Daily Archives: October 26, 2012

Spanish Mortgage-Backed Bond Manager to Liquidate Two Issues

Titulizacion de Activos SGFT, a Spanish manager of securitizations, said it will liquidate two mortgage-backed bond transactions because of the high default rates and low recovery values on the underlying loans.

TDA 25 Fondo de Titulizacion de Activos and TDA 28 Fondo de Titulizacion de Activos, special purpose companies set up to issue mortgage-backed debt, have “grave and permanent financial imbalances,” the manager said in regulatory statements. Titulizacion de Activos SGFTwill manage the assets to “optimize” recoveries for bondholders, according to the Oct. 18 filings.

The two transactions include a pool of home loans originated by Credifimo, a lender controlled by Banco Civica, which was bought by CaixaBank (CABK) earlier this year. The issuers’ senior notes, sold with the top ratings from Standard & Poor’s and Fitch Ratings before the financial crisis, are now graded CCC, according to data compiled by Bloomberg.

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Titulizacion de Activos SGFT is a manager of transactions set up in 1992 by a group of banks to centralize the management and servicing of securitization activities in Spain. JPMorgan Chase & Co and Bankia group are among existing shareholders.

Source: Bloomberg

Berkshire wins ResCap loan portfolio with $1.5 billion bid

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) won a bankruptcy auction for a Residential Capital LLC loan portfolio with a $1.5 billion bid, ResCap said on Thursday.

Berkshire had been the opening bidder for the portfolio of 47,000 whole loans at $1.44 billion. A second bidder participated in the auction, a source familiar with the situation said, but details weren’t available.

Read on.

Very quietly, Countrywide, BofA settle 5 investors’ MBS fraud suits

Thomson Reuters News & Insight.

Earlier this month, Countrywide and Bank of America very, very quietly settled securities fraud suits brought by five major investors in mortgage-backed securities: the Irish company Sealink, which holds the mortgage-backed assets of the German bank Sachsen; the Franco-Belgian bank Dexia; the German regional banks Landesbank Baden-Wuerttemberg and Bayerische Landesbank; and the Minnesota financial services company Thrivent. Combined, the investors had brought claims for hundreds of millions of dollars for Countrywide’s alleged deceptions about the quality of the mortgages underlying the securities they bought.

If you’re wondering what these particular investors, who brought claims in four different suits, have in common, it’s this: All of them are represented by Bernstein Litowitz Berger & Grossmann, which, as you know, has played a leading role in MBS litigation.

Technically, the dockets in the four cases, which are all part of the Countrywide multidistrict litigation before U.S. District Judge Mariana Pfaelzer, don’t indicate that the suits were settled. They ju s t reflect that on Oct. 19, Pfaelzer granted joint motions for dismissal of the cases with prejudice. In this circumstance, however, that’s a sure sign of settlement. (A BofA representative didn’t respond to my email request for comment; Bernstein partner Timothy DeLange declined to comment.)

Mitt Romney TRANSCRIPTS RELEASED

The testimony was given in 1991 at Norfolk Probate and Family Court in Massachusetts.

During his examination, Romney was asked how he first became acquainted with Staples and Tom Stemberg. Romney explained … a venture capital businessman from another firm “mentioned to me a gentleman named Tom Stemberg had a business plan to commence an office supply chain and was looking for capital to fund that.”

Romney continued, “I told him I didn’t think it was a very good idea, but I’d look at it.”

Read more: http://www.tmz.com/2012/10/25/mitt-romney-transcripts-released-staples-documents/#ixzz2AMw1My7W

And here is the court transcript of Romney’s  testimony. Click here.

In Romney’s testimony, Romney vouched for low price on Staples stock that traded 10 times higher a year later. Read more from Boston Globe. Click here.

Nine more banks were subpoenaed in the probe into the alleged LIBOR manipulation

Royal Bank of CanadaSociete Generale SA (GLE) and Bank of America Corp. are among nine additional banks that were subpoenaed in New York and Connecticut’s probe of alleged manipulation of Libor, a person familiar with the matter said.

The subpoenas, issued by New York Attorney General Eric Schneiderman starting in August, bring to 16 the total number of banks that have been subpoenaed in the states’ investigation, said the person, who asked not to be named because there wasn’t authorization to speak publicly.

Read on.

BofA employees could face charges in US fraud case – prosecutor

NEW YORK, Oct 25 (Reuters) – Bank of America Corp employees could face civil fraud charges as part of a federal lawsuit accusing the bank of causing taxpayers more than $1 billion in losses by selling toxic mortgage loans to Fannie Mae and Freddie Mac, a prosecutor said on Thursday.

The comments were made at a hearing in Manhattan federal court to set a timetable for the U.S. Department of Justice’s first civil fraud lawsuit over mortgage loans sold to the two big mortgage financiers, which the government had announced on Wednesday. Fannie Mae and Freddie Mac were bailed out and put in government conservatorship in 2008.

“Potentially, the government may amend its complaint to include individuals, present or former employees of Bank of America,” Assistant U.S. Attorney Pierre Armand told U.S. District Judge Jed Rakoff.

The judge asked the prosecutors to amend their complaint by year end. The case involves mortgage lender Countrywide Financial Corp, which Bank of America bought in July 2008.

Read on.

Why Freddie Mac Resisted Refis

Why Freddie Mac Resisted Refis.

Why Freddie Mac Resisted Refis

ProPublica, Oct. 25, 2012, 3:23 p.m. Freddie Mac, the taxpayer-owned mortgage giant, made it harder for millions of Americans to refinance their high-interest-rate mortgages for fear it would cut into company profits, present and former Freddie Mac officials disclosed in recent interviews. In closed door meetings, two Republican-leaning board members and at least one executive resisted a mass refi policy for an additional reason, according to the interviews: They regarded it as a backdoor econom…