Whistleblower Lawsuits Against Banks Extinguished in Foreclosure Fraud Settlement. I think my disgust over federal housing policy is just about complete. As you know, we’re still waiting for the actual terms of the foreclosure fraud settlement, more than one month after the announcement. But more information has dribbled out, not much of it to the good.
Michael Hiltzik rounded up some of the more troubling issues. He mentions that OCC penalties will get folded into the settlement , basically charging $0 for their violations. The Federal Reserve did the same thing. He mentions the Ted Gayer study showing that only 500,000 borrowers will even be eligible for the principal reduction in the settlement, half of what HUD and other regulators promised. But it gets worse. The suit claims Bank of America: Told borrowers and regulators that a complaint was “under review” while internally classifying the files as incomplete. And there was another whistleblower case , unsealed last month documenting appraisal fraud at Countrywide , now part of BofA. Well, guess what. Big banks accused of interest rate manipulation - Mar. 11.
London's Canary Wharf neighborhood, a financial hub. NEW YORK (CNNMoney) -- It affects everything from mortgages to credit cards to student loans, and now some of the world's biggest banks are at the center of a criminal investigation into whether they manipulated it for their own benefit. The London Interbank Offered Rate, or Libor, is a measure of the cost of borrowing between banks that serves as a benchmark for over $350 trillion worth of financial products worldwide. Higher Libor rates translate into higher borrowing costs for businesses and consumers, while lower rates could make lenders reluctant to lend since they can't charge as much in interest. In addition to consumer loans, certain bonds and interest rate swaps also use it as a benchmark.
With all the different loans and investments tied to Libor, there are serious consequences if the process is tampered with. How Libor works: Libor rates are set each business day through a process overseen by the British Bankers' Association. With Banks As Landlords, Some Tenants Neglected. Hide caption Luz Escamilla's bedroom walls are stained with the blood of bedbugs. She says she doesn't want to bleach them until reps from CW Capital, her landlord, pay an in-person visit to her Maryland home. Aarti Shahani/NPR Across the country, big banks and other large investors are buying up tens of thousands of foreclosed rental properties.
They're not always model landlords, according to tenants and regulators. Some banks are failing to follow local and state housing codes, leaving tenants to live in squalor — without even a number to call in the most dire situations. hide caption Pedro Jimenez and three of his kids, in the living room of their Oakland, Calif., apartment. JPMorgan Chase hasn't hired a management company to fix the shattered window panes or make other repairs. Mario Lugay Pedro Jimenez and three of his kids, in the living room of their Oakland, Calif., apartment. Pedro Jimenez signed the lease for his second-floor apartment in Oakland, Calif., in 2006. The U.S. GAO: Almost Half of Bailed Banks Repaid the Government With Money “From Other Federal Programs” By Matt Stoller, former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at@matthewstoller The Government Accountability Office continues its subtle war on the talking point used by Treasury that “TARP made money”.
Here’s the GAO, with a report out today. As of January 31, 2012, 341 institutions had exited CPP, almost half by repaying CPP with funds from other federal programs. Much of the government-supplied TARP funding (to small banks) was replaced by the Small Business Lending Fund passed in 2010, which Republicans called “TARP 2.0″. The talking point that the Troubled Asset Relief Program made money for the taxpayer is an important structural argument for the Treasury Department and the political elements in the Obama White House. Our banking system is still reliant on the government for support. Bank of America Weighs New Set of Fees.