Daily Archives: August 2, 2012

Ed DeMarco Is in Line to Replace Himself

Edward DeMarco’s refusal to allow principal forgiveness at Fannie Mae and Freddie Mac has led to renewed calls for his head. A little-known fact is that replacing DeMarco as acting director of the Federal Housing Finance Agency might not make a bit of difference, even if legal hurdlesto his ouster could be surmounted.

The 2008 law that created FHFA restricts who can be appointed as the agency’s “acting director.” Under the law, President Barack Obama would have to choose among three deputy directors at FHFA, two of whom were hand-picked by DeMarco. And the third? It’s DeMarco himself, who remains FHFA’s deputy director for housing mission and goals.

Obviously it’s impossible to know whether the two deputy directors picked by DeMarco — Jon Greenlee and Stephen Cross — oppose principal reduction to the degree their boss does. But given the staff analysis FHFA released yesterday, the opposition to principal write-downs at Fannie and Freddie extends beyond the top boss.

Read on.

Class action: Wells Fargo, Fannie Mae, and Assurant sued for wrongful business practices relating to force-placed insurance

Courthouse News Service.

 

NEW ORLEANS – Wells Fargo Bank sells force-placed flood insurance with Assurant, for a kickback, a class action claims in Federal Court. A similar class action was filed against Bank of America and Balboa Insurance.

Here is the class action complaint.

Miami mayor to declare financial emergency

 

MIAMI (WSVN) — The City of Miami is ready to declare a financial emergency just a day after the city’s credit rating was called into question.

Moody’s has announced it could downgrade the City of Miami’s credit rating due to the SEC investigation announced Wednesday into allegations that the city had misled investors. This has caused great concern for City of Miami officials, as they gathered for an emergency meeting Thursday to look at what must be done.

There are various reasons for concern by officials. Should its credit rating be downgraded, the city would have to pay more in interest to borrow money. Another concern is when Moody’s, one of the nation’s top three credit agencies, goes through the books, they will want to see that the city has a balanced budget. However, the City of Miami happens to be $40 million short.

Read more: http://www.wsvn.com/news/articles/local/21008101843484/miami-considers-declaring-fiscal-emergency/#ixzz22MTbpYfo

County joins suit against Fannie Mae, Freddie Mac

County joins suit against Fannie Mae, Freddie Mac.

 

Kay County Commissioners voted Monday to join a class action lawsuit against Fannie Mae and Freddie Mac to collect unpaid mortgage fees.

Commissioners planned to approve an official contract on Wednesday with the Mitchell and DeClerck P. L. L. C.., Attorneys at Law, from Enid to represent the county in the suit.

Roger L. Ediger, P.C., an Enid attorney, discussed the issue with the commissioners on Monday.

Ediger said that 10 states have filed the class action suit, Kay and Garfield Counties are the only two from Oklahoma thus far.
The dispute is over the mortagae fees paid to counties when a property is sold.

Baltimore Mayor Leads Suit Against Banks That May Have Cost Cities Billions

New America Media website:

Lost Money Equals Closed Services

And the banks that set the rate are now the subject of a class-action suit by multiple plaintiffs, led by the City of Baltimore, an urban center that has been struggling to make ends meet. For the past three fiscal cycles — including the one that began on July 1 — the city has grappled with multimillion-dollar deficits.

The city’s fiscal managers have been forced to take extreme measures, from forcing city employees to take unpaid furloughs to making drastic changes in the city’s public-employee pension system to cutting off funds for the historic Poe House, the family home of Edgar Allan Poe.

In the face of budgetary strife, Mayor Stephanie Rawlings-Blake has taken a fighting stance. “We cannot stand by when we feel that we are being cheated,” she told CBS-TV. “You’re talking about $1 or $2 million. You know, that’s a fire company, that’s recreation centers. That’s services that our city needs, and we’re going to fight for that.”

Baltimore invested hundreds of millions in “interest-rate swaps,” which were devalued by rate-setting banks. Between 2006 and 2009, those “swaps” allegedly kept LIBOR artificially low. The scheme was ordered by bank managers to suggest that their banks were, during a time of economic troubles, more liquid than they actually were, say attorneys for the plaintiffs.

The result was that Baltimore and a large class of cities, states, pension funds and mutual funds received less than they should have in interest payments from banks. According to one estimate, about three out of four major American cities [http://huff.to/S7d5T8] hold bonds linked to the Libor rate.

Baltimore has not given estimates of its potential losses. “Our basic approach about it is that the question [of damages] is likely to be the subject of discovery in the litigation,” said Baltimore City Solicitor George Nilson.

Rochester man loses foreclosure case against Wells Fargo

A local man who has been fighting with Wells Fargo over the foreclosure of his home — even traveling to Washington, D.C., to be part of a national protest against home foreclosures — lost his case against the bank Wednesday.

State Supreme Court Justice Elma Bellini ruled that Wells Fargo was indeed capable of bringing an eviction notice to Leonard Spears, of Ries Street. She also said that the notion that Spears was not personally served with papers was not relevant, citing previous court precedents.

“As much as it may pain me to do so, I think I have to follow what is appropriate and legal in this particular case,” Bellini said.

Spears’ lawyers had based their arguments mainly on the notion that Wells Fargo was not legally able to serve an eviction notice to Spears because the bank did not own the home at the time, having sold the property to Freddie Mac.

Read on.

How Chase Ripped Off Its Own Credit Card Customers

First came the bait: for an up-front fee, you can transfer the balance from your home equity loan, car loan or other credit card balance to your JP Morgan Chase credit card, and get a low fixed rate that applies until the loan was paid off.

Then came the switch: Surprise. The minimum monthly payment jumps from 2% of the loan balance to 5% of the loan balance — and you have to pay a $10 monthly charge too. For example, a cardholder carrying a $20,000 balance on one of these long-term fixed rate loans would see his or her minimum payment increase from $400 to $1,000 as a result, according to lawyers for the cardholders.

Consumers filed 14 separate class action complaints in various federal district courts, charging that Chase violated the Truth in Lending Act and breached its contract with the consumers. Now, just as the cases were about to go to trial in federal court in California, Chase settled for $100 million.

Read on.