Daily Archives: July 18, 2012

City Of Compton Next On The Muni Bankruptcy Deck

From Reuters:

The City of Compton, a city of 93,000 people located on the outskirts of Los Angeles, must decide by Sept. 1 whether to seek bankruptcy, according to its two most senior financial officials.


Such a move would see it join a growing number of deficit-hobbled California cities that have used the filing to restructure onerous debt loads.


Compton, which has an accumulated $43 million deficit and has depleted what had been a $22 million reserve, will run out of cash to make its payroll on Sept. 1 at its current cash consumption rate, city comptroller Steven Ajobiewe told the city council during a July 17 meeting.


“I have $3 million in the bank and $5 million in warrants due in the next 10 to 12 days,” said city treasurer Doug Sanders. “By then, the council will have a decision to make: don’t pay the bonds, default on them, or have a serious talk about bankruptcy.”


The city council adjourned at 11 pm without discussing a potential bankruptcy filing.


Compton Mayor Eric J. Perrodin also said he brought unspecified charges of “waste, fraud and abuse of public monies” to California officials, and had met with auditors from both the state and Los Angeles County.


He told the city council that at one point in its past the city had overspent legally set limits on certain programs by $17 million but would not elaborate.


Neither the state nor county has started an audit or investigation, city officials said.


A bankruptcy filing would follow one by San Bernardino, which on July 9 became the third California city this year to seek restructuring of its liabilities. Earlier, Stockton and Mammoth Lakes also said they would file.


Compton’s problems escalated on July 13 when credit rating agency Standard & Poor’s said it may cut Compton’s BB long-term and underlying ratings for its lease revenue bonds.


Paladin Press Release for Successful Foreclosure Defense Case in Pinellas County Florida


A recent victory by Kelley Bosecker, Esq. in Pinellas County, Florida shows that dismissing the foreclosure case is, in fact, very possible and very probable. In the case of Aida and Howard Hayes, Case Docket Number 522008CA013676XXCICI, Bosecker used a securitization audit from Paladin Securitization Auditors to show the court that the current servicer had no right to foreclose on the first mortgage of $134,400. The securitization audit revealed that the signature of Thomas Czochanski, the Vice President and CFO of First NLC Financial Service, LLC, that was on the original mortgage instrument, did not even remotely resemble the signature on his personal mortgage for his own home found in public records. Instead, it resembled that of an employee from a well known “document processing” (robo-signing) company called LSI.

What’s more, is that the securitization audit showed the two employees of LSI who signed the mortgage instrument and claimed to be vice presidents of MERS had no vested interest or financial stake in the loan and had no authorization by MERS to sign in the first place.

The audit goes on the show numerous other issues such as violations of the pooling and servicing agreement and that the note and the mortgage had been bifurcated. A copy of the actual securitization audit can be found here.

The result of using a securitization audit for the Hayes’ foreclosure defense case resulted in a motion to vacate and the case was dismissed. Aida and Howard Hayes, by law, no longer have to pay the servicer any additional money on their first mortgage and they will not be evicted from their residence.

Citi, Bank Of America, And JPMorgan Enter Liborgate: Congress Expands Libor Probe To Big Three Domestic Banks

Congressional investigators probing banks’ efforts to rig the London interbank offered rate plan to request correspondence between the Federal Reserve and U.S. banks that help set the rate.

’’What we’re going to do now is expand our inquiry into the domestic banks and see what kind of dialogue began with the Fed and these banks,’’ Representative Randy Neugebauer, a Texas Republican and chairman of the oversight and investigations panel of the U.S. House Financial Services Committee, said in an interview on CNBC today.

Neugebauer intends to request correspondence between the Fed and the three U.S. banks on the Libor-setting panel,JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Bank of America Corp., according to a congressional aide, who spoke on condition of anonymity because the details were not yet public.

Read on.

Bank of America, Syncora settle mortgage fraud lawsuit: sources

(Reuters) – Bank of America Corp (BAC.N) agreed to settle a lawsuit alleging that its unit Countrywide Financial fraudulently misrepresented mortgage-backed securities insured by Syncora Guarantee, sources close to the settlement said.

The terms of the settlement were not immediately available.

In a filing in state court in New York on Tuesday, Syncora Guarantee, a unit of Syncora Holdings Ltd (SYCRF.PK), said it had agreed to discontinue the lawsuit.

Syncora was among bond insurers, including MBIA Inc (MBI.N), that sued Bank of America over representations made by Countrywide, a mortgage lender bought by Bank of America in 2008.

Read on.

And JP Morgan Chase was sued last month by the same company. Click here to read more.

Biloxi Buzz for Wednesday

Birther Sheriff’s ‘Posse’ Claims Obama’s Birth Certificate Is Fake

George W. Bush: ‘8 Years Was Awesome And I Was Famous’

George Zimmerman Called Notorious Koran-Burning Pastor From Jail

Libor Scandal Could Cost Banks Big Bucks