orifice? hell yes.

[Winehole23]

Citigroup settles mortgage fraud allegations for $7B:


Citigroup has agreed to pay $7 billion in a deal with the government for misleading investors about the riskiness of mortgage-backed securities sold in the run up to the 2008 financial crisis, the Justice Department announced Monday.

The deal marks another notch for a task force formed by President Barack Obama in 2012 to investigate whether major banks knew they were packaging shoddy loans into securities sold to investors, which included pension funds, local governments and other financial institutions.


The settlement struck with Citi follows several months of talks that at one point broke down over the size of the penalty and federal authorities last month were preparing to sue the bank before the negotiations got back on track.


Citigroup, which received $45 billion in taxpayer bailouts during the 2008 financial crisis, is one of the largest banks yet to be penalized by the task force. The fine includes a $4 billion civil penalty, which Attorney General Eric Holder said is the largest of its kind, and $2.5 billion for programs intended to help struggling borrowers.


“The penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi,” Holder said at a news conference on Monday. “Despite the fact that Citigroup learned of serious and widespread defects among the increasingly risky loans they were securitizing, the bank and its employees concealed these defects.”


Read more: http://www.politico.com/story/2014/07/citigroup-settles-subprime-mortgage-case-for-7b-108864.html#ixzz38DgEhN9P

[boutons_deux]

Mirable Dictu! Florida Activists Help Depose Terrible Foreclosure Judge (http://www.nakedcapitalism.com/2014/08/mirable-dictu-florida-activists-help-depose-terrible-foreclosure-judge.html)


Mr. Stopa: Judge, you acknowledged yourself, on multiple occasions, on the record, that, you know — Initially, you had multiple times where you said you were ruling for the defendant, and then you said if you didn’t, it would be reversed. I’m not arguing with you, but my point is that I think there are legitimate grounds to go to the Appellate Court, and before my client is divested of the property and a third party purchaser tries to buy it and, potentially, take possession, ultimately to potentially be removed, then a stay should be entered so that we can pursue our right on an appeal…

The Court: You’re welcome to do that.

Mr. Stopa: Can I submit you an Order that grants a stay?

The Court: No. Your stay is denied.

Mr. Stopa: On the issue of stay, can I ask for an explanation, or what have you, because, you know –

The Court: My job is to move cases.

Mr. Stopa: I’m sorry?

The Court: My job is to move cases and that’s what I’m doing.


Lewis basically embodied the concept that homeowners with arrears are automatically deadbeats, and that the actual procedures of law establishing property rights, existing for over 300 years in America, meant absolutely nothing. There’s not even the semblance of impartiality here; foreclosure cases simply move to final judgment by default. Not to mention that she was boorish, rude, and dismissive of people simply trying to have their day in court. Here are a series of testimonials (http://www.therobingroom.com/florida/Judge.aspx?id=1987) – the words “vile,” “despicable” and “disgrace” frequently crop up.


She said she suspects most of the complaints come from lawyers, like many of those in Ticktin’s office, who appear before her on foreclosure cases. Many are ill-trained, never having had the advantage of being mentored by older lawyers, she said.


This is a typical take from Lewis. The lawyers she harassed and demeaned in her courtroom every day simply had to be unqualified. But when so many lawyers have the same complaint, it’s obviously indicative of the problem.

The legal community across the state backed Ticktin, as did several (http://westbocanews.com/2014/08/15/we-endorse-jessica-ticktin-for-circuit-judge) editorial (http://articles.sun-sentinel.com/2014-08-14/news/fl-endorsements-palm-beach-judicial-20140814_1_bar-poll-incumbent-judge-second-chance) boards (http://www.mypalmbeachpost.com/news/news/editorial-rowe-linn-ticktin-bring-experience-demea/ngyHp/). “At some point in her current six-year term, incumbent Palm Beach County Circuit Court Judge Diana Lewis’ reputation for rudeness stopped being a forgivable quirk and became an embarrassment for the judiciary,” said the South Florida Sun-Sentinel. Activists, lawyers and ordinary Floridians donated money and time to Ticktin’s campaign (here’s an example (http://4closurefraud.org/2014/08/23/your-help-is-needed-palm-beach-county-jessica-ticktin-vs-diana-lewis-on-election-day-august-26th-vote-for-jessica-ticktin/)). I’m told that friends of the blog Lisa Epstein and Michael Redman stayed on their feet in the hot sun on Tuesday for several hours, encouraging voters to choose Ticktin over Lewis.

It paid off. Last Tuesday Ticktin defeated Lewis (http://results.enr.clarityelections.com/FL/Palm_Beach/52688/139169/en/summary.html) 54-46. My spies tell me that Judge Lewis was more peevish than usual on the bench the next day.

No matter; she won’t be there much longer.

http://www.nakedcapitalism.com/2014/08/mirable-dictu-florida-activists-help-depose-terrible-foreclosure-judge.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

[Winehole23]

we already knew Obama was shielding banks from accountability for one of the biggest ripoffs in history, but yesterday his administration finally admitted it:


A top Federal Reserve official admitted Friday that the U.S. government has worked to protect big banks from criminal prosecution due to the belief that such prosecution could harm the financial system, the Huffington Post (http://www.huffingtonpost.com/2014/11/21/fed-too-big-to-jail_n_6201476.html) reported.



U.S. government protection of big banks is a policy the Obama administration has adamantly denied, but during a Senate Banking Committee hearing on Friday, William Dudley, president of the Federal Reserve Bank of New York, candidly admitted to Sen. Sherrod Brown, D-Ohio, that the policy was indeed a reality.


Under the Obama administration, despite overwhelming evidence of wrongdoing, large financial organizations have avoided criminal prosecution for the following: laundering money for suspected terrorists and drug cartels, manipulating interest rate benchmarks, rigging various commodities markets, misleading investors in mortgage-linked securities, tricking homeowners into taking out expensive mortgages, manipulating municipal debt markets, and breaking state and federal rules when seizing homes from borrowers who were behind on their payments, according to the Huffington Post.http://www.hngn.com/articles/50472/20141122/obama-administration-shielded-banks-from-criminal-prosecution-admits-top-fed-official.htm

[boutons_deux]

we already knew Obama was shielding banks from accountability for one of the biggest ripoffs in history, but yesterday his administration finally admitted it:

http://www.hngn.com/articles/50472/20141122/obama-administration-shielded-banks-from-criminal-prosecution-admits-top-fed-official.htm

and there's no reversing, no stopping the govt collusion with the corrupt-to-core financial sector, always TBTF. TBTJ

[Winehole23]

governments and great fortunes fail. has happened in the past, will happen again.

nothing lasts forever, boutons. not even oligarchies.

[boutons_deux]

governments and great fortunes fail. has happened in the past, will happen again.

nothing lasts forever, boutons. not even oligarchies.

well duh, America can't remember shit from 20 minute ago, and they probably can't think forward much more than that any. Instant gratification rules. "living one day at a time" is no way to run a civilization

There are no positive signs, so I'd say America is fucked and unfuckable, and I'll grant you the qualification "for decades to come", and by then AGW will be wreaking unsurmountable havoc on water, food, coastal flooding all over the planet.

[Winehole23]

There are no positive signs, so I'd say America is fucked and unfuckableif your crystal ball only detects the near future, I'd say you're pretty much worthless as a fortune teller.

[Winehole23]

by then AGW will be wreaking unsurmountable havoc on water, food, coastal flooding all over the planet.the signs aren't globally bad for renewable energy. look at Germany. change may come too late to reverse damage already done, but there is the bare possibility the rate of change can be slowed in the long term.

we're by no means irrevocably fucked. the course we decide on now matters very much for a lot of things. regarding energy consumption, individual choice can be mighty in the aggregate.

[boutons_deux]

if your crystal ball only detects the near future, I'd say you're pretty much worthless as a fortune teller.

I'm talking about lifetimes for current adults, 30 - 40 more years

[boutons_deux]

the signs aren't globally bad for renewable energy. look at Germany. change may come too late to reverse damage already done, but there is the bare possibility the rate of change can be slowed in the long term.

we're by no means irrevocably fucked. the course we decide on now matters very much for a lot of things. regarding energy consumption, individual choice can be mighty in the aggregate.

While wind and solar are rapidly approaching the price of coal and nat gas energy, Repugs/BigCarbon are rolling back RETs (renewable energy targets) in many states, intending to block, nullify, non-enforce EPA rules if they can't kill EPA completely.

The Repug/VRWC strategy is to immobilize USA at least at current pollution levels, while permitting even higher pollution, rather than fed and state govts MOBILIZING with policies that aggressively promote wind, solar, EVs. (interesting that hybrids have sorta peaked, and the major mfrs all seems dead set on hydrogen EVs.)

BigCarbon and their dumbfuck End Times Bible humpers will make sure your pollyanna future won't arrive.

[boutons_deux]

Crime PAYS!

Whistle-Blower on Countrywide Mortgage Misdeeds to Get $57 MillionA former Countrywide Financial (http://topics.nytimes.com/top/news/business/companies/countrywide_financial_corporation/index.html?inline=nyt-org) executive who became a whistle-blower is collecting more than $57 million for helping federal prosecutors force Bank of America (http://dealbook.on.nytimes.com/public/overview?symbol=BAC&inline=nyt-org) to pay a record $16.65 billion penalty (http://dealbook.nytimes.com/2014/08/21/bank-of-america-reaches-16-65-billion-mortgage-settlement/) in connection with its role in churning out shoddy mortgage and related securities before the financial crisis.

http://mobile.nytimes.com/blogs/dealbook/2014/12/17/countrywide-whistle-blower-to-receive-more-than-57-million/

Mozillo still claims no fault, no regrets

[Winehole23]

http://www.tickld.com/x/economicsexplained

[boutons_deux]

Holder starts 90-day clock on potential prosecution of bankers

Attorney General Eric Holder said the Justice Department will determine within the next 90 days whether to charge individual Wall Street executives (http://www.publicintegrity.org/2013/09/10/13326/ex-wall-street-chieftains-living-large-post-meltdown-world)with crimes related to the 2008 financial crisis.
Holder said he’s asked the prosecutors who have been investigating the major banks and their executives to make recommendations whether to bring charges or close the probes.

“I’ve asked the U.S. attorneys … over the next 90 days to look at their cases and to try to develop cases against individuals and to report back in at 90 days with regard to whether or not they think they’re going to be able to successfully bring criminal and or civil cases against those individuals,” Holder said in a speech at the National Press Club Tuesday.

The announcement comes as the attorney general prepares to leave his post after more than six years on the job. President Barack Obama has appointed Loretta Lynch, the U.S. attorney for Brooklyn, to succeed him.

Holder has been criticized for failing to bring any individuals to justice for misdeeds that led to the collapse of the mortgage market and the subsequent financial crisis that resulted in the worst recession since the Great Depression

http://www.publicintegrity.org/2015/02/17/16786/holder-starts-90-day-clock-potential-prosecution-bankers?utm_source=email&utm_campaign=watchdog&utm_medium=publici-email&goal=0_ffd1d0160d-0080d49b49-100106293&mc_cid=0080d49b49&mc_eid=3b8f64cce8

[boutons_deux]

Study links credit default swaps, mortgage delinquencies

Researchers at The University of Texas at Dallas recently published the first empirical investigation connecting credit default swaps to mortgage defaults that helped lead to the 2007-2008 financial crisis.

The researchers found that the

presence of credit default swaps further stimulated the strong demand for mortgage-backed securities, which led to lax lending standards in the mortgage origination market and encouraged predatory lending and borrowing practices. Lenders increasingly offered subprime mortgages, which inevitably drove much higher mortgage default rates.

"There are many media reports that to some extent link the financial crisis (http://phys.org/tags/financial+crisis/) to the housing market crash, and subsequently, research has confirmed that," Zhang said. "One of the issues that people have paid particular attention to is the role played by derivative securities, and in this case, credit default swaps."

A credit default swap (CDS), in essence, acts as an insurance policy, Zhang said. When investors buy mortgage-backed securities, a CDS provides protection to the investor in case the borrower defaults on the loan.

The researchers found a

direct effect between credit default swaps and higher loan default rates.

Poor quality loans were originated by lenders, and then were repackaged, securitized and sold to investors.

The loans were no longer on the lenders' books, so they had less incentive to monitor the borrowers. The investors relied on their insurance policy—the CDS—and also neglected to monitor the borrowers.

"That's how the credit default swaps created more hazard issues and actually exacerbated the financial crisis, because it encouraged origination of poor quality loans," Zhang said.

more than 9 million privately securitized subprime mortgages (http://phys.org/tags/subprime+mortgages/) originated between 2003 and 2007.



http://phys.org/news/2015-05-links-credit-default-swaps-mortgage.html

I'll never forget pussy eater blaming Community Reinvestment Act! :lol

[boutons_deux]

Foreclosed nation: Wall Street, the dispossessed & the quality of American democracy

If those affected by foreclosure were a voting bloc, we'd treat the crisis as the ongoing emergency that it is


Why has the continued crisis of dispossession not been treated as a national emergency?

Given the scale of the foreclosure crisis, the policy response has been muted.

Congress and the Obama administration have repeatedly rejected demands for a national moratorium on mortgage foreclosures.

Legislators in several states introduced foreclosure moratorium bills, but few states enacted them, and those only briefly, in response to evidence of forged documents and other egregious fraud by lenders.

Calls for “cramdown” legislation that would have allowed bankruptcy judges to reduce mortgage loan principal went nowhere.

The federal government created several programs to respond to the crisis, including the Neighborhood Stabilization Program, the Home Affordable Modification Program, the Home Affordable Refinance Program, the Home Affordable Foreclosure Alternatives program, the Home Affordable Unemployment Program, and the Emergency Homeowners Loan Program.

Many of these programs were commendable, but few of them were effective, and from the standpoint of the dispossessed they were too little, too late.

None of them had much effect on the pace of foreclosures.

Nor did any of them direct much aid to people who had already been dispossessed.

This is not how we would treat the crisis if it were recognized as the ongoing emergency that it is.

One reason that we have not done enough may be the sheer scale of the problem.

http://www.salon.com/2015/05/31/foreclosed_nation_wall_street_the_dispossessed_the _quality_of_american_democracy/

Foreclosure Crisis: Too Big To Fix.

[Winehole23]

for those foreclosed upon, it's an emergency. for Berkshire Hathaway/Goldman-Sachs/JP Morgan Chase and the like, it's an opportunity.

[boutons_deux]

for those foreclosed upon, it's an emergency. for Berkshire Hathaway/Goldman-Sachs/JP Morgan Chase and the like, it's an opportunity.

... that their Congressional enablers/protectors won't hinder, except Warren, Sanders, Grayson, etc and other "socialists".

[boutons_deux]

Consumers Can’t Void Second Mortgage In Bankruptcy, SCOTUS Rules

Consumers taking out a second mortgage will now have to consider the fact that if they encounter financial difficulties and file for bankruptcy, they won’t be able to strip off the additional loan obligation.

The Wall Street Journal reports (http://www.wsj.com/articles/supreme-court-underwater-homeowners-cant-void-second-mortgages-in-bankruptcy-1433173699) that the Supreme Court ruled in favor of banks :lol

when it came to determining that struggling homeowners can’t get rid of a second mortgage using bankruptcy protection, even if the home’s value is less than the amount owed on the first mortgage.

http://consumerist.com/2015/06/01/consumers-cant-void-second-mortgage-in-bankruptcy-scotus-rules/

[boutons_deux]

Mortgages Are About Math: Open-Source Loan-Level Analysis of Fannie and Freddie



http://i.imgur.com/7V4vSu8.png Ben B! :lol

http://i.imgur.com/3hYZr8U.png


http://i.imgur.com/dPfkkS1.png

http://i.imgur.com/S5oqMSh.png



http://toddwschneider.com/posts/mortgages-are-about-math-open-source-loan-level-analysis-of-fannie-and-freddie/

[boutons_deux]

Banks That Failed to Fix Mortgage Services Face Restrictions

JPMorgan Chase (http://topics.nytimes.com/top/news/business/companies/morgan_j_p_chase_and_company/index.html?inline=nyt-org), Wells Fargo (http://topics.nytimes.com/top/news/business/companies/wells_fargo_and_company/index.html?inline=nyt-org) and four other large banks have failed to make long-promised improvements to their mortgage operations, a federal regulator said on Wednesday.

The six banks, and several others, had agreed in 2011 to make dozens of changes to the way they issue and service mortgages after being accused of wrongly foreclosing on homeowners after the financial crisis. Homeowners had faced problems including bungled loan modifications (http://topics.nytimes.com/your-money/loans/loan-modifications/index.html?inline=nyt-classifier), deficient paperwork, excessive fees and wrongful evictions that stemmed from the sprawling mortgage issues.

As a result of their failure to comply with the 2011 agreement, the banks will now have new restrictions on their mortgage divisions, the Office of the Comptroller of the Currency (http://topics.nytimes.com/top/reference/timestopics/organizations/c/comptroller_of_the_currency/index.html?inline=nyt-org) said on Wednesday.

The agency, which is one of primary federal regulators of financial institutions, said that the six banks cited would also face additional fines and restrictions in the coming months that would vary based on the degree of the continuing problems.

The announcement underscored just how long it has taken the banks to correct the problems that were turned up during the crisis. Back in 2011, regulators initially gave the banks 120 days to make improvements in a number of areas. While the banks were later given extensions, few expected the issues to persist into 2015.

The O.C.C. found that HSBC had the most continuing problems; it did not make 45 of the 98 changes it had agreed to in the 2011 consent order and an amended agreement in 2013. Wells Fargo, the largest mortgage lender in the country last year, failed to put in place 15 of the 98 changes.

Wells Fargo did not, among other things, take adequate steps to deal properly with customers in bankruptcy, and did not have the proper processes in place “to ensure that all fees, expenses and other charges imposed on the borrower are assessed in accordance with the terms of the underlying mortgage note,” the new consent order said.

Because of the extent of their problems, HSBC and Wells Fargo will be barred from acquiring any new mortgage servicing rights from other banks.
JPMorgan, Santander, U.S. Bank and EverBank will be able to acquire new rights only with advance approval of regulators. None of the banks will face any restrictions on mortgages they issue themselves.

The mortgage servicing arms of the banks manage the direct relationship with borrowers and deal with homeowners when they fall behind on their payments. Banks often buy the right to service mortgages issued by other institutions. Wells Fargo and JPMorgan currently have the largest servicing portfolios in the country.

http://www.nytimes.com/2015/06/18/business/dealbook/banks-that-failed-to-fix-mortgage-services-face-restrictions.html?partner=rss&emc=rss&_r=0

[Winehole23]

Eric Holder: before, during and after


After failing to criminally prosecute any of the financial firms responsible for the market collapse in 2008, former Attorney General Eric Holder is returning (http://m.nationallawjournal.com/module/alm/app/nlj.do#%21/article/1748490164) to Covington & Burling, a corporate law firm known for serving Wall Street clients.
The move completes one of the more troubling trips through the revolving door for a cabinet secretary. Holder worked at Covington from 2001 right up to being sworn in as attorney general in Feburary 2009. And Covington literally kept an office empty for him, awaiting his return.


The Covington & Burling client list has included four of the largest banks, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Lobbying records (http://www.opensecrets.org/lobby/firmsum.php?id=D000021942) show that Wells Fargo is still a client of Covington. Covington recently represented (http://www.law360.com/articles/639645/banks-move-to-nix-cases-in-libor-mdl-over-jurisdiction) Citigroup over a civil lawsuit relating to the bank’s role in Libor manipulation.


Covington was also deeply involved with a company known as MERS, which was later responsible for falsifying mortgage documents on an industrial scale. “Court records show that Covington, in the late 1990s, provided legal opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac, Bank of America, JPMorgan Chase and several other large banks,” according to an investigation (http://www.reuters.com/article/2012/01/20/us-usa-holder-mortgage-idUSTRE80J0PH20120120) by Reuters.


The Department of Justice under Holder not only failed (http://billmoyers.com/2014/10/01/going-easy-eric-holders-wall-street-inaction/) to pursue criminal prosecutions of the banks responsible for the mortgage meltdown, but in fact de-prioritized investigations of mortgage fraud, making it the “lowest-ranked criminal threat,” according (http://www.usatoday.com/story/news/nation/2014/03/13/investigation-justice-mortgage-fraud/6371311/) to an inspector general report.https://firstlook.org/theintercept/2015/07/06/eric-holder-returns-law-firm-lobbies-big-banks/

[boutons_deux]

Eric Holder: before, during and after

https://firstlook.org/theintercept/2015/07/06/eric-holder-returns-law-firm-lobbies-big-banks/

Mary Jo White has to go

Loretta Lynch also handled Wall St with 100% deference.

[Winehole23]

who picked her?

[boutons_deux]

who picked her?

Obama. they are ALL pledged to enrich/protect/enable the financial sector. iow, America is fucked and unfuckable.

[FuzzyLumpkins]

Hey Winehole23 I know you and I don't get along particularly well but I would like to say I'm glad to see you posting more lately. Get TB posting more and this place will feel a bit closer to normal.

[Winehole23]

thx, Fuzzy.

[boutons_deux]

Get TB posting more and this place will feel a bit closer to normal.

TB? :lol TB :lol doesn't post, he stalks TGB.

[FuzzyLumpkins]

thx, Fuzzy.

:bobo

[TeyshaBlue]

Thanks Fuzzy. My job, an unbidden career as a process and controls consultant, keeps me travelling 5-6 days a week and free time has simply evaporated. I get to peek in alot but rarely have time to put together much.


:lol at buttons_hurt

[Winehole23]

six years after the epochal bust, the hits keep coming:


US banking major Goldman Sachs is on the verge of settling another lawsuit over its dealings with mortgage-backed securities (MBS) in the run-up to the 2008 financial crisis.


In the latest development, the bank has agreed to pay around $270m (£173m, €246m) to settle a lawsuit brought by Pension funds led by NECA-IBEW Health & Welfare Fund of Illinois, who invested in residential MBS underwritten by it, according to media reports.

http://www.ibtimes.co.uk/goldman-sachs-agrees-270m-settlement-mortgage-bond-investors-1513622

[boutons_deux]

Banks Rejected Three Out of Four Requests for Loan Modifications Under Vaunted Obama Program

A Slack Lifeline for Drowning Homeowners

Advertised in 2009 as a lifeline for as many as four million troubled borrowers, the program was one of the Obama administration’s signature efforts to help homeowners. But the report, by Christy L. Romero, the government official with authority to monitor the program, shows that six years later, just 887,001 borrowers are participating in loan modifications — deals that reduce the costs of mortgages.

It appears that the program has allowed big banks to run roughshod over borrowers again and again.

Instead of helping some four million borrowers get loan modifications, the report (http://www.sigtarp.gov/Quarterly%20Reports/July_29_2015_Report_to_Congress.pdf) noted, banks participating in the program have rejected four million borrowers’ requests for help, or 72 percent of their applications, since the process began. From the outset, Treasury’s loan modification program had problems. Among them were two design flaws: making the program voluntary for the banks and letting those banks that participated run the process on their own.

The data points in the new report are grim.

CitiMortgage, a unit of Citibank, had the worst record, rejecting 87 percent of borrowers applying for a loan modification. JPMorgan Chase was almost as bad, with a denial rate of 84 percent. Bank of America turned down 80 percent, and Wells Fargo rejected 60 percent.

The banks say they have good reasons for rejecting loan modification applicants. In 38 percent of cases, the banks blamed the borrower for either not completing the paperwork or failing to make the first payment under the program.

http://www.nytimes.com/2015/08/02/business/pulling-down-underwater-borrowers.html

The bankrupt, bailed-out banksters refuse to bail out underwater Human-Americans. They got them under contract, and they'll get every last dollar, or take the home cheap, rent it out and/or flip for a big profit.

[Winehole23]

Barry Ritholz in Bloomberg, on who got bailed out:


You probably learned the phrase "moral hazard" during the financial crisis. In short, what it means is that the bailouts rescued leveraged, reckless speculators from the results of their unwise professional folly and gave them an incentive to do it all over again. They were and the intended rescuees.


Do you think I am exaggerating? Consider the U.S. bailout in its manifold forms, from TARP to ZIRP to QE. How many bondholders suffered losses from their poor investment decisions? With the exception of holders of Lehman Brothers' debt and a handful of banks that weren't deemed too big to fail, just about every other bondholder was made whole, 100 cents on the dollar.


Thanks to rescue plans such as the Trouble Asset Relief Program, holders of bonds from a diverse assortment of failed and failing companies suffered literally no losses. American International Group? Zero losses. Government sponsored entities Fannie Mae and Freddie Mac? Zero losses. Banking giants Citigroup and Bank of America? Zero losses. Morgan Stanley, Merrill Lynch, Goldman Sachs, Bear Stearns? Zero losses.

http://www.bloombergview.com/articles/2015-07-31/money-tells-us-who-benefits-from-bailouts

[Winehole23]

without the susbidy to TBTFs, financial sector profits and bonuses would vanish, says Robert Reich. suggests the financial sector might still be essentially insolvent, seven years after the epochal bust.



People who park their savings in these banks accept a lower interest rate on deposits or loans than they require from America’s smaller banks. That’s because smaller banks are riskier places to park money. Unlike the big banks, the smaller ones won’t be bailed out if they get into trouble.

This hidden subsidy gives Wall Street banks a competitive advantage over the smaller banks, which means Wall Street makes more money. And as their profits grow, the big banks keep getting bigger.


How large is this hidden subsidy? Two researchers, Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz, have calculated (http://www.imf.org/external/pubs/ft/wp/2012/wp12128.pdf) it’s about eight tenths of a percentage point.


This may not sound like much but multiply it by the total amount of money parked in the ten biggest Wall Street banks and you get a huge amount – roughly $83 billion (http://www.bloombergview.com/articles/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-) a year.


Recall that the Street paid out $26.7 billion in bonuses last year. You don’t have to be a rocket scientist or even a Wall Street banker to see that the hidden subsidy the Wall Street banks enjoy because they're too big to fail is about three times what Wall Street paid out in bonuses.


Without the subsidy, no bonus pool.


By the way, the lion’s share of that subsidy ($64 billion a year) goes to the top five banks – JPMorgan, Bank of America, Citigroup, Wells Fargo. and Goldman Sachs. This amount just about equals these banks’ typical annual profits. In other words, take away the subsidy and not only does the bonus pool disappear, but so do all the profits.



The reason Wall Street bankers got fat paychecks plus a total of $26.7 billion in bonuses last year wasn’t because they worked so much harder or were so much more clever or insightful than most other Americans. They cleaned up because they happen to work in institutions – big Wall Street banks – that hold a privileged place in the American political economy.

http://robertreich.org/post/79512527145

[Winehole23]

one of the biggest dangers, is this description of the present:


The reason Wall Street bankers got fat paychecks plus a total of $26.7 billion in bonuses last year wasn’t because they worked so much harder or were so much more clever or insightful than most other Americans. They cleaned up because they happen to work in institutions – big Wall Street banks – that hold a privileged place in the American political economy.

[boutons_deux]

Where Do Overdrafts Come From?

Overdrafts are a relatively new form of short-term credit that is touted by some of the most venerable and respectable financial institutions in the land.

An overdraft occurs when a bank or credit union extends credit once an account reaches zero.

The overdraft permits the client to continue withdrawing or spending money even when there is no money in the account.

Not surprisingly, banks charge a fee for this service.Banks originally offered clients this service as a courtesy.

However, once banks began to adopt automated software to manage accounts, it became easier to provide and charge for overdraft services.

As a result, overdraft fees charged by banks doubled from $18 billion in 1999 to $37 billion in 2009.

According to an ICBA survey of 200 bankers nationwide, overdraft fees constitute their most profitable non-depository and non-lending product.

That is so shocking it’s worth repeating.

Overdraft fees are one of the most profitable sources of revenue for banks.While some consumers are surely pleased that their bank helps avoid hassles and the embarrassment of being declined on a purchase, most would be horrified by the median $34 overdraft fee on purchases of as little as a few dollars.

https://www.loannow.com/bank-overdraft-policy-reform-overdue/

[boutons_deux]

The CFPB concluded that the overdraft fees checking-account users pay are the equivalent of a 17,000% annual percentage rate.

Banks’ overdraft policies came under fire by regulators and consumer advocates during the economic downturn.

Annual overdraft revenue collected by banks and other financial institutions peaked at $37.1 billion in 2009 and has since been mostly declining, according to Moebs Services, an economic research firm in Lake Forest, Ill. It totaled $31.8 billion in 2014.

The declines are due to several factors, including consumers avoiding overdrafts and using more affordable banking options,

New regulation has also played a role.

The Federal Reserve amended Regulation E, a change that went into effect in 2010, to prohibit banks from charging for overdrafts when consumers use their debit card to go shopping or make withdrawals from an ATM—unless consumers opt in for overdraft coverage, which many banks refer to as overdraft protection.

http://blogs.wsj.com/totalreturn/2015/05/12/overdraft-fees-continue-to-weigh-on-bank-customers/ (http://blogs.wsj.com/totalreturn/2015/05/12/overdraft-fees-continue-to-weigh-on-bank-customers/)

[boutons_deux]

An S.E.C. Settlement With Citigroup That Fails to Name Names

How can we expect Wall Street’s me-first culture to change when regulators won’t pursue or even identify the me-firsters who are directly involved?

That question came to mind after reading the terms of a settlement (http://www.sec.gov/litigation/admin/2015/33-9893.pdf) struck on Aug. 17 between the Securities and Exchange Commission (http://topics.nytimes.com/top/reference/timestopics/organizations/s/securities_and_exchange_commission/index.html?inline=nyt-org) and two units of Citigroup (http://topics.nytimes.com/top/news/business/companies/citigroup_inc/index.html?inline=nyt-org). It is a deal that holds no one at the bank accountable for behavior that caused investors to lose an estimated $2 billion.

The settlement involved a disastrous municipal bond (http://topics.nytimes.com/top/reference/timestopics/subjects/m/municipal_bonds/index.html?inline=nyt-classifier) strategy the bank concocted and peddled to 4,000 wealthy clients from 2002 until early 2008. It was sold to investors as a safe-money option, even though it used considerable leverage, which always brings hazards when assets decline.

The S.E.C. contended that officials at Citi did not disclose the risks in the investment strategy. “Advisers at these Citigroup affiliates were supposed to be looking out for investors’ best interests but falsely assured them they were making safe investments even when the funds were on the brink of disaster,” said Andrew Ceresney, chief of enforcement at the S.E.C., when the settlement was announced.

Citigroup will pay $180 million in the settlement, most of which will be distributed to wronged investors. The bank neither admitted nor denied the S.E.C.’s allegations. A spokesman said the bank was pleased to have resolved the matter.

A $180 million deal is significant as far as these kinds of settlements go. But the S.E.C. is limited — it is permitted only to go after ill-gotten gains. It may not pursue compensatory damages for investor losses.

Most disturbing, though, is the settlement’s lack of accountability. As is all too common, Citigroup’s shareholders are footing the $180 million bill associated with it. But they didn’t devise the toxic bond strategy, sell it or hide its risks to investors.

That was the work of Citi employees, as the S.E.C.’s order makes clear. Indeed, it contains chapter and verse about the crucial role played by the fund manager overseeing these investments. Some 50 references to actions taken by the fund manager and his staff are contained in the order.

For example: “The fund manager and the fund manager’s staff played a significant role in drafting and disseminating information regarding the funds to investors and financial advisers without sufficient review or oversight to ensure that the information given to investors was accurate.”

And “the fund manager was involved in virtually all fund-related communications with the financial advisers and investors.”

Yet the S.E.C. never identifies who this central player was.

http://mobile.nytimes.com/2015/08/30/business/sec-settlement-with-citigroup-holds-no-one-responsible.html?_r=0

[Winehole23]

Julian Castro modifies the rules to allow banks that pleaded guilty to federal crimes to continue to do business with HUD and have their risk covered by the FHA:


Citigroup and JPMorgan Chase appeared to score a significant victory Tuesday after the Department of Housing and Urban Development suggested it won't punish lenders for major crimes committed by their corporate parents.


The announcement concerns a requirement (http://www.huffingtonpost.com/entry/obama-hud-big-banks_55c4f2f2e4b0923c12bcc4b1) that lenders in HUD's mortgage insurance program certify they haven't been convicted of violating federal antitrust laws or other serious crimes. Citi and JPMorgan in May pleaded guilty to felony charges that they broke federal antitrust laws for their traders’ participation in a yearslong scheme to manipulate currency markets for profit. Both companies own banks that make mortgages that are later insured by the HUD-overseen Federal Housing Administration.


But on Tuesday, Secretary Julián Castro's housing agency proposed modifying the required certification in a way that would apply only to HUD-registered lenders. The lenders' parent companies wouldn't be on the hook, thus seemingly enabling Citi and JPMorgan's HUD-registered units to continue certifying that they haven't pleaded guilty to federal antitrust charges.


Castro's agency in May had initially proposed deleting the requirement altogether. The agency slightly retreated following criticism from three powerful Democratic lawmakers: Rep. Maxine Waters of California and Sen. Sherrod Brown of Ohio and Sen. Elizabeth Warren of Massachusetts, who had argued that the housing agency was trying to "make it easier for lenders who have engaged in illegal behavior" to continue participating in the federal mortgage insurance program.
Still, as a result of Tuesday's announcement, JPMorgan's and Citi's guilty pleas are likely to have little, if any, effect on their federal mortgage business.

http://www.huffingtonpost.com/entry/juli%C3%A1n-castro-helps-wall-street-criminals-dodge-accountability_55e5d0dae4b0aec9f3549597

[boutons_deux]

Julian Castro modifies the rules to allow banks that pleaded guilty to federal crimes to continue to do business with HUD and have their risk covered by the FHA:

http://www.huffingtonpost.com/entry/juli%C3%A1n-castro-helps-wall-street-criminals-dodge-accountability_55e5d0dae4b0aec9f3549597

BigFinance, FIRE are untouchable, are the primary owners of Federal govt.

[Winehole23]

reverse redlining suits revived:


A U.S. appeals court revived three lawsuits filed by the City of Miami against Wells Fargo (WFC (http://markets.housingwire.com/housingwire/quote?Symbol=321%3A966021)), Bank of America (BAC (http://markets.housingwire.com/housingwire/quote?Symbol=BAC)) and Citigroup (C (http://markets.housingwire.com/housingwire/quote?Symbol=C)), alleging predatory mortgage lending practices against minority borrowers.
In a unanimous vote, the 11th U.S. Circuit Court of Appeals reversed a lower court’s dismissal of the city's claims under the federal Fair Housing Act.


Miami’s lawsuit alleges the three banks engaged in a long-term lending discrimination in its residential housing market programs.


"It is clear that the harm the city claims to have suffered has a sufficiently close connection to the conduct the statute prohibits," Circuit Judge Stanley Marcus wrote.


Other cities like Baltimore, Chicago, Los Angeles and Memphis have met with mixed results attempting to bring suits against the lenders for what they call predatory lending targeted at black and Hispanic homebuyers.
The lawsuit in Miami charged that the three banks steered black and Hispanic borrowers toward higher-cost loans.


The city said in its brief that this "reverse redlining" led to a large number of foreclosures, lower property tax collections and increased cost to the city to deal with the resultant property values loss and concomitant blight.

http://www.housingwire.com/articles/34966

[boutons_deux]

Officials Cover Up Housing Bubble’s Scummy Residue: Fraudulent Foreclosure Documents (https://theintercept.com/2015/09/14/officials-cover-housing-bubbles-scummy-residue-fraudulent-foreclosure-document/)

EVERY DAY IN AMERICA, mortgage companies attempt to foreclose on homeowners using false documents.

It’s a byproduct of the mortgage securitization craze during the housing bubble, when loans were sliced and diced so haphazardly that the actual ownership was confused.

When the bubble burst, lenders foreclosing on properties needed paperwork to prove their standing, but didn’t have it — leading mortgage industry employees to forge, fabricate and backdate millions of mortgage documents. This foreclosure fraud scandal was exposed in 2010, and acquired a name: “robo-signing.”

But while some of the offenders paid fines over the past few years, nobody cleaned up the documents. This rot still exists inside the property records system all over the country, and those in a position of authority appear determined to pretend it doesn’t exist.

In two separate cases, activists have charged that officials and courts are hiding evidence of mortgage document irregularities that, if verified, could stop thousands of foreclosures in their tracks. Officials have delayed disclosure of this evidence, the activists believe, because it would be too messy, and it’s easier to bottle up the evidence than deal with the repercussions.

“All they’re doing is making a mockery of our judicial system,” said Bill Paatalo, a private investigator and one of the activists.

Like many other anti-foreclosure activists, Paatalo got involved with the issue through a case involving his own property — in Absarokee, Montana. Like many homeowner loans purchased during the housing bubble, Paatalo’s was packaged into a mortgage-backed security.

The process worked like this: The loans were eventually sold into a tax-exempt REMIC (Real Estate Mortgage Investment Conduit) trust; the REMIC trust received monthly mortgage payments from homeowners; and the payments were passed along to investors in the mortgage-backed securities.

The trust where Paatalo’s mortgage ended up is known as “WaMu Mortgage Pass-Through Certificates Services 2007-OA3 Trust.” When he faced foreclosure, the trust, as the nominal owner of the mortgage, was the plaintiff.

In doing research for his own trial, Paatalo discovered that all “foreign business trusts” established outside of Montana have to register with the Secretary of State in order to transact business, under Title 35-5-201 of the Montana code (http://leg.mt.gov/bills/mca/35/5/35-5-201.htm). Trustees must file an application (http://sos.mt.gov/Business/forms/Profit/Foreign/48-Certificate_of_Foreign_Business_Trust.pdf), along with legal affidavits affirming its trust agreement and identifying all trustees, and pay a $70 filing fee.

WaMu Mortgage Pass-Through Certificates Services 2007-OA3 Trust — based in Delaware — didn’t.

That means that the trust could not acquire property in Montana — precisely what it was alleging it did in Paatalo’s foreclosure case. An affidavit from Tana Gormely, a deputy for the Business Services Division in the Montana Secretary of State’s office, confirms that the 2007-OA3 trust “is not registered with our office as required by law.”

The Montana Supreme Court affirmed the legal significance of non-registration in an April 2011 case, Estate of Reeder v. Olsen (http://law.justia.com/cases/montana/supreme-court/2011/4029d5ec-9310-475e-a81a-24fbab51769e.html). There, the Supreme Court agreed with a lower court decision (http://documents.jdsupra.com/d81a5140-ecdb-4650-bc77-c2b14342a61c.pdf) that, since trusts prepared in Colorado for Montana resident Christine Reeder before her death did not register with the state, the property of Reeder’s estate could not be conveyed to them. And the court said they could not “retroactively validate themselves” either.

By those rules, all Montana foreclosures involving a REMIC trust not based in Montana would be illegal and unenforceable unless they had properly registered. Even completed foreclosures would be subject to wrongful foreclosure claims.

...

https://theintercept.com/2015/09/14/officials-cover-housing-bubbles-scummy-residue-fraudulent-foreclosure-document/

People are still losing $100Ms, $Bs to these capitalist criminals.

[Winehole23]

ongoing falsification of chain of title:


Bill Paatalo is a former cop who worked in the mortgage industry as a loan officer and, from 2002-2008, the President of Wissota Mortgage in the Midwest. Since 2009, after experiencing his own mortgage trouble through a loan with Washington Mutual, he became a licensed private investigator specializing in securitization and chain of title analysis. He testifies as an expert witness, working with foreclosure defense attorneys and pro se litigants.

On May 15, Bill got an email out of the blue from Jamie Gerber, “team lead” for a company called Security Connections. Here’s that email:
http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-1.png (http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-1.png)
To back up, Security Connections (https://www.security-connect.com/homepage/home.aspx), of Idaho Falls, ID, is a document services provider for major mortgage companies (their motto: “Bringing you peace of mind”). Bank of America used Security Connections (http://www.foreclosurehamlet.org/profiles/blogs/bank-of-america-false) years ago on mortgages originated by First Franklin Bank. We have this deposition (http://www.lsnj.org/NewsAnnouncements/Foreclosure/materials/EXHIBITGBOA.pdf) of Security Connections robo-signer Krystal Hall, who admitted to signing 400 assignments of mortgage per day without knowing any underlying information about the transactions. That deposition is from November 2009, so they’ve been at this a while.
This brief description (http://www.indeed.com/cmp/Security-Connections) of Security Connections from job site Indeed.com helpfully explains that “if you are missing documents or need a mortgage recorded, we have a highly trained department with the skills to locate and record these documents.” They add:

With the implementation of many privacy laws, SCI is extremely sensitive to the needs of our clients. We understand that client-provided information supplied to us for the purpose of completing contractual obligations must be safeguarded. SCI goes the extra mile to satisfy and ease the concerns of our clients while still maintaining a low cost structure.
So this is a third party document processor, designed to give mortgage companies plausible deniability for fabricating mortgage paperwork. And they’re coming to Bill Paatalo, a known expert in fighting foreclosure fraud, to get him to forge a mortgage assignment, so Residential Credit Solutions can get clear title on the mortgage.
Why? Don’t they have their own teams of signers to do this work? When I talked to Bill about it, he noted that he has been solicited in the past to identify deficiencies in mortgage documentation, kind of like a hacker being asked to identify vulnerabilities in an IT system. This seems different – perhaps entrapment, getting Bill’s name on a forged document to prove his culpability in foreclosure fraud and ruin his credibility as an expert witness. More likely, Jamie Gerber just needed an assignment involving Washington Mutual, Googled the company, and Bill’s name came up because he has WaMu expertise.
Little did she know that Bill was pretty savvy in these matters. Here’s his response, playing dumb to reel in more information:
http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-2.png (http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-2.png)
Bill, who never had any dealings with Security Connections before, wanted to see the Residential Credit Solutions request, because it would show their authorization to fabricate the document. RCS, by the way, just got nailed by CFPB (http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-mortgage-company-for-blocking-consumers-attempts-to-save-their-homes/) for “failing to honor modifications for loans transferred from other servicers” and “treating consumers as if they were in default when they weren’t.” They paid $1.6 million in restitution and civil penalties. The company, specializing in servicing delinquent loans and based in Fort Worth, Texas, only has $95 million in total assets.
Here’s Jamie Gerber’s reply:
http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-3.png (http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-3.png)
A quick note: a release of mortgage could happen when the mortgage is paid off, or could also happen in a “deed in lieu” foreclosure (http://www.knowyouroptions.com/avoid-foreclosure/options-to-leave-your-home/mortgage-release), where the family gets a release of mortgage and agrees to hand over the home without debt. Given Residential Credit Solutions’ profile as a delinquent loan specialist, the latter is more likely in my opinion.
RCS clearly hired Security Connections to clean up their documents. They want to acquire this property, but can’t resell it without the missing assignment, so Security Connections was asked to fill in the blanks on the chain of title. This will allow RCS to basically steal this property in a deed in lieu foreclosure, when they wouldn’t be able to foreclose on this borrower in a court, for example, without that assignment.
And as noted in the email, Jamie Gerber handed this stranger the borrower’s mortgage (actually the note), confidential information in potential violation of privacy laws. So much for “We understand that client-provided information must be safeguarded.” I won’t make the same mistake, though I will tell you that the home is in West Haven, Connecticut, and the 30-year fixed-rate loan was taken out on January 22, 2002 for $134,400. The borrower’s signature is on the note.
So Bill tries to draw out more information.
http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-4.png (http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-4.png)
Since they just asked him to fabricate an assignment from scratch, Bill is clearly looking for some template, some example of what Security Connections does. Here’s Jamie’s reply, a couple weeks later (things must have gotten busy in Idaho Falls):
http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-5.png (http://www.nakedcapitalism.com/wp-content/uploads/2015/08/Paatalo-Screen-Shot-5.png)
So yes, Jamie sends along a mocked-up assignment of mortgage, with blanks for where Bill can add the name “Residential Credit Solutions.” A notation under that line says “The legal description is attached hereto as a separate exhibit and is made a part hereof.” That separate exhibit would have been Bill’s responsibility. The assignment is pre-signed by Washington Mutual officials and pre-notarized, with a notary stamp. My guess would be that Security Connections is using some old assignment and repurposing it, with the recipient of the mortgage’s name to appear later. The discrepancy between the amount due on this assignment ($25,200) and the amount on the note ($134,400) helps give it away. “It was basically filling in a document that would appear as though it was done in 2002, on behalf of WaMu, which has been dead since 2008,” Bill told me. Here’s that mock assignment (I blacked out the borrower’s name):
http://www.nakedcapitalism.com/wp-content/uploads/2015/09/Paatalo-Screen-Shot-6.png (http://www.nakedcapitalism.com/wp-content/uploads/2015/09/Paatalo-Screen-Shot-6.png)
This is a solicitation to commit a felony, to fabricate a mortgage document, presented in such a way that it looks like a fairly routine practice. My suspicion is that these fake assignments allow Residential Credit Solutions to secure properties in deed-in-lieu foreclosures that they would otherwise not be able to do anything with, because they would not have a full chain of title. That’s theft, or foreclosure fraud, if you prefer.
Bill’s experience is that document fabrication continues at the same rate that it ever did. “They can sign settlements, but as long as no one is going to jail, it’s a profitable business venture,” he said. “What I believe is that nobody knows who owns what, so the only thing they can do is recreate chains of title. They’re marching this garbage into our courtrooms on a daily basis.”

http://www.nakedcapitalism.com/2015/09/proof-of-ongoing-foreclosure-fraud-and-mortgage-document-fabrication-in-five-emails.html

[boutons_deux]

iow, outright robbery, burglary, theft

[Winehole23]

fudged documents for Seattle foreclosures approaches 100% in audit:


A Seattle housing activist on Wednesday uploaded an explosive land-record audit (http://www.scribd.com/doc/281414769/McDonnell-Analytics-Final-Report-City-of-Seattle-Review-of-Mortgage-Documents-Hosted-by-KingCast-Mortgage-Movies) that the local City Council had been sitting on (https://theintercept.com/2015/09/14/officials-cover-housing-bubbles-scummy-residue-fraudulent-foreclosure-document/), revealing its far-reaching conclusion: that all assignments of mortgages the auditors studied are void.

That makes any foreclosures in the city based on these documents illegal and unenforceable, and makes the King County recording offices where the documents are located a massive crime scene.


The problems stem from the Mortgage Electronic Registration Systems (http://www.rollingstone.com/politics/news/an-extremely-long-metaphor-to-explain-mortgage-chaos-20110101) (MERS), an entity banks created so they could transfer mortgages privately, saving them billions of dollars in transfer fees to public recording offices. In Washington state, MERS’ practices were found illegal by the State Supreme Court in 2012. But MERS continued those practices with only cosmetic changes, the audit found.


That finding has national implications. Every state has its own mortgage laws, and some of the audit’s conclusions may not necessarily apply elsewhere. But it shows how MERS reacted to being caught defrauding the public by trying to sneak through foreclosures anyway. Combined with evidence in other parts of the country, like the failure to register (https://theintercept.com/2015/09/14/officials-cover-housing-bubbles-scummy-residue-fraudulent-foreclosure-document/) out-of-state business trusts in Montana, it suggests that the mortgage industry has been inattentive to and dismissive of state foreclosure laws.

https://theintercept.com/2015/09/18/leaked-seattle-audit-concludes-many-mortgage-documents-void/

[boutons_deux]

As Banks Retreat, Private Equity Rushes to Buy Troubled Home Mortgages

Private equity (http://topics.nytimes.com/top/reference/timestopics/subjects/p/private_equity/index.html?inline=nyt-classifier) and hedge fund firms have bought more than 100,000 troubled mortgages at a discount from banks and federal housing agencies, emerging as aggressive liquidators for the remains of the mortgage crisis that erupted nearly a decade ago.

As the housing market nationwide recovers, this is a dark corner from which banks, stung by hefty penalties for bungling mortgage modifications and foreclosures (http://topics.nytimes.com/top/reference/timestopics/subjects/f/foreclosures/index.html?inline=nyt-classifier), have retreated. Federal housing officials, for the most part, have welcomed the new financial players as being more nimble and creative than banks with terms for delinquent borrowers.

But the firms are now drawing fire. Housing advocates and lawyers for borrowers contend that the private equity firms and hedge funds are too quick to push homes into foreclosure and are even less helpful than the banks had been in negotiating loan modifications (http://topics.nytimes.com/your-money/loans/loan-modifications/index.html?inline=nyt-classifier) with borrowers. Federal and state lawmakers are taking up the issue, questioning why federal agencies are selling loans at a discount of as much as 30 percent to such firms.

One company has emerged as a lightning rod, criticized by housing advocates and lawyers for borrowers, but admired by investors: Lone Star Funds, a $60 billion private equity firm founded in 1995 by John Grayken. In just a few years, Lone Star’s mortgage servicing firm, Caliber Home Loans, has grown from a bit player to a major force in the market for distressed mortgages.

An examination by The New York Times of housing data, court filings and interviews with borrowers, lawyers and housing advocates revealed a pattern of complaints that Lone Star was quick to begin foreclosure proceedings, whether the firm had bought a delinquent mortgage at a federal auction or directly from a bank.

http://www.nytimes.com/2015/09/29/business/dealbook/as-banks-retreat-private-equity-rushes-to-buy-troubled-home-mortgages.html?partner=rss&emc=rss

[boutons_deux]

Private Equity Buying Troubled Home Mortgages (http://www.ritholtz.com/blog/2015/09/private-equity-buying-troubled-home-mortgages/)
http://www.ritholtz.com/blog/wp-content/uploads/2015/09/lone-star-foreclosures.png

http://www.ritholtz.com/blog/2015/09/private-equity-buying-troubled-home-mortgages/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Pict ure%29

[boutons_deux]

Wells Fargo's Master Spin Job

Reporters and politicians are lining up to congratulate Wells Fargo for its multimillion-dollar neighborhood grant program – but they're leaving out one small detail

All over the country, Wells Fargo is making headlines for launching a multimillion-dollar homeowner assistance program called HomeLIFT, which among other things offers $15,000 down payment grants to prospective home-buyers.

Local mayors in big cities from one end of the country to the other are showing up at ribbon-cuttings and throwing rose petals at the bank for its generosity. Newspapers in turn are running breathless profiles of the low-income homeowners who will now get to buy dream homes thanks to the bank's beneficence.

Some knew, some didn't, but all are leaving out one key detail: Wells Fargo was forced to launch HomeLIFT.

To understand the background, we have to go back to July 25th of last year, when a federal judge in the Northern District of California approved a settlement in a case called City of Westland Police and Fire Retirement System v. Stumpf. The suit was brought on behalf of shareholders by Robbins Geller, the same firm featured in a story I wrote two years ago (http://www.rollingstone.com/politics/news/the-last-mystery-of-the-financial-crisis-20130619) about the ratings agencies.

For those who are fortunate enough to have forgotten, robo-signing was a common practice that devastated families during the foreclosure crisis. People all over the country found themselves booted out of their homes thanks to bogus affidavits signed by "vice presidents (http://media.cleveland.com/business_impact/photo/mortgage-robo-signing-968ab52cc4bf66dd.jpg)" and "regional managers," who were often scraggly kids just out of college blindly signing hundreds of documents a day, if not more.

It was a kind of systematic perjury, and most of the major banks (http://www.cnbc.com/2014/03/18/big-banks-meet-robo-signing-settlement-obligations.html) eventually copped to doing it.

Wells Fargo was one of those banks, joining JPMorgan Chase, Bank of America, Ally Financial, Citigroup and others in a sweeping $25 billion settlement (http://www.justice.gov/opa/pr/federal-government-and-state-attorneys-general-reach-25-billion-agreement-five-largest) with state and federal regulators finalized in 2012.
However, the road to that settlement was not smooth. According to some stockholders, the company's board of directors failed to cooperate with investigators throughout the process. A court later found that the Wells board "opposed discovery requests, filed motions to quash, and refused to provide details concerning the Company's policies," which made it hard for investors and shareholders to know what to do about the scandal.

So those shareholders sued Wells, essentially for failing to cooperate with the government over its robosigning practices. After a long battle, the bank finally agreed to settle (http://www.rgrdlaw.com/cases-wells-fargo-landmark-settlement.html) last year.

The terms mandated that the bank spend $67 million on a series of measures to repair its reputation in communities hit the hardest by foreclosures and robosigning. Enter HomeLIFT.

Under the settlement, Wells had to dedicate $36 million in homeowner assistance to cities like Fresno, Bakersfield, Detroit, Albuquerque, Virginia Beach and New Haven. It also mandated $6 million in spending for credit counseling.

The settlement made the news last year. It may not have been on the front page, but it was out there. "Wells Fargo settles remaining 'robo-signing' litigation," reported the LA Times (http://www.latimes.com/business/la-fi-wells-fargo-settlement-20140524-story.html), in one example.

Fast forward to this month. Wells Fargo, fulfilling the terms of the settlement it fought against bitterly in the lawsuit, launched down payment assistance programs in cities all over America.

In city after city, Wells executives announced their plans, then patted themselves on the back for their generosity, always neglecting to mention the Westland suit.

In the Detroit area, for instance, a Wells spokesman spoke proudly of the $5.25 million it will be spending on HomeLIFT:

"While the Wayne County economy is showing signs of improvement, many families have yet to re-enter the housing market because they struggle with making a down payment," said a seemingly empathetic Russ Cross, a Wells senior vice president.

"Combined with financial education," Cross went on, "these down payment assistance grants can make a tremendous difference for people who want to own a home in one of these five Wayne County cities."

Cross never mentioned that Wells launched HomeLIFT because it had to. The $5.25 million it spent on HomeLIFT in Detroit was exactly the number (http://www.rgrdlaw.com/cases-wells-fargo-landmark-settlement.html) mandated by the Westland settlement.

http://www.rollingstone.com/politics/news/wells-fargos-master-spin-job-20151002?page=2

[boutons_deux]

Wells Fargo To Pay $81.6M To Homeowners In Bankruptcy For Failure To Provide Payment Notices

Wells Fargo has agreed to pay $81.6 million in relief to homeowners after the bank repeatedly failed to provide them with proper legal notices during bankruptcy proceedings.

The payment is the result of a settlement between the bank and the Department of Justice’s U.S. Trustee Program over allegations that the financial institution denied homeowners the opportunity to challenge the accuracy of mortgage payment increases.

The DOJ announced the deal (http://www.justice.gov/opa/pr/us-trustee-program-reaches-816-million-settlement-wells-fargo-bank-na-protect-homeowners)Thursday, noting that the lender’s failure to give borrowers timely notice of payment hikes or reductions violated a federal bankruptcy rule aimed at ensuing proper accounting of consumers’ costs in bankruptcy.

If a borrower has filed for Chapter 13 bankruptcy protection, mortgage lenders are required to give them 21 days notice before any adjustment to their monthly payment.

Wells Fargo acknowledges that it failed to do this in a timely manner for more than 100,000 payment change notices. Additionally, the bank concedes that, between Dec. 2011 and March 2015, more than 18,000 escrow analyses involving the accounts of nearly 68,000 bankrupt homeowners were not performed as quickly as they should have been.

http://consumerist.com/2015/11/05/wells-fargo-to-pay-81-6m-to-homeowners-in-bankruptcy-for-failure-to-provide-payment-notices/

[boutons_deux]

tax lien predators

Coleman, struggling with dementia, was among those who lost a home. His debt had snowballed to $4,999 — 37 times the original tax bill. Not only did he lose his $197,000 house, but he also was stripped of the equity because tax lien purchasers are entitled to everything, trumping even mortgage companies.

http://www.washingtonpost.com/sf/investigative/2013/09/08/left-with-nothing/

[boutons_deux]

Real Estate Shell Companies Scheme to Defraud Owners Out of Their Homes

Relying on the secrecy of limited liability companies, white-collar thieves are targeting pockets of New York City for fraudulent deed transfers, leaving the victims groping for redress.

A third man, named Alex, ostensibly the boss, arrived next. He promised, Ms. Campbell said, to pay her delinquent mortgage, provide for her housing for two years, and pay her $43,800. He also hired a lawyer for her. All she had to do was sign over the deed to her house.

More than a year later, Ms. Campbell, 75, is in limbo. Her former home at 679 Jefferson Avenue is owned by an entity called Jefferson Holding LLC and she is left with her delinquent $529,000 mortgage.

“He lied,” she said tearfully of Alex in an interview at the illegally converted garage in Canarsie, Brooklyn, where she lives for now. “He said, ‘Don’t worry, Mrs. Campbell, we’re going to take care of you.’  ”

Ms. Campbell never learned Alex’s surname. And when her relatives tried to find Jefferson Holding LLC at its Great Neck, N.Y., address, there was no company there by that name.

In Bedford-Stuyvesant and other pockets of the city, white-collar criminals are employing a variety of schemes to snatch properties from their owners. Often, they use the secrecy afforded to shell companies to rent out vacated properties until they are caught or sell them to third parties. Victims are left groping for redress, unable to identify their predators or even, in some cases, to prove a crime has been committed.

Attention lately has focused on the growing use of shell companies to buy prized real estate in Manhattan and other glittering destinations for global wealth. But the stealthy practice of deed theft illustrates another way that limited liability company law used to create such entities has been twisted and stretched to conceal the ownership of real estate.

This is particularly true in Brooklyn neighborhoods where profits in the hundreds of thousands of dollars from quick turnaround sales have become common.
“Sham LLCs are a huge problem in terms of their lack of transparency, in terms of who is behind the property and who is behind these schemes,”

Coming amid waves of gentrification, the reports of deed theft have helped feed the unease felt in neighborhoods where longtime residents — blacks and Hispanics, the poor and middle class — are increasingly being priced out. A report (http://www.preventloanscams.org/newsroom/press-releases/body/Who-Can-You-Trust.pdf) last year by theLawyers’ Committee for Civil Rights Under Law (https://lawyerscommittee.org/) and the Center for NYC Neighborhoods (http://cnycn.org/) found that the schemes disproportionately affected black and Hispanic homeowners.


When LLCs are taken to court, those behind them often remain a step ahead — and impossible to find. “They’re shell companies,” said Jomo Gamal Thomas, a lawyer who has represented several deed fraud victims. “There’s no guarantee you’ll get your money back.”

THE SHELL GAME

Some schemes are particularly brazen, with thieves forging homeowners’ signatures and filing fraudulent deeds with the city to register transfers. Among the telltale signs of forgery, according to Toby M. Cohen, a Brooklyn lawyer who has represented clients attempting to reclaim stolen properties: “a deed transferred for no consideration to an LLC or a corporation and scribbled signatures you can’t read.”

http://mobile.nytimes.com/2015/11/08/nyregion/real-estate-shell-companies-scheme-to-defraud-owners-out-of-their-homes.html?_r=0 (http://mobile.nytimes.com/2015/11/08/nyregion/real-estate-shell-companies-scheme-to-defraud-owners-out-of-their-homes.html?_r=0)

[boutons_deux]

The massive real estate bubble that no one is talking abo (http://www.dailykos.com/stories/2015/11/9/1447788/-The-massive-real-estate-bubble-that-no-one-is-talking-about)ut


http://i45.photobucket.com/albums/f53/midtowng/fhfa_zpsbxsczqq5.png

http://i45.photobucket.com/albums/f53/midtowng/homeownership_zpsvukvkmds.jpg

http://i45.photobucket.com/albums/f53/midtowng/mfvalue_zpsony43ei7.png


http://i45.photobucket.com/albums/f53/midtowng/Commercialre_zpsou79mqh4.png

http://www.dailykos.com/stories/2015/11/9/1447788/-The-massive-real-estate-bubble-that-no-one-is-talking-about?detail=email

[Winehole23]

People are reconsidering their stance for two reasons. They see that Wall Street megabanks are too big to manage and too complex to regulate. Scandals–LIBOR manipulation, money laundering, robo-signing, the “London Whale,” – have shown that these megabanks are out of control. Just last week, Attorney General Holder said that our megabanks are too big to prosecute. That wasn’t his decision in isolation, but the result of counsel from the responsible agencies. And senators are hearing calls to limit the size and risk of Wall Street banks from some surprising places. When regulators like Dan Tarullo, Richard Fisher, and Tom Hoenig, and conservative thought leaders like Jon Huntsman, George Will, Peggy Noonan, and David Vitter, speak out about this issue, senators sit up and take notice.https://www.washingtonpost.com/news/wonk/wp/2013/03/09/sen-sherrod-brown-explains-why-he-wants-to-break-up-the-big-banks/

[boutons_deux]

"senators sit up and take notice"

when those regulators and "thought leaders" outspend BigFinance in donations to the Senators, the Senators might listen.

Senators are auctioned off to the highest bidder, which is always BigFinance and BigCorp.

How naive to think Senators will do ANYTHING for the 99%, for America.

[boutons_deux]

Goldman to Pay Up to $5 Billion to Settle Claims of Faulty Mortgages
http://www.nytimes.com/2016/01/15/business/dealbook/goldman-to-pay-5-billion-to-settle-claims-of-faulty-mortgages.html?partner=rss&emc=rss

[Winehole23]

The phrase "billion dollar fine" doesn't impress like it used to, even though it still signifies the capacity of great firms to elude responsibility for adopting wholesale fraud as a business model.

It boggles the mind that a company can pay so much to make legal hazard go away, and not lose its reputation and customers.

[Winehole23]

The lawlessness of the Obama Administration is very meaningfully located here. As with the robosigning issue -- which Eric Holder took a pass on to start with -- deciding not to prosecute companies that intentionally defrauded the public amounts to allowing tens of thousands of felonies to stand without anyone held responsible or any of the victims made whole. Instead, the USG pockets the fines and fraudsters get to keep their profits and their license to do business.

Steal a thousand dollars, go to prison. Steal a thousand million and settle out of court.

[boutons_deux]

The phrase "billion dollar fine" doesn't impress like it used to, even though it still signifies the capacity of great firms to elude responsibility for adopting wholesale fraud as a business model.

It boggles the mind that a company can pay so much to make legal hazard go away, and not lose its reputation and customers.

yep, only the poor and unconventionals (LGBT, non-whites, non-Christians,mentally ill, political dissenters) get punished.

America is becoming more and more ______ and ______

[Winehole23]

you're wrong about that. in this case predatory international finance has superceded the power of the USA.

[Winehole23]

our government let them fuck us and it will again.

[boutons_deux]

you're wrong about that. in this case predatory international finance has superceded the power of the USA.

predatory BigCorp is pushing hard for TPP/TTIP so they, and others, can reign sovereign over nations, eg, expansion of ISDS, being used now by Transcanada to shakedown US taxpayers for $500M because US govt decided to block a Canadian investment.

I wonder if $500M revenue for Transcanada under ISDS would be tax free in Canada.

[boutons_deux]

Authorities Reach $3.2B Settlement With Morgan Stanley

Federal and state authorities on Thursday announced a $3.2 billion settlement with Morgan Stanley over bank practices that contributed to the 2008 financial crisis, including misrepresentations about the value of mortgage-backed securities.

The nationwide settlement, negotiated by the working group appointed by President Barack Obama in 2012, says the bank acknowledges that it increased the acceptable risk levels for mortgage loans pooled and sold to investors without telling them. Loans with material defects were included, packaged into the securities and sold.

http://www.theepochtimes.com/n3/1963891-authorities-reach-3-2b-settlement-with-morgan-stanley/

[Winehole23]

foreclosure fraud still happening, despite billions in fines and promises to do better:


The California Supreme Court on Thursday ruled unanimously in favor of a fraudulently foreclosed-upon homeowner in a case that should serve as a wake-up call to state and federal prosecutors that mortgage companies continue to use false documents to evict homeowners on a daily basis.


“A homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity’s hands,” the justices wrote.


But maddeningly, practically nobody in a position of authority has stepped up to prevent those injurious invasions.


The case, Yvanova v. New Century Mortgage Corporation (http://law.justia.com/cases/california/supreme-court/2016/s218973.html), sends a powerful signal from the nation’s biggest state that the massive false document scandal, first discovered nearly a decade ago, is not over, despite mortgage company promises to the contrary.

https://theintercept.com/2016/02/19/siding-with-a-victim-of-fraudulent-foreclosure-california-court-exposes-a-failure-of-law-enforcement/

[boutons_deux]

you're wrong about that. in this case predatory international finance has superceded the power of the USA.

Of course it has. BigFinance, with unregulated capital, secret flows, has superceded all nations' laws. TPP/TTIP suppress national sovereignty even further.

[Winehole23]

BigFinance, with unregulated capital, secret flows, has superceded all nations' laws.you exaggerate a tendency. history isn't over yet.

[boutons_deux]

you exaggerate a tendency. history isn't over yet.

... show us how and who is going to reign in BigFinance and BigCorp from superceding national sovereignty.

[Winehole23]

history ain't over. I don't have a crystal ball.

do you?

[boutons_deux]

history ain't over. I don't have a crystal ball.

do you?

your position is the same a climate deniers, "climate changes", "planet used to be lot hotter, so no problem now", etc, etc.

inequality continues to increase, the 1%/BigCorp owns enough Congress people to block any progress, solutions. My crystal ball, always reasonable, looks at the recent past of 40 years, and the current, to predict we will continue on exactly the same decline for the foreseeable future.

red, slave states, gerrymandered, voter suppressed, rigged vote counting, C-U, gutted VRA, the VRWC/1%/BigCorp power/wealth bloc buying, gutting govt at Fed and state levels, all add up to everything staying bad, getting worse for the 99%.

[boutons_deux]

Yale Law Journal: “In Defense of ‘Free Houses'” (http://www.nakedcapitalism.com/2016/03/yale-law-journal-in-defense-of-free-houses.html)

The Yale Law School Journal has published a new article, “In Defense of ‘Free Houses'” (hat tip Deontos), which makes an argument that I wish had gotten an airing when the foreclosure crisis was national news. From the opening section:

When addressing faulty foreclosures, courts are afraid to bar future attempts to foreclose—that is, afraid of giving borrowers “free houses.” While courts rarely explain the reasoning behind this aversion, it seems to arise from a reflexive belief that such an outcome would be unjust.

Courts are therefore quick to sidestep well-established principles of res judicata in favor of ad hoc measures meant to protect banks against the specter of “free houses.”

This Comment argues that this approach is misguided; courts should issue final judgments in favor of homeowners in cases where banks fail to prove the elements required for foreclosure. Furthermore, these judgments should have res judicata effect—thus giving homeowners “free houses.” This approach has several benefits: it is consistent with longstanding res judicata principles in other forms of civil litigation, it provides a necessary market-correcting incentive to promote greater responsibility among foreclosure litigators, and it alleviates the tremendous costs of successive foreclosure proceedings…

So what should courts do when banks lose their foreclosure cases? As described above, one approach—that taken by the Florida and Maine Supreme Courts—is to bend the rules of res judicata to avoid a windfall for homeowners. This approach creates few benefits and significant economic problems…[We argue that further subsidizing banks’ poor litigation practices results
in deadweight loss by contributing to negative public-health outcomes and by disincentivizing banks from improving their servicing and litigation techniques. We also explain how granting winning homeowners “free houses” will not negatively affect the mortgage market.


http://www.nakedcapitalism.com/2016/03/yale-law-journal-in-defense-of-free-houses.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

So the courts protect the banks by allowing them to steal homes from citizens with faulty foreclosures, which is "just", because allowing citizens to keep their "free" homes becase when foreclosures are faulty is "unjust". :lol

[Winehole23]

David Dayen's new book about foreclosure fraud is out: http://thenewpress.com/books/chain-of-title

[boutons_deux]

How one woman beat the big banks: The amazing, true story about how Wall Street’s mortgage fraud unraveled

Sued by a giant bank, Lisa Epstein didn't have many options. Then she found the small print that changed everything

Something about the magnitude of the crisis and the constancy of voices tagging foreclosure victims like her as irresolute deadbeats made her more determined to prove everyone wrong, to keep searching until she found something she could call justice.

While running through all this, Lisa kept coming back to Count II, the “Re-establishment of Lost Note.”

A mortgage has two parts. There’s the promissory note, the IOU from borrower to lender, and the mortgage, which creates the lien on the home in case of default. Foreclosure laws vary from state to state and evolve with every court decision, but in the simplest terms, to be able to foreclose, a financial institution must hold the mortgage, the note, or both. This gives you standing, as it would in most judicial contexts: if you accuse someone of stealing your car, you’d need to establish that you actually owned it in the first place.

During securitization, mortgages were transferred from the originator through a series of intermediaries and then to the trustee, who administers the mortgage-backed trust. Lisa’s case featured three parties in all— DHI Mortgage (originator), JPMorgan Chase (depositor), and U.S. Bank (trustee)—but sometimes these deals had as many as seven or eight transfers. The securitizations included intermediaries mostly to reassure investors that they would still get payments if the originator went out of business, which actually happened quite a bit. This desire for “bankruptcy remoteness” drove securitization transfers, and it didn’t hurt that every transfer generated another fee.

At each stage there would have to be documented evidence of transfer, like links in a chain—a chain of title, which lays out the different transactions.

You can’t skip a link: the chain must show evidence of transfers from originator to depositor to trustee, and everyone in between, in precise order.

Mortgages are assigned with a signed piece of paper affirming the transaction.

Notes are endorsed the same way you would endorse the back of a check. Theoretically, the originator could endorse the note “in blank,” so that anyone in possession of the note could enforce it. But that theory ran up against the reality of the securitization agreements.
When Lisa finally found copies of the rules governing securitizations, known as the pooling and servicing agreements (PSAs), they all had roughly the same language about transfers. This comes from the prospectus of Soundview Home Loan Trust 2006-OPT2:

On the Closing Date, the Depositor will transfer to the Trust all of its right, title and interest in and to each Mortgage Loan, the related mortgage note, Mortgage, assignment of mortgage in recordable form in blank or to the Trustee and other related documents received from the Originator pursuant to the Master Agreement (collectively, the “Related Documents”). . . .

The Pooling Agreement will require that, within the time period specified therein, the Depositor will deliver or cause to be delivered to the Trustee (or a custodian on behalf of the Trustee) the mortgage notes endorsed to the Trustee on behalf of the Certificateholders and the Related Documents.


The mortgage and the note had to be physically conveyed into the trust and delivered to the document custodian, with the mortgages assigned and the notes endorsed with a wet-ink signature at every step along the way, culminating in assignments and endorsements to the trustee.

And this had to be done within ninety days of the transaction, with no grace period beyond that closing date. Only then would you have a “true sale” of the loans from originator to trustee.

Most trusts were created under New York State trust law, which is unbelievably clear. It stipulates that the pooling and servicing agreements are the governing documents.

Any transaction that doesn’t comply with the PSA is void. Failure to convey mortgages and notes would result in noncompliance.

That means the trust would be unfunded and effectively not exist. Ownership would revert back to the last verifiable owner in the chain.

And under New York law, there was no mechanism to transfer mortgages and notes after the closing date.
There are tax consequences associated with this failure as well. All securitization trusts were set up as REMICs. If the trust closed without the key documents conveyed over, those assets would not qualify for the REMIC tax exemption. They could not be added later, especially in the middle of foreclosure, because REMICs cannot acquire nonperforming assets. As a result, any income derived from the assets would get taxed, under the law, at 100 percent.

And the trustee, in Lisa’s case U.S. Bank, would not have the right to collect on the promissory note or use the mortgage lien to foreclose on the borrower. As Neil Garfield put it, “There is an 18-minute Nixonian gap in the record that cannot be cured.” Activists took to calling it “securitization FAIL.”

The prevalence of “lost” notes, including Lisa’s, created more suspicion. If the notes were safely stowed away by the trustee’s document custodian, losing them could never be an issue. One study hinted that the losses could be systemic.

Neil Garfield originally got interested in securitization FAIL after reading a November 2007 report by law professor Katherine Porter, then of the University of Iowa. Porter examined public court records in 1,733 bankruptcy cases filed in 2006.

She found near-universal disagreement between borrowers and mortgage servicers over amounts owed, with multiple instances of illegally imposed fees, including charging homeowners for ordinary office activities like delivering faxes or creating payoff statements.

But one passage leaped out at Garfield: in a majority of cases, servicers lacked one or more pieces of documentation needed to establish the validity of the debt. That included the note, which was missing over 40 percent of the time.

http://www.salon.com/2016/05/22/how_one_woman_beat_the_big_banks_the_amazing_true_ story_about_how_wall_streets_mortgage_fraud_unrave led/

my working assumption: the entirety of BigFinance is 100% corrupt, until proven otherwise.

[boutons_deux]

Bank of America $1.27 billion U.S. mortgage penalty is voided

The 2nd U.S. Circuit Court of Appeals in New York found insufficient proof under federal fraud statutes to establish Bank of America's liability over a mortgage program called "Hustle" run by the former Countrywide Financial Corp.

"The trial evidence fails to demonstrate the contemporaneous fraudulent intent necessary to prove a scheme to defraud through contractual promises," :lol

http://www.reuters.com/article/us-bank-of-america-fraud-idUSKCN0YE20S

Countrywide was so FRAUDLENT that it went bankrupt. no "intent"? :lol

The fucking judicial system is as rigged as the legislatures that rig law to protect the 1% and screw the 99%.

[boutons_deux]

The legal technicality that let BofA skate on an alleged billion-dollar mortgage fraud

(Countrywide's 'Hustle' program) was...the vehicle for a brazen fraud...driven by a hunger for profits and oblivious to the harms.

— U.S. District Judge Jed S. Rakoff


"You wonder why the American people are so cynical," he told me after the decision came down. "It's because there's an endless reservoir of ways to figure out how to hold no one accountable for illegal conduct."

Rakoff found that Countrywide/BofA set up a mortgage program known as the "High Speed Swim Lane," or "Hustle," to crank out low-quality mortgages at great speed. Under the leadership of BofA executive Rebecca Mairone, Rakoff concluded after trial, the conventional quality-control measures for mortgages were thrown out the window. (Rakoff hit Mairone with a $1-million penalty, which was also overturned by the appeals judges.)

With speed and volume taking precedence over quality, a huge percentage of these loans was destined to be lousy. Sure enough, more than 42% of the loans were "materially defective," Rakoff found. As far as Fannie and Freddie knew, however, they all still met Countrywide's contractual representation that all the loans were "investment quality."

Instead, Rakoff wrote, HSSL "was from start to finish the vehicle for a brazen fraud...driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system as a whole."

Fannie and Freddie, he concluded, "would never have purchased any loans from the Bank Defendants if they known that Countrywide had intentionally lied to them."

So how, you might ask, could Bank of America wriggle out of that one?

The judges based their ruling on the contracts that Countrywide had reached with Fannie and Freddie, pledging to provide those government-sponsored firms with "investment quality" mortgages.

There was no evidence, the appellate judges found, that the executives who signed those contracts intended at the time to stuff the pipeline with toxic junk. It just turned out that way.

Because there was no intent to defraud when the contracts were signed, the judges ruled, this whole affair is merely a case of breach of contract, not fraud. The penalties for a breach are much lower than those for fraud--often, the guilty party has to give back the money it got from breaking the contract. According to the judges' analysis, a mere breach of contract can't be elevated into a case for fraud.

Wrongdoing executive now know they only have to dredge up a preexisting contract "breached" by their behavior--since few businesses enter into contract plotting in advance to make it the vehicle for fraud, this becomes an all-purpose get-out-of-jail-free card.

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-bofa-mortgage-billions-20160524-snap-story.html

[boutons_deux]

Bank of America’s Winning Excuse: We Didn’t Mean To

A federal appeals court overturned a $1.3 billion judgement against Bank of America, ruling that good intentions at the outset shield bankers from fines for subsequent fraud.

the head of underwriting at Countrywide wrote an alarmed e-mail, with a list of questions from employees, such as,

does “the request to move loans mean we no longer care about quality?”

The executive in charge of the decision, Rebecca Mairone, replied,

“So - it sounds like it may work. Is that what I am hearing?”

To federal prosecutors—and to a jury in Manhattan—the hustle sounded like fraud. And in 2013, Bank of America, which had by then taken over Countrywide, was found liable for fraud and later ordered to pay a $1.27 billion judgment to the government.

If a entity (in this case, a bank) enters into a contract pure of heart and only deceives its partners afterward, is that fraud?
The three-judge panel’s answer was no. Bank of America is no longer required to pay the judgment.

https://www.propublica.org/article/bank-of-americas-winning-excuse-we-didnt-mean-to

BigFinance is ECSTATIC how the "judges" opened a huge gateway to systemic fraud:

BigFinance signs a contract with "pure heart" ( :lol BigFinance is with "pure heart"? :lol ) which permits systemic, unlimited fraud under the contract.

[boutons_deux]

goddam, BigFinance is polluted with criminals.

SEC Settles Fraud Charges With Mortgage Company and Executives

First Mortgage Corporation (FMC) is a mortgage lender that issued Ginnie Mae RMBS backed by loans it originated. The SEC alleged that from March 2011 to March 2015, FMC and its senior-most executives pulled current, performing loans out of Ginnie Mae RMBS by falsely claiming they were delinquent in order to sell them at a profit into newly issued RMBS.

The company caused its Ginnie Mae RMBS prospectuses to be false and misleading by improperly and deceptively using a Ginnie Mae rule that gave issuers the option to repurchase loans that were delinquent by three or more months.

According to the complaint, FMC purposely delayed depositing checks from borrowers who had been behind on their loans, falsely claiming to both investors and Ginnie Mae that such loans remained delinquent when in reality they were current.

This was done with the knowledge and approval of the company’s senior-most management. After repurchasing at prices applicable to delinquent loans, FMC was able to resell the loans into new Ginnie Mae RMBS pools at higher prices applicable to current loans for an immediate, nearly risk-free profit. Investors, meanwhile, were wrongly deprived of the erest payments on the repurchased loans.

http://247wallst.com/investing/2016/06/01/sec-settles-fraud-charges-with-mortgage-company-and-executives/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2FRyNm+%2824%2F7+Wall +St.%29

BigFinance defrauds the govt of $Ms, nobody goes to jail.

but if a Human-Amerian defrauds IRS of $Ms, then .... ?

[boutons_deux]

Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud (http://www.amazon.com/Chain-Title-Americans-Uncovered-Foreclosure/dp/1620971585/ref=sr_1_1?s=books&ie=UTF8&qid=1463160026&sr=1-1&keywords=chain+of+title)

There is a rot at the heart of our democracy, rooted in a nagging mystery that has yet to be unraveled.

It gnaws at people, occupies their thoughts, leaves them searching for answers in the chill of the night.

Americans want to know why no high-ranking Wall Street executive has gone to jail for the conduct that precipitated the financial crisis.

The oddest thing about the predominance of the question is that everyone already assumes they know the answer.

They believe that too many politicians, regulators, and law enforcement officials, bought off with campaign contributions or the promise of a future job, simply allowed banker miscreants to annihilate the law in pursuit of profit.

But they must not like the explanation very much, because they keep asking why, as if they want to be proven wrong, to be given a different story.

http://prospect.org/article/great-foreclosure-fraud

anybody need any more proof that America is fucked and unfuckable?

[boutons_deux]

How Housing’s New Players Spiraled Into Banks’ Old Mistakes

Some private equity firms that came in as the cleanup crew for the housing crisis are now repeating errors that banks committed, while others are bypassing the working poor.

When the housing crisis sent the American economy to the brink of disaster in 2008, millions of people lost their homes. The banking system had failed homeowners and their families.

New investors soon swept in — mainly private equity firms — promising to do better.

But some of these new investors are repeating the mistakes that banks committed throughout the housing crisis, an investigation by The New York Times has found. They are quickly foreclosing on homeowners. They are losing families’ mortgage paperwork, much as the banks did. And many of these practices were enabled by the federal government, which sold tens of thousands of discounted mortgages to private equity investors, while making few demands on how they treated struggling homeowners.

The rising importance of private equity in the housing market is one of the most consequential transformations (http://www.nytimes.com/2016/06/26/business/dealbook/when-you-dial-911-and-wall-street-answers.html) of the post-crisis American financial landscape. A home, after all, is the single largest investment most families will ever make.

Private equity firms, and the mortgage companies they own, face less oversight than the banks. And yet they are the cleanup crew for the worst housing crisis since the Great Depression.

Out of the more than a dozen private equity firms operating in the housing industry, The Times examined three of the largest to assess their impact on homeowners and renters.

http://www.nytimes.com/2016/06/27/business/dealbook/private-equity-housing-missteps.html?smid=tw-share&_r=0

Capitalism was created by capitalists to fuck over each over but above all to fuck over non-capitalists.

The entire BigFinance system is as 100% criminally corrupt as the corrupt political class.

[boutons_deux]

Sorry you lost your home: Americans deserve more than an apology for the foreclosure fraud epidemic

Despite talk of "recovery," former homeowners remain scarred after their government abandoned them

“I lost my home of 30 years to fraudclosure.”

“I have been fighting this bank for over five years now. I am finally losing everything to their fraud.”

I cannot convince a judge disinclined to rule in their favor, or a bank disinclined to see them as anything but a financial asset to be plucked, to change their minds.

since my book “Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud” (http://www.thenewpress.com/books/chain-of-title) came out. Hundreds of people have emailed me, sent me letters, attended my public events, to relate their personal horror stories of foreclosure and dispossession. They come from across America, from different social and economic backgrounds. Some lost everything, and some haven’t given up.

It’s impossible to expend the time and resources necessary to verify these and the hundreds of other stories I get daily. I can’t even get through all the names of these victims. But I can paint a picture of the type of people who write them, which is nothing like the one the industry frames, a tale of deadbeats and losers who miss mortgage payments and try to scam banks into acquiring a free house.

These people are meticulous. They’ve kept every scrap of paper related to their cases, probably to preserve their own sanity. They know how the law works. Their perseverance, even while recognizing the odds against them, is remarkable.

Political analysts still manage to wonder why people are angry in a time of economic recovery, without ever even hinting recognition of the scarring impact of the foreclosure disaster.

More than 9.3 million American families (http://www.wsj.com/articles/many-who-lost-homes-to-foreclosure-in-last-decade-wont-return-nar-1429548640) gave up their home between 2006 and 2014, either in a foreclosure or a short sale or some other transaction. That translates to about 14 million people, all of whom have family and friends and colleagues who at least know of the pain caused by the foreclosure crisis.

There have been more since then.

http://www.salon.com/2016/08/09/sorry-you-lost-your-home-americans-deserve-more-than-an-apology-for-the-foreclosure-fraud-epidemic/

Obama and his DoJ wouldn't dare go after corrupt, criminal, predatory BigFinance.

[boutons_deux]

DoJ Asks Deutsche Bank to Pay $14 Billion in Mortgage Settlement (http://www.nakedcapitalism.com/2016/09/doj-asks-deutsche-bank-to-pay-14-billion-in-mortgage-settlement.html)

The Wall Street Journal reported (http://www.wsj.com/articles/deutsche-bank-is-asked-to-pay-14-billion-to-resolve-u-s-probe-into-mortgage-securities-1473975404) that the Department of Justice is seeking $14 billion from Deutsche Bank to settle its claims in a series of mortgage abuses. According to the Journal, Deutsche’s position is that $2 to $3 billion as a reasonable figure. Analysts anticipated that the maximum settlement amount would be in the $4.5 to $5 billion range.

A few of the very high profile mortgage settlements have had leaks about the negotiations over the headline amount, such as the $16.6 billion Bank of America settlement for mortgage abuses. In those cases, the final amount was not terribly below the government regulators’ asking amount. One reason is that even though it’s generally understood that the government does not to devote the resources to litigating such complex cases, the flip side is that the defendant is even less able to stand the uncertainty and bad press of having talks break down and having the government move into another phase of discovery in preparation for a trial, which would be hugely damaging from a repetitional standpoint.

Nevertheless, the fact of the leak and the Journal exposing the apparently big gap between the government’s ask and Deutsche’s bid can cynically be seen as part of the negotiation theater. In some past cases like the settlement negotiations with JP Morgan, the press leak appeared to be to put pressure on the bank to be more realistic, as well as manage shareholder expectations. Here, the dynamics may be different. First, Deutsche is in a weak position politically, not just by virtue of being a foreign bank, but as being widely recognized within the financial services industry and almost certainly by regulators as being awash in managerial and internal control failures. It’s walking wounded.

http://www.nakedcapitalism.com/2016/09/doj-asks-deutsche-bank-to-pay-14-billion-in-mortgage-settlement.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

[Winehole23]

Deutche Bank only has $5.5B set aside for judgments.

[Winehole23]

it is time for an honest appraisal of one of the lingering mysteries of the financial crisis: Why were there were no prosecutions of major executives?

It’s a fair question. I believe, as discussed previously (https://www.bloomberg.com/view/articles/2014-06-06/fining-banks-is-only-half-the-job), there were 10 areas where fraud and abuse took place. These were the Mortgage Electronic Registration Systems (http://ritholtz.com/2010/10/what-is-mers-and-what-role-does-it-have-in-the-foreclosure-mess-hint-it-holds-60-of-all-mortgages-but-has-zero-employees/); mortgage pools; securitization; “misplaced” mortgage notes; force-placed insurance; servicing fees; fake documents; false affidavits, perjury and robo-signing; foreclosure mills; and active military members losing homes while on duty.


I am convinced that these cases were easy to prosecute (https://www.bloomberg.com/view/articles/2014-09-10/the-biggest-lie-of-the-new-century), that a first-year law student would have a 90 percent (http://ritholtz.com/2012/02/did-felons-get-a-free-pass-in-the-financial-crisis/) conviction rate, that the documentary evidence was overwhelming (https://www.bloomberg.com/view/articles/2014-09-10/the-biggest-lie-of-the-new-century), especially of mortgage and foreclosure fraud. As we know, there were no prosecutions of any significance -- not at the state level, not at a federal level.


After much research, I have come to believe that at the highest levels of government, the financial industry managed to convince prosecutors that it was against societal interests (http://www.thedailybeast.com/articles/2013/02/07/why-do-banks-get-away-with-murder.html) to bust bankers. The revolving door (https://www.bloomberg.com/view/articles/2015-09-10/feds-get-a-late-start-chasing-financial-bad-guys) between government and the private sector, between regulators and regulated, figures in this. If you’re a prosecutor, but you might like a big payday from business, do you really want to go hard on the companies that might offer you a job one day?

https://www.bloomberg.com/view/articles/2016-09-15/the-lehman-moment-still-is-with-us

[Winehole23]

The bigger problem has been the normalization of fraud.

[CosmicCowboy]

Deutche Bank only has $5.5B set aside for judgments.

Based on previous settlements with other banks that should be plenty.

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iiMfkFPBb2ww/v2/-1x-1.png

[Winehole23]

Bargain down from $14B. They'll meet somewhere in between.

They're gonna get slammed, they're guilty as hell.

It's not clear that their temerity of playing innocent will pass unchallenged. DB might have to concede it did something wrong and pay a historic fine.

[Winehole23]

For National Security reasons, probably, the banks were not allowed to fall on their faces and explain it to their investors. The capitalist empire par excellence in a house fire, as London Banker pointed out, cannot ever allow its system of payment to fail, so that government did what any sensible landlord would do: to save what it really cares about first. The banks and quasi-banks that oversold the bubble and normalized fraud.

[Winehole23]

http://www.spurstalk.com/forums/showthread.php?t=112785

[ElNono]

For National Security reasons, probably, the banks were not allowed to fall on their faces and explain it to their investors. The capitalist empire par excellence in a house fire, as London Banker pointed out, cannot ever allow its system of payment to fail, so that government did what any sensible landlord would do: to save what it really cares about first. The banks and quasi-banks that oversold the bubble and normalized fraud.

It wouldn't have been too difficult to frame it as a failure of capitalism. The obsession and worship of money, trumping law and order.

[Winehole23]

Trump is heavily in debt to Deutche Bank. Being POTUS would come with a number of unique conflicts of interest:


Deutsche Bank is one of the only big banks willing to work with Trump these days and has provided financing for his various real estate projects. Trump has borrowed as much as $364 million from Deutsche Bank since 2012, and all four of the outstanding loans will come due before 2024—the end of a potential second Trump presidential term.


Most other major banks stopped lending to his companies (http://www.wsj.com/articles/when-donald-trump-needs-a-loan-he-chooses-deutsche-bank-1458379806) long ago, after a number of large banks were burned when earlier Trump projects failed. If Trump becomes president, he could find himself pulled between competing priorities: protecting his relationship with the one big bank that will do business with him or punishing a major player in the financial crash.

[Winehole23]

Since 1998, Deutsche Bank has lent Trump and his organizations approximately $2.5 billion and has made loan commitments worth another $1 billion, according to the Wall Street Journal. Currently, Trump owes Deutsche Bank more than $350 million stemming from loans on properties. Some of Trump's most prized investments were built with money from Deutsche Bank, and three of his signature projects remain tied up in mortgages with the bank. For the Old Post Office project, Trump borrowed $170 million from Deutsche Bank. He has borrowed $125 million from the bank for two mortgages on his Trump National Doral golf course in Miami. For his Chicago skyscraper, he took out a loan in 2014 listed at $69 million on paperwork filed with the Cook County real estate office, although he said it was worth between $25 million and $50 million on the most recent personal financial disclosure form filed this past May.http://www.motherjones.com/politics/2016/09/donald-trump-and-deutsche-bank

[Winehole23]

beholden to a foreign bank, big real estate deal with the US Government.

lots of possibilities for a sharp operator like Trump, he'd be dumb not to consider what being POTUS could do for his businesses.

[Winehole23]

running for president has undoubtedly enhanced the Trump brand -- one wonders whether self-aggrandizement hasn't been the point all along. Trump the candidate is curiously thin on ideas.

[Winehole23]

Clinton also beholden to Deutche Bank:



The Republican National Committee reignited calls for Hillary Clinton to release details surrounding her paid private speeches to Deutsche Bank on Thursday just as the firm's New York-listed shares fell to a record low (http://www.bloomberg.com/news/articles/2016-09-29/s-p-500-futures-little-changed-after-stocks-erase-monthly-drop).


Officials from the German-bank, which U.S. regulators slapped with a massive $14 billion fine (http://www.bloomberg.com/news/articles/2016-09-28/why-people-have-been-worrying-about-deutsche-bank-in-12-charts) earlier this month, paid the Clintons $955,000 between 2012 and 2014 for a total of four speeches, according to financial disclosure records (http://www.bloomberg.com/politics/articles/2015-05-22/clinton-foundation-discloses-speech-fees).
Hillary Clinton was paid $225,000 for an April 24, 2013 speech and $260,000 for an Oct. 7, 2014 speech. Her husband was paid $200,000 for an Oct. 10, 2012 speech and $270,000 for a speech he gave on Aug. 27, 2014.

http://www.bloomberg.com/politics/articles/2016-09-29/republicans-slam-clinton-for-deutsche-speeches-as-firm-slumps

[boutons_deux]

Mnuchin's "bank" absolutely STOLE homes through fraudulent foreclosures

Treasury Nominee Steve Mnuchin’s Bank Accused of “Widespread Misconduct” in Leaked Memo (https://theintercept.com/2017/01/03/treasury-nominee-steve-mnuchins-bank-accused-of-widespread-misconduct-in-leaked-memo/)

https://theintercept.com/2017/01/03/treasury-nominee-steve-mnuchins-bank-accused-of-widespread-misconduct-in-leaked-memo/

"misconduct" :lol how about WIDESPREAD, SYSTEMATIC CRIMES?

[boutons_deux]

Moody’s Hit With $864M Penalty For Role In Mortgage Meltdown

the Justice Department and attorneys general for 21 states (and don’t forget D.C.) announced a settlement with Moody’s Analytics worth around $864 million, resolving a federal investigation into the company’s complicity in the massive financial crisis.

At the heart of the DOJ investigation were allegations that Moody’s was gave overly positive ratings to mortgage-backed securities and other financial products out of fear that providing honest ratings would result in banks and lenders taking their business elsewhere.

Even though Moody’s has long acknowledged that there is an inherent conflict of interest in being paid by the same financial institutions that are asking you to rate their securities, the company maintained throughout the bubble era that its ratings were based primarily on expected loss and probability of default.

“Investors relied on Moody’s credit ratings to be objective and independent, and they naturally expected Moody’s to follow its own published methods,” says Benjamin Mizer, head of the DOJ’s Civil Division.

However, the DOJ investigation into these ratings concluded that Moody’s was not living up to its own promise to provide accurate feedback on these securities.

“Moody’s failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession,” said Principal Deputy Associate Attorney General Bill Baer in a statement.

According to the DOJ, Moody’s has admitted to failing to disclose to the public that it deviated from its own standards. As a result, investors were misled into believing that these securities were low-risk.

Moody’s $864 million total payout is significant, but pales in comparison to penalties paid by others involved in the mortgage meltdown. In 2015, Moody’s competitor Standard & Poor’s had to pay $1.5 billion to close the book on similar allegations.

For its part, Moody’s maintains this is no big thing and the settlement is a solid business decision.

https://consumerist.com/2017/01/13/moodys-hit-with-864m-penalty-for-role-in-mortgage-meltdown/

As Robert Reich says, BigFinance's business model is based on cheating, fraud, theft, crime.

[boutons_deux]

Deutsche Bank signs $7.2 billion deal with U.S. over risky mortgages

http://www.reuters.com/article/us-deutsche-bank-mortgage-settlement-idUSKBN1512UC?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F +US+%2F+Top+News%29

[Winehole23]

on his way out the door, Obama plants a big wet one on hedge fund slumlords: Fannie Mae will now back up to $1B in MBS losses for Blackstone.


Invitation Homes, the 2012 buy-to-rent creature of private-equity firm Blackstone, and now owner of 48,431 single-family homes, thus the largest landlord of single-family homes in the US, accomplished another feat: it obtained government guarantees for $1 billion in rental-home mortgage backed securities.


The disclosure came in an amended S-11 filing (https://www.sec.gov/Archives/edgar/data/1687229/000119312517014636/d260125ds11a.htm) with the SEC on Monday in preparation for Invitation Homes’ IPO. Invitation Homes bought these properties out of foreclosure and turned them into rental properties, concentrated in 12 urban areas. The IPO filing lists $9.7 billion in single-family properties and $7.7 billion in debt.


Some of this debt will be refinanced with the proceeds from the sale of the $1 billion of government-guaranteed rental-home mortgage backed securities.


The government agency that has agreed to guarantee the “timely payment of principal and interest” of these “Guaranteed Certificates,” as they’re called, is Fannie Mae, one of the government-sponsored entities (GSE) that has been bailed out and taken over by the government during the Financial Crisis.


This is the first time ever that a government-sponsored enterprise has guaranteed single-family rental-home mortgage-backed securities, issued by a huge corporate landlord. It’s an essential step forward in financializing rents: taxpayer backing for funding the biggest landlords.
http://wolfstreet.com/2017/01/24/us-government-fannie-mae-guarantees-rental-home-mortgage-backed-securities-blackstone-invitation-homes-win/

[Winehole23]

mere moments after the US levies a $1B fine against Wells Fargo for mortgage and insurance shenanigans, it's under scrutiny for shady 401k dealings:

https://www.mpamag.com/news/another-investigation-for-wells-fargo-99106.aspx

[RandomGuy]

mere moments after the US levies a $1B fine against Wells Fargo for mortgage and insurance shenanigans, it's under scrutiny for shady 401k dealings:

https://www.mpamag.com/news/another-investigation-for-wells-fargo-99106.aspx

Wells Fargo does not appear to be a viable brand anymore. The ship has passed the point where the bilge pumps can keep up with the incoming water, IMO.

[boutons_deux]

Wells Fargo does not appear to be a viable brand anymore. The ship has passed the point where the bilge pumps can keep up with the incoming water, IMO.

do you think retail customers, considered by the banks to be effectively "captured" due to the hassle of changing banks, in any significant %age will transfer to other banks?

[Winehole23]

Jerry Brown nicked $331M intended for Californians who suffered foreclosure -- today a judge ordered California to pay it back


The money was “unlawfully diverted” from a settlement fund that was designated for programs directly assisting homeowners, the Third District Court of Appeal in Sacramento said Tuesday. (http://www.courts.ca.gov/opinions/documents/C079835.PDF)

https://www.sfchronicle.com/business/article/California-ordered-to-restore-331-million-to-13067597.php

[spurraider21]

jerry brown is a POS tbh

[Chucho]

jerry brown is a POS tbh

Det surplus and balanced budget, tho.


Imagine if he was a Repub tho... He'd make heads explode.

[Winehole23]

another $3B dollar fine for Wells Fargo:


The civil fine is for alleged origination and sale of residential mortgage loans that the lender knew contained misstated income information and did not meet the quality that Wells Fargo represented, the U.S. Department of Justice said in a statement here (https://www.justice.gov/usao-ndca/pr/wells-fargo-agrees-pay-209-billion-penalty-allegedly-misrepresenting-quality-loans-used) on Wednesday.https://www.nakedcapitalism.com/2018/08/links-8-2-18.html

[RandomGuy]

Trump is heavily in debt to Deutche Bank. Being POTUS would come with a number of unique conflicts of interest:

Eyup. Deutsche Bank being the bank of choice for certain oligarchs...

[RandomGuy]

do you think retail customers, considered by the banks to be effectively "captured" due to the hassle of changing banks, in any significant %age will transfer to other banks?



The bank also reported shrinking loan balances and deposits. It held loans totaling $944 billion at the end of the quarter, down $3 billion from the end of the prior quarter, with declines in both consumer and commercial loans. Deposits fell by nearly $26 billion to $1.3 trillion.
http://www.latimes.com/business/la-fi-wells-fargo-earnings-20180713-story.html

I think they have slowly been hemorrhaging deposits, yes.

[Winehole23]

eh, we knew he was crooked when we elected him.

the US Congress is spineless, the thing to do is vote him out of office in 2020.

[RandomGuy]

https://finance.yahoo.com/quote/WFC/balance-sheet?p=WFC

Not per their balance sheet. Wells fargo is fine.

[RandomGuy]

another $3B dollar fine for Wells Fargo:

https://www.nakedcapitalism.com/2018/08/links-8-2-18.html

Liar loans.

https://www.slideshare.net/guestd5ab54/the-subprime-primer
(slideshow, financial crisis explained by stick figures, funny)

[boutons_deux]

Eyup. Deutsche Bank being the bank of choice for certain oligarchs...

DB lent Trash several $100Ms. I wonder if DB was laundering for the Russians?

[boutons_deux]

Wells Fargo blames 'computer glitch' for hundreds of customers lost homes (https://www.dailykos.com/stories/2018/8/6/1786260/-Wells-Fargo-blames-computer-glitch-for-hundreds-of-customers-lost-homes)

Wells Fargo has shown over the past couple of years, what unregulated, untethered, fully empowered greed will do for consumers.

Fraud. Lots and lots of fraud. (https://www.dailykos.com/stories/2018/4/20/1758616/-Wells-Fargo-to-pay-a-1-billion-fine-after-fraudulently-scamming-customers) According to CNN,

Wells Fargo made a little “regulatory filing” this past week explaining

it had set aside $8 million for “customers affected by the glitch.”

What’s that “glitch?”

Oh, nothing really, just people losing their homes. (https://money.cnn.com/2018/08/04/news/companies/wells-fargo-mortgage-modification/index.html)

About 625 customers were incorrectly denied a loan modification or were not offered one even though they were qualified, according to the filing. In about 400 cases, the customers were ultimately foreclosed upon.

Wells Fargo said in a statement that
it was "very sorry that this error occurred" and said it was "providing remediation" to the affected customers.


When you consider that Wells Fargo seems to have

perpetrated fraud across virtually every aspect of their lending operation (https://www.dailykos.com/stories/2017/8/4/1686951/-Wells-Fargo-caught-signing-up-490-000-people-for-car-insurance-they-didn-t-need);

it’s hard to imagine what

Wells Fargo’s business model is except perpetrating frauds on consumers.

https://www.dailykos.com/stories/2018/8/6/1786260/-Wells-Fargo-blames-computer-glitch-for-hundreds-of-customers-lost-homes?detail=emaildkre

[Winehole23]

a long read, but the con was complex.

here's a deep dive on the bailout of the financial sector that followed the epochal bust of 2008:

https://syntheticassets.wordpress.com/2018/09/16/why-claims-that-the-2008-bailout-was-a-success-should-make-you-angry/

[Winehole23]

what was going on in 2007 and 2008 is that the market was recognizing that the “Non-Agency MBS” in the chart below (http://www.housingwire.com/2010/04/07/deutsche-bank-says-gses-and-ginnie-dominate-mortgage-funding/) was going to perform very badly, because it was so full of loans that should never have been made.

https://syntheticassets.files.wordpress.com/2018/09/collapse-of-plmbs.png?w=840
In many cases the originators who were theoretically on the hook for the reps and warranties they had made when they sold the loans to Wall Street had been driven into bankruptcy by – you guessed it – claims based on their reps and warranties. The bag they had in theory been holding had most definitely been passed on to someone else, but it wasn’t clear yet to whom. The obvious candidate was the issuers who had packaged these loans – with utterly inadequate due diligence – into securities for investors to buy. The catch was that the issuers were all the big banks: Bank of America, JP Morgan Chase, Citibank, Goldman Sachs, etc.

And we had financial regulators who were like deer in the headlights, transfixed by terror, when they heard that one of the big retail banks might be in danger. These regulators threw themselves headlong into the project of rescuing the big banks from their failure to perform the due diligence necessary to issue mortgage-backed securities according to the terms in their securities documentation. While I suspect that Ben Bernanke never quite wrapped his head around these issues (he had plenty of other things to worry about), it seems fairly clear that Hank Paulson and Timothy Geithner worked consciously to “save the financial system” by hiving loans that should never have been made off onto the Government

[Winehole23]

David Dayen, who wrote "Chain of Title", is one of the best commentators on the 2008 financial panic:


What Terrie later found out from her lawsuit is that Wells Fargo had already told the investor in the loan, Fannie Mae, that they would be foreclosing on the house, despite the fact that she was current on the mortgage at the time. The bank conducted four hard credit checks to take Terrie’s credit score down to 660, making her ineligible for alternatives like refinancing. The whole thing was a pretext, using a government mortgage program to trap the borrower and capture the home.


Fannie Mae actually extended a loan modification offer to Terrie, which Wells Fargo never let her see. Instead, Wells Fargo gave her a “special forbearance” agreement, allowing her to freeze payments for a trial period. But Wells Fargo never made the modification permanent, asking her for the skipped mortgage payments after the trial period ended. Terrie pre-emptively sued Wells Fargo in 2011, the bank took her to court for foreclosure, and three attorneys later, she’s still locked in battle.


Terrie has been telling this story (http://stopforeclosurefraud.com/2014/11/06/press-release-wells-fargo-made-false-statements-of-material-fact-to-fannie-mae/) for years, and it’s at once unique and totally normal activity (https://www.sigtarp.gov/Audit%20Reports/NPV_Report.pdf) during the foreclosure crisis. Rampant fraud plucked homes from millions of borrowers who encountered struggle through no fault of their own and tried to do the right thing.
http://inthesetimes.com/working/entry/21440/financial_crisis_lehman_brothers_anniversary

[boutons_deux]

Is there a solution to Capital's oppressive, extractionary, criminal hold on the USA?

[Winehole23]

Barry Ritholz nets out the biggest misconceptions about the bust:

https://www.bloomberg.com/view/articles/2018-09-14/ten-misconceptions-about-financial-crisis-on-10-year-anniversary

[Winehole23]

finger pointed at Tim Geithner:


Failing to hold anyone accountable for causing the Great Recession as the economy struggled to regain its footing generated significant public resentment, from the Tea Party on the right to Occupy Wall Street on the left. The same urgency and ingenuity was simply not adopted (http://prospect.org/article/needless-default) to save homeowners drowning in mortgage debt, which weighed down the overall recovery. Obama fired the CEO of GM (https://nypost.com/2009/03/30/obama-fires-gm-boss/), but no bank executive suffered for a moment. And people noticed.

The statistics of the era speak to this inequity. In Obama’s first term, the top one percent took more than all of the gains (https://eml.berkeley.edu/~saez/saez-UStopincomes-2011.pdf) from the economy after the crisis. Meanwhile, at least 9.3 million families (https://www.wsj.com/articles/many-who-lost-homes-to-foreclosure-in-last-decade-wont-return-nar-1429548640) lost their homes to foreclosure due to the mortgage meltdown. For many Americans, the financial and psychological damage will be lifelong (https://www.wsj.com/articles/the-recessions-economic-trauma-has-left-enduring-scars-1462809318). But banks weathered the storm well, and this year posted record profits (https://money.cnn.com/2018/05/22/investing/banks-record-profits-fdic-deregulation-bill/index.html).

Propping up the existing system instead of overhauling it made it easier for Big Finance to pull off its comeback. Geithner’s stress tests are now seen as weak and easily gamed; Summers recently called them “comically absurd (https://www.bloomberg.com/news/articles/2018-09-08/larry-summers-calls-latest-fed-bank-stress-test-results-absurd).” Banks like Wells Fargo continue to break the law with impunity (https://www.wsj.com/articles/justice-department-probing-wells-fargos-wholesale-banking-unit-1536244490?tesla=y), because virtually nothing is done to them when they get caught. A shocking number of those who wrote the Dodd-Frank financial reform now work for the financial firms (https://www.washingtonpost.com/business/economy/many-lawmakers-and-aids-who-crafted-financial-regulations-after-the-2008-crisis-now-work-for-wall-street/2018/09/07/50f63a1e-b075-11e8-a20b-5f4f84429666_story.html?utm_term=.d1addae3a0a5) succeeding at chipping away at it, including Geithner himself, who now runs a private equity firm that owns a predatory lender (https://www.washingtonpost.com/business/economy/a-way-of-monetizing-poor-people-how-private-equity-firms-make-money-offering-loans-to-cash-strapped-americans/2018/07/01/5f7e2670-5dee-11e8-9ee3-49d6d4814c4c_story.html).https://newrepublic.com/article/151159/tim-geithner-resistance-inside-obama-administration

[Winehole23]

what’s important to understand is that the financial crisis was a full-scale assault on the longstanding social contract linking Americans with the financial system through their house.

The way Geithner orchestrated this was through a two-tiered series of policy choices. During the crisis, everyone needed money from the government, but Geithner offered money to the big guy, and not the little guy. First, he found mechanisms, all of them very technical—and well-reported in Adam Tooze’s new book Crashed (https://www.nytimes.com/2018/08/08/books/review-crashed-financial-crisis-adam-tooze.html)—to throw unlimited amounts of credit at institutions controlled by financial executives in the United States and Europe. (Eric Holder, meanwhile, also de facto granted legal amnesty (https://www.vice.com/en_us/article/ppmm39/wall-street-criminals-are-still-a-protected-class-in-america-808) to executives for possible securities fraud associated with the crisis.) Second, Geithner chose to deny money and credit to the middle class (http://prospect.org/article/needless-default) in the midst of a foreclosure crisis. The Obama administration supported this by neutering laws (http://www.creditslips.org/creditslips/2012/02/the-servicing-settlement-banks-1-public-0.html) against illegal foreclosures.


The response to the financial crisis was about reorganizing property rights. If you were close to power, you enjoyed unlimited rights and no responsibilities, and if you were far from power, you got screwed. https://www.vice.com/en_us/article/gynbw9/the-bailouts-for-the-rich-are-why-america-is-so-screwed-right-now

[Winehole23]

crimes were committed:


1. Prosecutors were terrified: I have said (http://ritholtz.com/2013/11/meet-uncle-sam-your-partner-in-crime/) this before (http://ritholtz.com/2014/04/the-broken-sec-enforcement-mechanism/), but it is worth repeating:


“The greatest innovation of the financial sector is not the ATM machine or interest-bearing checking accounts or securitization: It was convincing the powers that be that prosecuting them for their actual crimes would bring the economy to the edge of the abyss.”



During the crisis and its immediate aftermath, the idea that enforcing the law would somehow have an economic impact scared the living hell out of Department of Justice prosecutors, local U.S. Attorneys, and even State Attorneys General. Prosecute the banks and/or their executives, went the claim, and the entire system would crash again – and right after we spent all that money bailing them out!


But you know what? That decision (http://ritholtz.com/2014/05/finances-greatest-innovation-dont-prosecute-us/) is not the jurisdiction of Prosecutors. It is nottheir jobs to pass judgment about potential economic impacts indictments might have. They lack the expertise to asses and analyze that — and, as it turned out, so did the people making those claims. But they successfully bamboozled the prosecutors into ignoring their oaths of office. The proper job of prosecuting attorneys is to identify and prosecute crimes, not play macro-tourist in the field of crisis-economics.



While I was researching and writing Bailout Nation (https://www.amazon.com/exec/obidos/ASIN/0470596325/thebigpictu09-20), it was apparent to me that there was abundant AND systemic criminality7 across four broad categories:


Mortgage underwriting: There were obvious crimes committed in mortgage underwriting, where defects were knowingly ignored (http://www.ritholtz.com/blog/2013/01/why-the-banks-were-thrilled-about-the-latest-8-5b-settlement/). The FBI investigated (http://www.fbi.gov/about-us/investigate/white_collar/mortgage-fraud/mortgage_fraud) these cases early on, but investigators never moved forward with prosecutions.
Perhaps the scale of the financial penalties bank agreed to pay had something to do with this inaction. Keefe, Bruyette and Woods, tallied the financial-crisis related regulatory penalties (http://marketwatch.com/story/banks-have-been-fined-a-staggering-243-billion-since-the-financial-crisis-2018-02-20) — the total was a “staggering $243 billion.”


Accounting fraud: We could spend months discussing how some executives at banks cooked their books (http://online.wsj.com/article/SB10001424052702304830104575172280848939898.html?m od=WSJ_Markets_MIDDLETopNews), but look no further then Lehman Brother’s infamous Repo 105. That was a textbook example of defrauding the investing public by hiding the conditions of your insolvency.


Insider Trading: Take a close look at insider stock sales during the period right before the crisis. Sure seems like a lot of selling an a hurry . . . I wonder why?
David DeBoskey, a San Diego State University professor of Accountancy (and a KPMG Faculty Fellow), found total compensation (http://ritholtz.com/2013/09/the-false-crisis-narrative-persists/) for top executives at just 4 of the firms that collapsed – Lehman, AIG, Fannie Mae and Freddie Mac – was in excess of $1.4 billion dollars from 2003 to 2007 (http://usatoday30.usatoday.com/money/companies/management/2008-09-28-executive-pay-ceo_N.htm).8 That much stock being sold before share prices collapsed was apparently a mere coincidence.9

Foreclosure fraud: There was a huge paper train showing fabricated documents, falsified paperwork, and other perjury. Of all the crimes committed duri
ng the financial crisis and in its aftermath, this is one that should have been the easiest to identify and prosecute.

http://ritholtz.com/2018/09/crimes-were-committed/

[Winehole23]

Bank CEO Compensation, Pre Crisishttp://ritholtz.com/wp-content/uploads/2018/09/Screen-Shot-2018-09-09-at-3.31.49-PM-1024x603.png (http://ritholtz.com/wp-content/uploads/2018/09/Screen-Shot-2018-09-09-at-3.31.49-PM.png)

[Winehole23]

I miss coyotes_geek


Yep. Just get what money you can out of the banks as fast as you can and dispense it to as many people......errr....voters as you can.

It's a settlement for illegally forclosing on people. Yet the people who actually got illegally foreclosed on only get a $2,000 check and a bunch of people who were not illegally foreclosed on get principal writedowns and refi's? Looks to me like the deal is to write down mortgages at the expense of people who were illegally foreclosed on.

[Winehole23]

Michael Hudson squarely blames Obama for the failure of the economy to recover (for the 90%) after 2008:


President Obama doublecrossed his voters and said, I’m not representing you, I’m representing my donors. He invited the bankers to the White House and said, don’t worry, folks, I’m the only guy standing between you and the mob with pitchforks. Just like Hillary called Donald Trump supporters “deplorables,” he called his supporters the mob with pitchforks. And he stuck it to them.


In my book Killing the Host you have Barney Frank saying that he got the agreement of Secretary of the Treasury Hank Paulson to write down the mortgages to realistic charges: namely, number one, what the mortgage borrowers could afford out of their income, and number two, the carrying charge of the mortgage would be the going rent rate, which is what mortgages historically have tended to approximate.


Obama said, no, I’m representing the bankers, not the debtors. He appointed bank lobbyists such as Tim Geithner as Secretary of the Treasury. Obama basically followed everything that President Clinton’s Secretary of the Treasury Rubin recommended to him. He was handed a list of the people that Wall Street wanted to appoint. And then he washed his hands of it. Instead of doing what normally happens in a crisis – writing down the debts, and writing off the bad savings and the bad loans as a counterpart to the debts, and taking over the insolvent banks – he kept the bad debts on the books.
https://www.nakedcapitalism.com/2018/09/michael-hudson-10-years-since-lehman-brothers-bankruptcy-did-the-economy-really-recover.html

[Winehole23]

There was a big argument in the administration. Surprisingly enough, the good guys were the Republicans in this. Sheila Bair was a Republican from the Midwest, and she said, look, Citibank is not only insolvent, it’s a basically a financial fraud organization. We should take it over. It doesn’t have any money. But Obama said, wait a minute, Geithner is a protege of Rubin, and he’s become head of Citigroup. We’ve got to bail out Citigroup. So what Obama did was take the banks that have been the most fraudulent, that have paid the largest amount of civil fines for financial fraud, and said, these are the banks we want to be the leaders. We’re going to make them the biggest banks, and we’re going to make them stronger. And we’re not going to forgive any loans. We’re going to leave the loans in place, unlike what’s happened for the last few hundred years and crashes.

So this crash of 2008 was not a crash of the banks. The banks were bailed out. The economy was left with all the junk mortgages in place, all the fraudulent debts. Then, to further help the banks recover, the Federal Reserve came in and pushed quantitative easing, lowering the interest rates so much that banks could make the widest profit they ever made in history – the margin between the lending rate on mortgages, 5-6 percent; student loans, 9 percent; credit card loans, 11-29 percent; and the banks’ borrowing charge, which is 0.1 percent. The banks became enormous profit centers, leading the stock market gains.

[Winehole23]

Quantitative easing occurs when the Federal Reserve spent $4.3 trillion on buying the bad debts and the bank assets and creating bank reserves. Essentially it’s like printing money. You’ve heard the phrase ‘money-dropping helicopters.’ But the helicopters only fly over Wall Street. So the Federal Reserve created $4.3 billion on the accounts of the banks, and let the banks get through the fact that they’d made recklessly bad loans and suffered reckless losses. Sheila Bair, in her autobiography, wrote about how Citibank was the most mismanaged bank in America. Not quite as fraudulent as Countrywide or Bank of America, but simply incompetent by making bad gambles under Prince, who ran the thing. They were bailed out and then subsidized. The larger the fines for fraud, the more subsidy they got and the bigger they grew. Crime pays.

[Winehole23]

what Hudson is talking about here isn't so radical. it's essentially how we dealt with the S&L crisis in the 1990s


The federal government could have bought the junk mortgage loans in default for maybe a quarter of the value. Let’s say 25 percent, $25,000 for a $100,000 junk mortgage. This is essentially what Blackstone Realty did, and what private equity people did, buying foreclosed properties. The government could have bought from the banks their bad loans. And instead of foreclosing, they’d write down the loans to the realistic market price that the market was pricing the property and the loans at. The inflated housing prices would have been recalculated at the market rate. There would be a lower mortgage, there would be lower interest rates and no penalty payments.


This $4.3 trillion could have spurred an enormous takeoff. It could have left the 9 million families that were evicted in place. It could have kept the housing prices low for the country. It could have kept the purchasing power of homeowners available to be spending on goods and services. And the economy would have recovered instead of stagnating. That wasn’t done because the financial sector was running the Democratic Party’s policy and politics, not the voters.

[Winehole23]

what was rescued was the volume of debt, instead of writing it down like you did in the 1930s.


So essentially we’re not in a recovery at all. We can’t get into recovery until you write down the debt. Otherwise you’re going to have the economy looking like Greece. You’re going to have austerity. Basically we’re on an austerity budget now, not so much because of tax policy but because of the debt overhead that is owed to the banks and other major creditors.

[Winehole23]

this is a pretty good nutshell of predatory capitalism:


Debt grows exponentially. The interest charges grow year after year. If you have a savings account you can see it mount up, like if you have a retirement account you’ve seen the stocks go up. If you have it in bonds you see those go up. But the economy doesn’t go up anywhere near as much as the stock market. That means that the financial sector and the debt volume grows much faster than the economy can grow. So people – the economy, families – have to spend more and more of their money every month on their mortgage debt for housing, on their credit card debt, on their student loan debt, on their automobile debt, and also in health insurance. They have less and less money to spend on goods and services.


So the starting point should be how are we going to bring the debt payments back in line so that the economy has room to grow? The only way to do this in any society is by writing down debt. Germany did that in 1948 with its economic miracle. They wrote down nearly all the domestic debt. Normally the function of a crisis like the Great Depression is to wipe out the bad debts. But when you wipe out the debts, you wipe out the savings, mainly of the One Percent. And the question is, who is the government going to make its policy for? The one percent of creditors, or the 99 Percent that the One Percent holds in debt?


Well, obviously the One Percent is the donor class, and they’re writing the laws. The result of their leaving this debt in place is a rising debt-income ratio. That is, the proportion of corporate earnings that has to pay for debt service has been soaring because corporate raiders have gone to the banks, borrowed money and taken over corporations. Instead of using the corporate earnings to invest in more equipment, they’ve bought their own stock by stock buybacks that push up stock prices instead of investing.


So the financial management philosophy that we have is diametrically opposed to what’s needed for economic growth. That should be what people are talking about, because more and more economists are warning that given the rising debt ratios, there’s going to be another crisis. What we should be talking about when we look back on the anniversary of Lehman’s bankruptcy is how to handle the next crisis in a way that doesn’t bail out banks, that bails out the economy by writing down the debts.


If banks have bad debts, they’ve made bad loans. Banks used to be conservative and prudent. But if they make imprudent loans and they say, we don’t care the borrower can’t pay because we’ve sold the whole loan off to a pension fund or a German Landesbank, and somebody else is going to take the loss, you have to restructure the banking system and the financial management, and take it out of the hands of bankers to manage.


If you leave the Treasury Department and the Justice Department and the bank regulators in the hands of bankers, they’re going to loot the rest of the economy. They’re going to take everything they can. So you want someone who’s not a banker to actually do the regulation.


But how are you going to get such a group? Well, you have people like Paul Krugman who came out on the anniversary saying, debt is not the problem. He that the people are all wrong, they’re nutty to believe that debt’s the problem. All we need to do is run a bigger budget deficit, so that we can spend money into the economy to make it grow enough so that the home owners and workers will have enough extra money to be able to pay this exponentially growing debt. In other words, the whole economy should be run in order to enable it to pay off debt that it’s run up.


This is crazy. The economy should be run to help people’s living standards, not to help the bankers and the one percent who own the banks, the bondholders.

[DMC]

I know someone who went for a home loan on a new house. They didn't qualify under normal conditions, because their debt to income ratio was too high. However the builder offered to put 10K into the bank account of the buyer and jack the price up 10K, then ask for 10K as a down payment. The buyer wouldn't have had the money on record to pay the increased down payment required to overcome the debt to income ratio issue. In order for this to work, the money would have to go through another account and be transferred by someone other than the builder. The builder said they do this all the time with the banks to qualify people for loans.

This kind of shady shit happens everywhere from car dealers to home builders. Even Wells Fargo creates fake accounts to meet stupid quotas and bonus goals that rarely if ever take into account the long term effect. Car dealers don't get penalized if someone defaults on their loan because creative jargon and paperwork qualified them. Same with student loans for people who are taking classes that don't equate to marketable skills, or people who are dating buying homes with joint income totals as if they are roommates. It's the USA. Everyone "deserves" a standard level of living, and that standard includes owning a home, 2 cars and taking vacations to places they cannot afford...oh and having 2 or 3 kids as well as a bunch of dogs. If you don't allow them to have this, you're an elitist and you're the problem.

[Winehole23]

recurring to the topical emphasis, if shareholders or bondholders had had to pay for all the crappy loans, there'd be a rational basis now not to do it again.

instead of letting irresponsible lenders crap out, the USG saved them then and implicitly backstops them now.

so then, the rational calculation based on self-interest is to repeat the cycle.

[Winehole23]

Adam Tooze and Qunin Slobodian reviewed here:

https://bookforum.com/inprint/025_03/20170

[Winehole23]

In an unprecedented and underappreciated move that Crashed sheds important light on, in the months after the 2008 crisis the Federal Reserve essentially turned itself into the lender of last resort not just to American banks, but to almost the entire global banking system. This lending spree meant virtually every European country was reliant on the fire hose of American-issued money. “The foundation of the global dollar was the private banking and financial market network, materialized in the Wall Street–City of London nexus,” Tooze writes. If the US was the one making these new rules, it found plenty of desperate adherents in the private sector who did not think to complain. “This was a cocreation of American and European finance, deliberately erected beyond state control.”

Despite the perception that neoliberal ideologies are about restraint and austerity, when the system was under siege “we lived in an age not of limited but of big government . . . of interventionism that had more in common with military operations or emergency medicine than with law-bound governance.” What the financial industry demanded “was the mobilization of all of the resources of the state to save society’s financial infrastructure from a threat of systemic implosion.” The result of this mobilization was bailing out banks and letting ordinary people suffer. Freedom was never free. It came explicitly at the expense of justice. Just as Slobodian’s neoliberal economists had imagined, there was no friction between the state and the global financial order—only complicity from the top down and the bottom up.

[Winehole23]

Michael Hudson squarely blames Obama for the failure of the economy to recover (for the 90%) after 2008:

Adam Tooze points out that the USA is still recovering from two recessions:

1068912612560130049

[boutons_deux]

When establishment Dems like "progressive" Obama (or it could have been Hillary, equally) prioritize the oligarchy/BigFinance over citizens, then all y'all should admit that

America is fucked and unfuckable.

"both sides" are pro-oligarchy, with Dems making head feints like ACA.

I don't expect Dem Congress, esp under millionaire Pelosi, even try to do anything progressive (they would be blocked anyway by the Repug Senate)

[boutons_deux]

Repeated errors cost hundreds of people their homes—now Wells Fargo wants to buy their silence (https://www.dailykos.com/stories/2019/1/2/1823002/-Repeated-errors-cost-hundreds-of-people-their-homes-now-Wells-Fargo-wants-to-buy-their-silence)

A class-action lawsuit alleges that Wells Fargo screwed up the same exact way almost 900 times, costing over 500 people their homes. (https://www.latimes.com/business/la-fi-wells-fargo-mortgage-modification-20190101-story.html)

As with most of Wells Fargo’s previous “errors” that caused widespread devastation,

the horse-and-wagon bank has made an insufficient attempt to make good with its victims by pleading ignorance and

throwing not nearly enough money at the problems it created.

Wells Fargo says an internal review found the bank denied help to hundreds of homeowners after fees charged by foreclosure attorneys were improperly used when the bank determined whom to offer mortgage help.

The computer error began in 2010 and was not corrected until last April, the bank said.


Overall, 870 homeowners were denied help for which they qualified, including 545 who lost their homes to foreclosure.

Wells Fargo says it has reached most of the customers affected and set aside $8 million to compensate them, though industry analysts say that number is likely to increase.



In the race to the bottom for Worst Major Bank In America, Wells Fargo has long been a frontrunner.

The nation’s fourth largest bank, founded in 1852 by the same fellas who brought the world American Express, appears to be made of rubber and corruption (and a seemingly endless well of money set aside for punitive fines). How else can NRA-preferred (https://www.latimes.com/business/la-fi-wells-fargo-guns-20180307-story.html) Wells Fargo continue to bounce back

after being caught in scandal (https://www.usatoday.com/story/money/2016/09/08/wells-fargo-fined-185m-over-unauthorized-accounts/90003212/)
after scandal (https://www.cnbc.com/2018/04/26/labor-department-is-investigating-wells-fargos-401k-unit-wsj.html)
after scandal (https://money.cnn.com/2018/05/17/news/companies/wells-fargo-alter-documents/index.html)
after scandal (https://www.nytimes.com/2009/06/07/us/07baltimore.html)
after scandal (https://www.reuters.com/article/us-wells-credit-settlement/wells-fargo-to-pay-4-million-for-violations-on-credit-card-accounts-new-york-idUSKBN0L92C720150205)
after scandal (https://www.reuters.com/article/us-wellsfargo-settlement-idUSKBN12V27F)
after scandal (https://www.cnbc.com/2018/08/31/wells-fargo-investigating-reports-of-gender-bias-in-wealth-division.html)
after scandal (https://www.wonkette.com/wells-fargo-still-pretty-evil)
after scandal (https://money.cnn.com/2017/11/14/investing/wells-fargo-repossess-cars-military/index.html?sr=twCNN111417wells-fargo-repossess-cars-military0537PMStory)
after scandal (https://money.cnn.com/2018/08/01/investing/wells-fargo-settlement-mortgage-loans/index.html)
after scandal (https://money.cnn.com/2018/07/19/news/companies/wells-fargo-pet-insurance-refund/index.html?iid=EL)
after scandal? (https://populardemocracy.org/sites/default/files/20180427%20CBOH%20Digital.pdf)

How, exactly, does an evil bank make good with someone like (https://www.latimes.com/business/la-fi-wells-fargo-mortgage-modification-20190101-story.html)Michaela Christian, (https://www.latimes.com/business/la-fi-wells-fargo-mortgage-modification-20190101-story.html) who bought her Las Vegas home in 1998, at age 24, only to lose it in 2013, after the economy crashed and she was devastated by a brutal car accident?

When the bank refused to modify her mortgage, Christian moved in with a friend and scrambled to rebuild her life.

Five years later, Wells Fargo admits it made a mistake. Christian, 46, qualified for the kind of mortgage help that may have saved her home after all.


Christian tells the Los Angeles Times that she first found out about the “error” when she received a letter from Wells Fargo in September, along with a $15,000 payoff.

Christian estimates she had about $30,000 in equity in her then-home, on top of a $20,000 pool she’d installed.

She narrowly escaped foreclosure by selling her house for $135,000 in 2013.

Just five years later, the house is estimated to be worth a quarter of a million.

https://www.dailykos.com/stories/1823002

[Winehole23]

hard to avoid the conclusion that ripping customers off is the business model.

[Winehole23]

Taibbi guts Glenn Kessler's WaPo fact check on the financial sector bailout, but first his recap:


“The Fed is not a Federal Agency” he writes, and insists its bailout facilities made profits and were a social necessity. For instance, he says, they unfroze the commercial paper market, which was “essential for meeting liabilities such as workers’ payroll.” Had the Fed not acted, he says, “the U.S. economy would have ground to a halt.”

This is basically the history of the bailouts as written in self-congratulatory tomes like Ben Bernanke’s The Courage To Act (revised, probably, from My Courage To Act) and Timothy Geithner’s Stress Test. It’s Wall Street’s one-sentence summary of the bailouts: they weren’t that big, but if they were, they were necessary, and made a profit, and even though they made us rich again, they were done for you, the ordinary person!
https://www.rollingstone.com/politics/politics-features/2008-financial-bailout-809731/

[Winehole23]

Saving community banks, a myth:


Let’s start with the notion that “community banks” were also aided in the bailout. There were, indeed, a few smaller banks that participated in the TARP, and in fact, they tended to be in the program longer than the super-sized banks, mainly because they were unable to repay money as quickly.


However, only a section of community banks get into the program. The Treasury Department invested in 707 banks, or about 10 percent of the industry (https://www.sigtarp.gov/Audit%20Reports/TARP_SBLF_Special_Section.pdf). But 100 percent of the biggest banks were bailed out. As Bernanke told the Financial Crisis Inquiry Commission, of the nation’s 13 largest banks, “1 (https://books.google.com/books?id=RFEmFQuNZhMC&pg=PA354&lpg=PA354&dq=%E2%80%9COut+of+maybe+the+13,+13+of+the+most+im portant+financial+institutions+in+the+United+State s,+12+were+at+risk+of+failure+within+a+period+of+a +week+or+two%E2%80%A6%E2%80%9D&source=bl&ots=4GhaGD3ZjT&sig=ACfU3U2dViBF2OsP9qG1uwpF2TPhFpYhIA&hl=en&sa=X&ved=2ahUKEwj60tPQ-4vhAhWlmOAKHRjDChYQ6AEwAnoECAcQAQ#v=onepage&q=)2 were at the risk of failure within a week or two (https://books.google.com/books?id=RFEmFQuNZhMC&pg=PA354&lpg=PA354&dq=%E2%80%9COut+of+maybe+the+13,+13+of+the+most+im portant+financial+institutions+in+the+United+State s,+12+were+at+risk+of+failure+within+a+period+of+a +week+or+two%E2%80%A6%E2%80%9D&source=bl&ots=4GhaGD3ZjT&sig=ACfU3U2dViBF2OsP9qG1uwpF2TPhFpYhIA&hl=en&sa=X&ved=2ahUKEwj60tPQ-4vhAhWlmOAKHRjDChYQ6AEwAnoECAcQAQ#v=onepage&q=)” of the initial bailout period, in late September and October of 2008. Every single one of those banks took huge bailout payments.


As Gretchen Morgenson pointed out when information about Fed bailout programs first became public, just six banks — JPMorgan Chase, Bank of America, Citigroup (http://topics.nytimes.com/top/news/business/companies/citigroup_inc/index.html?inline=nyt-org), Wells Fargo, Goldman Sachs and Morgan Stanley (http://topics.nytimes.com/top/news/business/companies/morgan_stanley/index.html?inline=nyt-org) — were the recipients of 63 percent of the Fed’s average daily borrowing, representing about a half-trillion dollars at peak periods just for those firms.

[Winehole23]

Those Fed dollars were doled out through an alphabet soup of different programs (the TAF, the TALF, the TSLF, the TOP, the PDCF, the Maiden Lanes, etc.) and were used to execute major restructurings of the economy. The Fed put up $30 billion to help Chase buy the hulk of Bear Stearns, helping further by buying up $29 billion in bad assets from the dying investment bank.


Citigroup was borrowing $100 billion from the Fed at its peak, Morgan Stanley $107 billion. Fed money was used to broker Bank of America’s absorption of Merrill Lynch and help Wells Fargo buy up Wachovia, in addition to other mergers. At the end of all the rearranging, the 12 largest banks in the country — which had all contributed massively to the crisis and had maybe a week to live when the crash happened, as Bernanke testified — suddenly controlled 70 percent of all bank assets (https://www.forbes.com/sites/mikecollins/2015/07/14/the-big-bank-bailout/#60df52732d83) in the United States.


This matters in relation to Kessler’s piece because it had a profound effect on the market. The financial community now knew the government would never let the biggest banks fail, and now those banks had lower borrowing costs than small community banks, for whom the same could not be said. This turned into a so-called “implicit guarantee” that Bloomberg said was worth $83 billion a year (https://www.bloomberg.com/view/articles/2013-02-24/remember-that-83-billion-bank-subsidy-we-weren-t-kidding) by 2013.


The point is, the bailout plan not only didn’t really help community banks, it massively accelerated their disenfranchisement, by placing them in a separate economic class from those deemed Too Big to Fail

[Winehole23]

Kessler spends half his time quibbling over the size of the TARP, which was really a minor appetizer on the bailout menu. The bailout was not just the government handing bags of money to companies (although it did that, too). It was an array of programs designed to help the companies who screwed up the worst avoid losses, secure new revenue streams and emerge from the crash not just unscathed, but more powerful than before.

[Winehole23]

Market intervention, not counted:


Did Kessler count interventions like the 2008 ban on short-selling (https://www.cnbc.com/id/26786833) of 799 financial stocks, which protected just those companies from (legitimate) market pressures?

[Winehole23]

Emergency bank charters to non-banks:


Did he count the emergency bank charters handed out to Goldman and Morgan Stanley (https://dealbook.nytimes.com/2008/09/21/goldman-morgan-to-become-bank-holding-companies/) late on the Sunday night of September 21st, 2008? The two investment banks were not commercial banks, but they obtained late-night permission to call themselves Bank Holding Companies, so they would have lifesaving access to borrowing at the Fed’s discount window and could open their doors the following morning.

[Winehole23]

The Federal Reserve paid interest on bank reserves:


There were so many other interventions. The Post likely forgot that on October 6th, 2008, the Fed for the first time in its history began paying interest on required reserve balances (https://www.federalreserve.gov/monetarypolicy/20081006a.htm), a perk that one banker described as “paying banks to be banks.”

[Winehole23]

It didn't work as deigned, or did it?


This was a particularly obnoxious gift to Wall Street since the whole concept of the bailouts was supposed to be unfreezing the economy and spurring lending. But banks were so strapped for safe income sources they began filling reserve balances at the Fed, hoarding cash in search of those interest payments. In 2012, for instance, banks were only required to keep about $100 billion in reserve, but according to the San Francisco Fed (https://www.frbsf.org/education/publications/doctor-econ/2013/march/federal-reserve-interest-balances-reserves/), reserves averaged $1.5 trillion over the first six months of that year. That was $1.4 trillion taken out of the economy.

[Winehole23]

The Fed lowered examination standards so banks would pass stress tests:


How about the government’s continual efforts to look the other way or lower standards (https://www.wsj.com/articles/fed-to-further-overhaul-stress-testing-regime-making-it-easier-for-banks-to-pass-1541774507) so bailout recipients who should have failed mandated “stress tests” would be allowed to pass (https://www.wsj.com/articles/wall-street-gets-the-friendlier-fed-its-been-waiting-for-1530558419)?


Several banks got the Fed to drop estimates of capital shortfalls by $20 billion or more after intense lobbying. Citigroup passed one of its early tests when regulators were persuaded to cut billions of an expected hole on its balance sheet based on “pending transactions (https://www.wsj.com/articles/SB124182311010302297).” Again, how do you price that kind of aid?

[Winehole23]

Charters not revoked, penalties made tax deductible:


How about non-prosecuting a company crime? Crafting settlements so automatic penalties for certain offenses like the revocation of bank charters don’t kick in? Then there was the too-common practice of letting offenders like HSBC make at least part of regulatory settlements related to crisis-era offenses tax-deductible. This forced all of us to pay for hundreds of millions of dollars’ worth of these settlements.

[Winehole23]

Bernanke called these figures wildly inaccurate without citing any support:


The Special Inspector General’s office for the TARP program, meanwhile, issued reports for the bailout. This oversight panel led by Bailout author (https://www.amazon.com/Bailout-Account-Washington-Abandoned-Rescuing-ebook/dp/B00818J57W) and former SIGTARP chief Neil Barofsky put the gross outlay — including the TARP, and other Treasury and Fed expenditures — at $4.6 trillion. The net outlay they place at $3.3 trillion (http://www.usfederalbailout.com/). Why are these numbers less reliable than the rest?

[Winehole23]

relevant again with the upcoming wave of evictions/foreclosures

[Winehole23]

Non-bank market makers are still the weak link, 12 years after the Great Recession.


This paper studies liquidity risk at the six largest U.S. banks. The starting point is the stress tests performed under the Liquidity Coverage Ratio (LCR) regulation, which compare a bank’s liquid assets to its loss of cash in a stress scenario that regulators say is based on the 2008 financial crisis. These tests find that all of the large banks could endure a liquidity crisis for 30 days without running out of cash. This paper argues, however, that some of the assumptions in the LCR stress scenario are not pessimistic enough to capture what could happen in a crisis like 2008. The paper then proposes changes in the dubious assumptions and performs revised stress tests. For 2019 Q4, the revised tests suggest it is unlikely that any of the six banks would survive a liquidity crisis for 30 days. This negative finding is most clear-cut for Goldman Sachs and Morgan Stanley.https://www.nber.org/papers/w28124

[Winehole23]

Steal 35 bucks from a bank, go to jail. Bank steals 35 bucks from you, slap on the wrist in private.

1340930117573505025

[Winehole23]

After 2008 Blackstone and Berkshire Hathaway became commercial real-estate giants; the current downturn will offer another opportunity for private equity to gorge itself on distressed property.


Back in 2008, Blackstone emerged as one of the biggest beneficiaries of the subprime crisis, becoming a trailblazer in financializing rents. As that crisis went global, so too did Blackstone’s property empire. By the time the dust had settled, it was the biggest commercial real estate company on the planet, according to (https://fortune.com/2020/02/17/blackstone-commercial-real-estate-business-brep-breit/) Fortune magazine. .

Now, Blackstone wants to repeat the feat, albeit using a somewhat different playbook. At the Goldman Sachs Financial Services Conference (https://seekingalpha.com/article/4393944-blackstone-group-inc-bx-ceo-stephen-schwarzman-presents-goldman-sachs-u-s-financial-services), held on December 9, Blackstone’s CEO, Stephen Schwarzman, gave a few hints about how it plans to do just that. Asked if he thought large firms such as Blackstone would once more gain more market share during this crisis, he responded:



I think something similar will happen. You always have winners and losers. Blackstone was a huge winner coming out of the global financial crisis. And I think something similar is going to happen.


During the last crisis, Blackstone pioneered the buy-to-rent scheme by snapping up, for cents on the dollar, huge batches of foreclosed homes from struggling and bailed-out banks and then turning them into rental properties. In short order, Blackstone’s subsidiary Invitation Homes became the largest owner of single-family rental homes in the United States. It also took the meaning of “absentee landlord” to a whole new level, as accusations of ill repair and poor maintenance quickly mounted (https://www.reuters.com/investigates/special-report/usa-housing-invitation/). Tenants also complained about excessive rent increases and fees.

The USG backstopped private equity's derivative plays:


Once the model was up and running in the U.S., it was quickly exported to cities in Canada (Toronto) and Europe (Berlin, Madrid, Barcelona, Dublin, Stockholm…). Since going public in 2007, Blackstone has multiplied eightfold the equity capital it devotes to real estate, to $163 billion. As Scharzman himself put it (https://www.theguardian.com/society/2019/sep/20/ruthless-private-equity-firms-gobble-up-property-wreak-havoc-on-tenants-lives), the company’s strategy in post-crisis Europe essentially involved “waiting to see how beaten up people’s psyches get, and where they’re willing to sell assets … You want to wait until there’s really blood in the streets.”

As Blackstone’s property empire grew and grew, it managed to convince regulators in the U.S. to allow it to transform part of that empire into rent-backed structured securities. It paid Moody’s, Kroll, and Morningstar lucrative fees to rate a large chunk of those securities AAA. And when the securities began to sour just a few years later after a Blackstone securitization saw a big drop in rental income, Blackstone managed to convince (https://www.nakedcapitalism.com/2017/01/the-obama-administration-bails-out-private-equity-landlords-at-the-expense-of-the-middle-class-government-guarantees-for-rental-securitization.html) the Obama administration to bail it out by providing explicit government guarantees for the higher-rated tranches.


CARES ACT and the Federal Reserve came to the rescue when the shit hit the fan this year:


In April markets were crashing. Then, little by little, the trillions of dollars that had been conjured up by the Federal Reserve and other large central banks began to feed through to the financial markets, which in turn began to re-levitate, creating an even more bifurcated economy. As mom-and-pop businesses hit the wall in droves and millions of people lost their jobs, the Fed bailed out shareholders whose stocks were plunging and rescued investors of high-risk assets that were in the process of imploding, such as highly leveraged mortgage REITs. The bigger the investor, the more money they got.


Private equity firms such as Blackstone were close to the front of the queue. Despite having on hand an estimated $1.7 trillion of so-called “dry powder” — uninvested but committed capital — private equity firms were big beneficiaries of the emergency loan programs launched in the CARES act. Many of the firms they owned ended up receiving (https://www.bloomberg.com/news/articles/2020-07-02/private-equity-on-edge-with-u-s-plan-to-name-relief-recipients) millions of dollars in low-interest PPP loans from the Small Business Administration (SBA). In the UK, private equity groups won a similar concession (https://www.thetimes.co.uk/article/rescue-funds-extended-to-firms-owned-by-private-equity-hd3vxfqmn) in September allowing UK companies they own to access emergency state-backed loan schemes.


PE firms such as Blackstone also benefited in a more subtle way from the Federal Reserve’s pledge to buy up to $700 billion of corporate paper, including junk bonds and bond ETFs. In the end the Fed had only bought $13 billion (https://wolfstreet.com/2020/12/04/nobodys-worried-about-nothin-junk-bond-yields-hit-record-low/) in corporate bonds and bond ETFs as of early December, but its jawboning spurred one of the largest junk bond buying binges in history. And PE firms were among the biggest beneficiaries. The second quarter saw one of the highest-ever levels of junk-bond issuance by private equity-backed companies, at more than $31bn (https://www.fnlondon.com/articles/us-feds-covid-response-fuels-private-equity-debt-boom-20200812).
https://www.nakedcapitalism.com/2020/12/wall-street-mega-landlord-blackstone-prepares-to-reap-the-spoils-of-another-crisis.html

[Winehole23]

1415889526606680068

[boutons_deux]

1415889526606680068

America as rentier society. Ain't Capitalism great?

No, Blackstone Didn’t “Buy 17,000 Houses” out from under Desperate Homebuyers.

And BlackRock Didn’t “Buy a Whole Neighborhood.”

But Built-to-Rent is a Huge Change

https://wolfstreet.com/2021/06/22/no-blackstone-didnt-buy-17000-houses-out-from-under-desperate-homebuyers-and-blackrock-didnt-buy-a-whole-neighborhood-but-built-to-rent-is-a-h/

[Ef-man]

America as rentier society. Ain't Capitalism great?

No, Blackstone Didn’t “Buy 17,000 Houses” out from under Desperate Homebuyers.

And BlackRock Didn’t “Buy a Whole Neighborhood.”

But Built-to-Rent is a Huge Change

https://wolfstreet.com/2021/06/22/no-blackstone-didnt-buy-17000-houses-out-from-under-desperate-homebuyers-and-blackrock-didnt-buy-a-whole-neighborhood-but-built-to-rent-is-a-h/

So much for the American dream of home ownership.

People will be forced to stay with parents like qchrisy and derptacular.

[boutons_deux]

So much for the American dream of home ownership.

People will be forced to stay with parents like qchrisy and derptacular.

Capitalism installing rentier capitalism.

Labor busts its ass to get by while Capital luxuriates with passive income.

[ElNono]

https://www.longtermtrends.net/home-price-median-annual-income-ratio/

[Winehole23]

who's been bidding up the housing stock?


https://www.longtermtrends.net/home-price-median-annual-income-ratio/


1235607665801334787

1235609658074808323

1235611397612015616

[Winehole23]

financial repression has screwed the middle class and renters

1235612418644029440

[Winehole23]

paying cash above asking is a common PE tactic


https://pbs.twimg.com/media/FAJhb5bWEAMMAUW?format=jpg&name=small

[Winehole23]

tired: tax and spend

wired: raid and redistribute

https://www.cbc.ca/radio/asithappens/berlin-residents-to-vote-in-referendum-on-seizing-rentals-from-corporate-landlords-1.6185423

[Winehole23]

1442527715563749376

[RandomGuy]

1442527715563749376




Oh shit. Seriously?

just... wow.

[Winehole23]

CS National, Top 10 Metro ,CPI, OER Percent Change

https://mishtalk.com/.image/t_share/MTg0MTkwNzU0NTUyMjkzMjA1/cs-national-top-10-metro-cpi-oer-percent-change-2021-07.png





Case Shiller Adjusted Inflation


https://mishtalk.com/.image/t_share/MTg0MTkwODgwOTg1NzIwNzA3/cpicsai-national-2021-07.png






Real Interest Rates


https://mishtalk.com/.image/t_share/MTg0MTkwOTIwOTgyMjc1OTcx/real-interest-rates-cpi-csai-2021-07.png

https://mishtalk.com/economics/real-interest-rates-hit-new-record-low-as-home-prices-hit-new-record-high

[Winehole23]

https://pbs.twimg.com/media/E9vHMvHVEAIkdTF?format=png&name=900x900

[Winehole23]

absentee PE property managers harrassing tenants


The company now owns at least 34 buildings in Los Angeles through shell companies, according to state business records (https://businesssearch.sos.ca.gov/CBS/SearchResults?filing=&SearchType=LPLLC&SearchCriteria=VILA+LP&SearchSubType=Keyword). The properties are mostly concentrated on the city’s Westside (https://www.google.com/maps/d/edit?hl=en&mid=1UJ6b5m35I-RFhwpVjZrnTAbKQpKTlwvg&ll=34.04171047128547%2C-118.40750580000001&z=12). Tenants in six buildings have reported harassment to either Capital & Main or the Los Angeles Tenants Union: 8440 De Longpre Ave. in West Hollywood, 300 San Juan Ave. in Venice Beach, 3240 Fay Ave. in Culver City, 9619 W. Olympic Blvd. in Beverly Hills and 1937 Argyle Ave. and 1844 N. Harvard Blvd. in Hollywood.


The De Longpre building is old and in need of repair, the company argued through a spokesperson, with “serious water intrusion issues impacting multiple units throughout the building.” The city of West Hollywood approved all capital improvements to the building, the spokesperson says, and Veritas has been in regular communication with tenants about renovations. The company declined Capital & Main requests to interview CEO Yat-Pang Au as well as members of its executive team.


“As for the false narrative that we ‘attempt to force residents from their homes,’ nothing could be further from the truth,” the spokesperson says.
https://capitalandmain.com/san-francisco-based-veritas-investments-accused-of-harassing-renters

[Winehole23]

Rising inflation and interest rates are wrecking the market this time, but the result will be the same as all crashes. The rich will get richer buying distressed/discounted property, more shit will end up in the hands of fewer people.


Housing Bubble Getting Ready to Pop: Unsold Inventory of New Houses Spikes by Most Ever, to Highest since 2008, with 9 Months’ Supply, Sales Collapse at Prices below $400k

by Wolf Richter • May 24, 2022 •

Stocks of homebuilders swoon amid worst inflation in construction costs, shortages, and spiking mortgage rates that take buyers out of the markethttps://wolfstreet.com/2022/05/24/housing-bubble-getting-ready-to-pop-unsold-inventory-of-new-houses-spikes-by-most-ever-to-highest-since-2008-sales-collapse-below-400k/

[Winehole23]

for one Mainer, the nightmare that started in 2010 is ongoing


Even if there was some way for Fannie Mae to now obtain a mortgage assignment, the mortgaged property has become worthless for the reasons described in Section VIII above. Before demolition, the Town had been assessing the value of the building at $137,100 and the value of the land at $45,000. The building is now gone, and the Town is imposing a $19,300 tax lien against the property for the unpaid abatement and demolition costs. This now vacant lot sits on a dead-end street directly across the street from a noisy and dusty 20+ acre concrete products manufacturing site. It is unlikely that there is any value at all left for Fannie Mae on the mortgaged property.


If Fannie Mae sues Matthew Raymond for the mortgage debt, it will find that Matthew Raymond is a low-income wage earner who is judgement proof. He has no assets which are not exempt under bankruptcy law and if collection action is taken against him by Fannie Mae or the Town of Sanford, he will file for bankruptcy. Raymond has the most compelling laches defense to any possible new foreclosure or collection action I have seen in my 50+ years of legal work. The Fannie Mae debt when the 2010 foreclosure action commenced was $173,854.73, but as of July 11, 2022, that debt amount had soared to $399,348.14. In that time the property has gone from a value of around $81,000 in 2010 to over $182,200 in more recent years and now to about zero.


“Laches is negligence or omission seasonably to assert a right. It exists when the omission to assert the right has continued for an unreasonable and unexplained lapse of time, and under circumstances where the delay has been prejudicial to an adverse party, and where it would be inequitable to enforce the right.” Brochu v. McLeod, 2016 ME 146, ¶ 13, 148 A.3d 1220 (https://scholar.google.com/scholar_case?case=16807995946465457116&q=Brochu+v.+McLeod%22&hl=en&as_sdt=10000006&as_vis=1). The repeated and unreasonable failures of Fannie Mae and its servicers to complete a foreclosure for 12 years while the mortgage debt more than doubled has been prejudicial to Mr. Raymond and makes it inequitable for Fannie Mae to pursue any further recovery efforts. This is especially so when one recognizes that, back in 2010, Fannie Mae’s lawyers could have gone to Steven D. Sass, Liquidating Trustee of American Home Mortgage Corp., to obtain the mortgage assignment they needed to complete that 2010 foreclosure action within a year or two.
https://www.nakedcapitalism.com/2022/08/think-the-financial-crisis-is-over-mortgage-servicers-still-abusing-borrowers-for-10-years-thanks-to-lax-fannie-freddie-oversight.html

[Winehole23]

Bailing out greedy, improvident lenders -- and socializing the losses, first via TARP and afterward with ten years of QE and zero-bound interest rates -- was the end of capitalism as we knew it.

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[Winehole23]

What broke was the middle class

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[Winehole23]

God forbid an insolvent bank should ever face receivership.

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[Thread]

God forbid an insolvent bank should ever face receivership.

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He was busy trying to get a son like the one who was killed by that Mex.

[Winehole23]

that's well put together

T2IaJwkqgPk

[Winehole23]

Meet the new boss/same as the old boss

1815466764626784535https://x.com/Aaron_Glantz/status/1815466764626784535

[Thread]

Meet the new boss/same as the old boss

1815466764626784535https://x.com/Aaron_Glantz/status/1815466764626784535

Then don't buy the fuckin' house over your means on your worst day.