Daily Archives: November 20, 2012

Greece Freezes Foreclosures, No Help on Loans

As Greek Prime Minister Antonis Samaras’ coalition government plans to recapitalize the country’s banks with a $64 billion injection, it is also going to freeze home foreclosures in 2013, but has offered beleaguered consumers no help, although many can’t pay consumer loans because of a series of pay cuts, tax hikes and slashed pensions.

Development Minister Costis Hatzidakis unveiled a proposal to the Hellenic Bank Association which provides for a grace period of four years on mortgage loans, with borrowers being allowed to pay only a fixed rate of 1.5 percent and repossessions and auctions halted for next year. The amount of the loan repayment cannot exceed 30 percent of a borrower’s monthly income.

But while the plan provides help for homeowners, it does nothing for those who rent and who are buried under consumer loans and credit cards they can’t pay. Already, more than 25 percent of Greeks have stopped paying banks but many are still being hounded anyway.

Austerity measures imposed by the government on the orders of international lenders have put nearly two million people out of work and closed 68,000 businesses, with scores of thousands more teetering on the brink of bankruptcy.

Read on.

NY A.G. Schneiderman Sues Credit Suisse For Fraudulent Residential Mortgage-Backed Securities

This is NY Attorney General’s second lawsuit against a bank regarding mortgage-backed securities under Martin Act. JP Morgan Chase-Bear Stearns is the first to be sued.

Lawsuit Charges Credit Suisse Misrepresented Loan Quality Review Process, Deceived Investors & Contributed To Mortgage Crisis

Continued Legal Action by State-Federal Residential Mortgage-Backed Securities Working Group

Schneiderman: Credit Suisse RMBS Trusts Incurred Billions In Losses And Will Be Held Accountable

NEW YORK – Attorney General Eric T. Schneiderman today filed a Martin Act complaint against Credit Suisse Securities (USA) LLC and its affiliates for making fraudulent misrepresentations and omissions to promote the sale of residential mortgage­-backed securities (RMBS) to investors. According to Attorney General Schneiderman’s lawsuit, Credit Suisse deceived investors as to the care with which they evaluated the quality of mortgage loans packaged into residential mortgage-backed securities prior to 2008. RMBS sponsored and underwritten by Credit Suisse in 2006 and 2007 have suffered losses of approximately $11.2 billion.

Read more of the NY AG complaint on the NY AG office website.

A copy of today’s complaint can be found at:https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=q0KKrPtMl7CH4ZT6_PLUS_kxoxg==&system=prod

Wells Fargo Must Face Suit Over Overcharging Veteran Loans, Judge Says

Wells Fargo & Co. (WFC), the biggest U.S. home lender, must face a lawsuit that accuses the bank of overcharging veterans under a federal loan-refinancing program, a judge ruled.

U.S. District Judge Amy Totenberg in Atlanta denied Wells Fargo’s bid to dismiss the complaint filed against the bank by two mortgage brokers, saying their allegations are “plausible and sufficient,” according to a decision filed yesterday.

he plaintiffs “have made factually specific allegations regarding mechanics of defendant’s routine practice of creating false documents and making false statements to the VA in order to obtain guarantees on loans,” Totenberg wrote.

Wells Fargo and other lenders were accused in an amended complain filed last year of defrauding veterans and the U.S. out of millions of dollars under a U.S. Department of Veterans Affairs loan refinancing program. The lenders overcharged veterans and concealed their conduct from the government to obtain guarantees for the loans, according to the filing. The mortgage brokers, Victor Bibby and Brian Donnelly, filed the complaint as whistle-blowers.

Read on.

Credit Suisse splits out investment bank

The Swiss bank said it would split its investment banking operations outside of Switzerland from its worldwide private banking business as part of a plan intended to make put “in alignment with the new regulatory reality”.

In a statement to shareholders, Credit Suisse announced that several of its senior managers would be leaving as part of the shake-up, which the bank’s chairman, Urs Rohner, described as a “stepping-up of our strategy”.

“The new structure will create one of the world’s leading integrated wealth management businesses and one of the first global investment banks that is in alignment with the new regulatory reality,” said Mr Rohner.

Read on.

Homeowner Wins Twice Against Freddie Mac

The nation’s largest mortgage company may finally be bending to public pressure. A St. Paul homeowner has scored a pair of victories against Freddie Mac that have allowed her to stay in her foreclosed home, but only after being misled in a move that’s called “dual tracking.”

Caylin Crawford’s problems began when she had a snowboarding accident and wasn’t able to work for a few months. Without the income, she realized she would have trouble making her monthly mortgage payments. U.S. Bank was the originator of her mortgage and Freddie Mac had purchased it on the secondary market. She called U.S. Bank and explained her situation. A U.S. Bank representative told her she could probably qualify for a HAMP (Home Affordable Modification Program) loan but she had to stop making payments, which she did.

While negotiations were in progress, U.S. Bank sent a letter on Oct 11, 2011 stating they would not proceed with foreclosure. But eight days later she got a notice saying her home would be sold at a sheriff’s auction.

The practice is called “dual tracking” and has been used against other Twin Cites homeowners by other lenders such as Citibank.

Read on.

Graphic of the mortgage relief money doled out by banks according to Office of Mortgage Settlement Oversight

A picture tells a thousand words. But look how much mortgage relief money  for short sales vs. loan modification  were doled out by the banks. And I wonder how many of those short sales were owned by the banks vs. owned by investors:

 

LORRAINE BROWN, FORMER HEAD OF DOCX (LPS) INDICTED, FIRST APPEARANCE IN JACKSONVILLE FEDERAL COURT TODAY

Remember the infamous robosigner Linda Green and the investigatative report of foreclosure fraud reported by 60Minutes last year? Well, the head of the company that created fraudulent documents for the banks to foreclose on many homeowners got an early Christmas gift: The head of DocX is indicted and appeared in court today.

People Are Still Losing Homes Under the Robo-Signing Deal

The $25 billion National Mortgage Settlement signed in February was supposed to right the wrongs exposed in the robo-signing scandal and provide relief to homeowners, with a focus on making mortgages more affordable by reducing how much borrowers owe. In a new report from Joe Smith, the settlement’s monitor, one number jumps out: About half the payouts so far are being used to clear troubled mortgages but aren’t keeping people in their homes.

Banks have provided homeowners $20 billion in relief since March. Of that amount, 49 percent has gone to forgive debts in short sales, whereby a bank lets a borrower sell his or her home for less than the outstanding balance on the mortgage. Banks have waived an average of $115,672 in unpaid principal balances in 113,534 short sales. Typically, a short sale is better for a borrower than a foreclosure, but it still means homeowners ultimately lose their houses.

Bank of America (BAC), JPMorgan Chase, (JPM) and Wells Fargo (WFC) leaned most heavily on short sales.

Read on.

Wells Fargo wants DOJ case concerning FHA-insured mortgages dismissed

Wells Fargo & Co.   ($32.40 0.46%) wants a Department of Justice case over losses on mortgage loans insured by the Federal Housing Administration dismissed for violating the statute of limitations and for reiterating claims already made in a now settled case.

The case is a civil fraud action brought by the U.S. Attorney for the Southern District of New York against Wells Fargo for the alleged reckless underwriting of loans written from May 2001 through Oct. 2005.

Read on.

Wall Street Killed Twinkies – Not the Unions

Deadly Clear

Over-Leveraged Acquisitions, Mergers, and Bad Wall Street Investments Killed Twinkies – Not the Unions. Another Death by a Hedge fund.

If it wasn’t obvious after the Wisconsin tirade of union abuse that big business wants to bust all unions – it certainly should be now.  Looking at any company’s or municipality’s financial debacle you will usually find a link to bad Wall Street advice or investments. This is certainly true for Hostess Brands.

Founded in 1930 by Ralph L. Nafziger, the sad story of the demise of Hostess Brands, formerly known as Interstate Bakeries Corporation, and its bankruptcies stem from more recent bad management and investment decisions which created the loss of its employee pension funds – a problem that our government fails miserably to protect and properly regulate.

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