Fed 0.01% loans to European banks after Lehman collapse. The Servicing Fraud Settlement: the Real Game. Warning: This is a long blog post.
But if you follow mortgage servicing, I think you’ll find it worth reading. Despite lots and lots of media coverage of the servicing fraud settlement, nobody seems to understand the real story that's going on. I think that this post will explain a lot. Let's start by recapping what we know.
Housing double dip could be coming: MacroMarkets. Reverse mortgages. Fannie Mae REO Homes For Sale - HomePath.com. Certified Forensic Loan Auditors, LLC - Forensic Audit / Mortgage Audit Litigation. Tracking Potential Bank Litigation Losses - Deal Journal. The Risks of the Mortgage Mess: The Banks' View. HSBC (HBC) got plenty of attention when it disclosed that it had suspended foreclosures in its annual report Monday.
But its annual report -- as well as other big banks' reports -- also contained plenty of additional nuggets about the mortgage mess, especially in the risk disclosures, which are required to be written in plain English and to include "the most significant factors that may adversely affect the company's business, operations, industry, financial position or future financial performance. " Judge OKs Countrywide settlement but big investors opt out. Major investors opting out of a $624-million class-action settlement with Countrywide Financial Corp. said they would have recouped less than 5% of their losses on the mortgage lender's stock had they accepted the agreement.
"A settlement on behalf of my clients would have to be a material multiple of that amount," said Blair Nicholas of San Diego, a lawyer for the California Public Employees' Retirement System and 15 other institutional investors. Altogether, 33 institutional investors have opted out. The agreement was approved Friday by U.S. District Judge Mariana Pfaelzer in Los Angeles, who described the settlement as reasonable and substantial given the complexities of the case and the uncertainties of what a jury might decide. It requires Countrywide and its parent company, Bank of America Corp., to provide $600 million for former Countrywide shareholders remaining in the case. Allstate Sues Citigroup, Deutsche Bank Over Securities. Allstate Corp., the largest publicly traded U.S. home and auto insurer, sued units of Citigroup Inc. and Deutsche Bank AG over claims they fraudulently sold hundreds of millions of dollars of mortgage-backed securities.
Allstate is seeking to recover the lost market value of the securities, as well as principal and interest payments, according to complaints filed today in New York state Supreme Court in Manhattan. 6 of the biggest mortgage lenders say N.J. high court overstepped its boundaries. Joe Raedle/Getty ImagesThe banks say a N.J.
Supreme Court order violates due process and equal protection clauses. NEWARK -- State Supreme Court Chief Justice Stuart Rabner made a splash in December when he ordered six of the nation's biggest mortgage lenders into court to show why their foreclosure operations shouldn't be suspended over reports of widespread irregularities. Connecticut Law Tribune: Forensic Accounting And Valuation Litigation: Finding Out Who Really Holds The Note.
OCC - Office of the Comptroller of the Currency, Administrator of National Banks. SEC Is Said to Subpoena Wall Street Banks in Mortgage-Bond Investigation. U.S. regulators subpoenaed JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Goldman Sachs Group Inc. and Wells Fargo & Co., seeking information on the banks’ role in bundling mortgages for sale to investors, a person familiar with the matter said.
SEC Urges Banks to Disclose Potential Losses From Foreclosures. The U.S.
Securities and Exchange Commission urged banks to disclose their expected losses from flawed foreclosure documents, as mortgage-bond investors demand refunds on billions of dollars of securities. Lenders must disclose circumstances that they “reasonably expect” to have an “unfavorable impact” on financial results, the SEC said in a letter posted on the agency’s website today. The letter was sent because of “concerns about potential risks and costs associated with mortgage and foreclosure-related activities,” the SEC said. Federal regulators and attorneys general from all 50 states are investigating whether loan-servicing companies used improper procedures during foreclosure proceedings, including so-called robo-signers who didn’t check documentation. Investors such as Pacific Investment Management Co. have demanded that banks buy back faulty loans that were bundled into bonds. To contact the reporter on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net.
Bondholders Pick a Fight With Banks. U.S. Holding Banks Accountable on Foreclosures, Caldwell Says. The Treasury Department official leading Obama administration efforts to stem foreclosures said the government is working to ensure borrowers are being treated fairly while avoiding delays that could lower housing prices.
Holman Jenkins, Jr.: The Foreclosure Crisis and the Future of American Communities. Foreclosure as a Last Resort. The Financial Crisis - A visual Guide to How the Economy Went Into Recession. The roots of foreclosure-gate: incentives and lawyers « Truth on the Market. Careless or even fraudulent documentation in foreclosure actions has stalled foreclosures, stymied recovery of the housing market, threatened the earnings and even financial stability of banks, and may lead to massive securities fraud actions.
Credit Suisse lists mortgage servicers with highest Ginnie Mae delinquencies. Judges to Weigh Mortgage Document Destruction. Federal bankruptcy judges in Delaware are due to hold separate hearings Monday on requests by two defunct subprime mortgage lenders to destroy thousands of boxes or original loan documents.
The requests, by trustees liquidating Mortgage Lenders Network USA and American Home Mortgage, come despite intense concerns that paperwork critical to foreclosures and securitized investments may be lost. A series of recent court rulings have increased the importance of original loan documents, holding that they are essential for investors to prove ownership of mortgages and to have the right to foreclose.
In the Mortgage Lenders case, the U.S. Flawed Mortgage Papers May Pose Economic Risk, Panel Says. Inside Job director on Geithner, Goldman, and criminal bankers - Fortune Finance. Charles Ferguson elaborates on his famous Oscar speech. by Adam Lashinsky, senior editor-at-large Inside Job, which recently won the Academy Aware for best documentary film of 2010, continues to be a conversation starter. Paul Krugman titled his latest column in The New York Times, "Another Inside Job. " Time Magazine's Joe Klein evokes director Charles Ferguson's now-famous acceptance speech at the Oscars in which the filmmaker lamented that so far no one has gone to jail for crimes to committed during the financial crisis of 2008.
Despite lots of overheated rhetoric, it never has been completely clear to me exactly which crimes people think were committed. I put this question to Ferguson himself recently in a public interview in San Francisco. Moral for CEOs Is Choose Your Fraud Carefully: Jonathan Weil. Of all the stories to come out of the 2008 collapses of Fannie Mae and Freddie Mac, this one may be the most incredible: To this day, neither company has admitted that any of the numbers on its financial statements that year were wrong. It seems the Securities and Exchange Commission won’t be doing anything to challenge that pretense, either, and that this may be by design. The SEC for years has been bending over backward to avoid accusing major financial institutions of cooking their books, even when it’s obvious they did. So much for upholding financial integrity.
Last week the regulator notified former Fannie Mae Chief Executive Officer Daniel Mudd that it may file civil claims against him. Consumer Watchdog to Crack Down on 'Abusive' Home Lending. Michael Houghton for The New York TimesRichard Cordray of the Consumer Financial Protection Bureau. The Consumer Financial Protection Bureau has put mortgage companies and other lenders on notice: be on your best behavior. Richard Cordray, the top cop at the new federal consumer watchdog, unveiled his enforcement agenda on Tuesday during a speech in Washington.
At the top of the list: cracking down on “unfair, deceptive or abusive acts” by lenders. “Rooting out these bad actors will be good not only for consumers, but also for community banks and other financial companies that are committed to honest dealing and quality customer service,” he told the National Association of Attorneys General at the group’s spring meeting.
It was a familiar crowd for Mr. Warren tells the controversial truth Al Lewis. By Al Lewis NEW YORK (MarketWatch) — Certain members of Congress keep trying to kill the Consumer Financial Protection Bureau before it is born, but so far they’re losing to a former Sunday school teacher. “I am not going down on this agency without a fight,” Elizabeth Warren said earlier this month at a Society of American Business Writers and Editors meeting in Dallas. “It is a fight worth having.” National Credit Union Association Threatens Lawsuit Against 4 Firms. Home » Banking, Financial Risk, Operational Risk, Securities. Fed Stress Test 2011 Is A Farce. William K. Black: Foreclose on the Foreclosure Fraudsters, Part 1: Put Bank of America in Receivership. After a quick review of its procedures, Bank of America this week announced that it will resume its foreclosures in 23 lucky states next Monday.
Ker-BOOM! Transformational Change in. Mortgage Settlement Term Sheet: Bailout as Reward for Institutionalized Fraud. American Banker posted the 27 page term sheet presented by the 50 state attorneys general and Federal banking regulators to banks with major servicing operations. 27_page_settlement2. How to Foreclose on Your Bank. Banks Saved $25 Billion By Under-Serving Delinquent Mortgages - Halah Touryalai - Working Capital. Foreclosure class-action lawsuits picking up nationwide. Banks Get Edge in Talks on Foreclosure Penalties as Feds Settle. Bank of America Corp. (BAC), Wells Fargo & Co. U.S. May Pursue More Lenders After Suing Deutsche Bank on Loans. Ambac, Bankrupt Bond Insurer, Settles Subprime Assets Suit. Ambac Financial Group Inc. (ABKFQ), the bankrupt holding company for a failed bond insurer, agreed to set aside $27.1 million to resolve a 2008 lawsuit claiming it misled shareholders about risks linked to subprime securities, according to a court filing.
Investors alleged that Ambac issued misleading statements about its financial results related to insurance for collateralized debt obligations, or CDOs, according to a class- action, or group, complaint, filed in January 2008, in federal court in Manhattan. Four States Weigh Bills to Make Appraisers Disregard Foreclosures - US Banker. US Banker | March, 2011. FDIC’s Bair: Millions of Foreclosures Could Be ‘Infected’ - Developments.