Daily Archives: September 5, 2013

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Feds Launch Criminal Investigation Into JPMorgan Employees

Feds Launch Criminal Investigation Into JPMorgan Employees

NEW YORK, Sept 4 (Reuters) – U.S. authorities are conducting a criminal investigation into whether several employees of JPMorgan Chase & Co tried to impede a regulatory investigation into alleged manipulation of power markets, according to multiple sources familiar with the matter.

The probe, which is in its early stages, is being conducted by the Federal Bureau of Investigation and prosecutors in Manhattan U.S. Attorney Preet Bharara’s office. It comes after a JPMorgan subsidiary agreed on July 30 to pay a $410 million penalty to settle a manipulation case brought by the Federal Energy Regulatory Commission.

The sources said investigators aim to determine whether individuals at JPMorgan – including three Houston-based employees – gave regulators all the information they needed to investigate JPMorgan’s power market deals in California and the Midwest.

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Bank of America Suit Against Two Ex-Bear Stearns Executives Is Dismissed

Bank of America Suit Against Two Ex-Bear Stearns Executives Is Dismissed

Ralph R. Cioffi and Matthew M. Tannin, two former Bear Stearns managers who were among the few executives to face a trial on criminal charges in the aftermath of the financial crisis, have won another legal victory.

Late on Tuesday, a federal judge dismissed a lawsuit brought against Mr. Cioffi and Mr. Tannin by Bank of America. The bank accused the two men of lying about the health of their hedge funds, which had invested heavily in subprime mortgage-backed securities that plummeted in value when the housing market collapsed.

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JPMorgan must face lawsuits over failed credit unions: judge

JPMorgan must face lawsuits over failed credit unions: judge

(Reuters) – A U.S. regulator may proceed with parts of three lawsuits against JPMorgan Chase & Co to recover losses that now-defunct credit unions suffered on billions of dollars of residential mortgage-backed securities, a federal judge in Kansas has ruled.

U.S. District Judge John Lungstrum said the National Credit Union Administration may pursue civil claims that the largest U.S. bank and two companies it bought, Bear Stearns Cos and Washington Mutual Inc, misrepresented the quality of dozens of securities sold to four credit unions in 2006 and 2007.

In a separate decision on Tuesday, the Kansas City-based judge also let the regulator pursue part of a lawsuit against Swiss bank UBS AG over securities sales to two of the credit unions.

The NCUA is pursuing 11 lawsuits as the conservator of five corporate credit unions that suffered losses in the U.S. housing crisis after buying more than $14 billion of mortgage securities.

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Michigan’s Foreclosure King Dave Trott announces 11th District Congressional bid

Michigan’s Foreclosure King Dave Trott announces 11th District Congressional bid

Lawyer Dave Trott announced today that he plans to run against fellow Republican Kerry Bentivolio to represent the 11th Congressional District.

“As a job-creator, I will work every day to create an environment where our economy can grow,” said Trott, who lives in Birmingham with his wife and their three children. “I amcommitted to cutting spending, lowering taxes and promoting the free enterprise system that made our country great. Washington is not working and needs a leader with the common sense and courage to tell the truth. Someone who will spend time helping the constituents of the 11th district, as opposed to someone who is only concentrated on getting re-elected, that is why I am announcing my campaign for Congress.”

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TO DODGE LAW, HIGH-COST LENDER OFFERS CASH FOR FREE

TO DODGE LAW, HIGH-COST LENDER OFFERS CASH FOR FREE

by Paul Kiel ProPublica

Alarmed by the explosion of high-cost lending in the state, cities across Texas have passed ordinances to prevent the cycle of debt that short-term, high-cost loans can create.

But some big lenders are finding clever ways around the laws 2013 like giving away cash for free.

TitleMax promises to “make getting cash easy!” To get a loan, borrowers with “good credit, bad credit, or no credit” need only turn over the title to their car.

In Dallas, San Antonio, and Austin 2013 which have all passed lending laws 2013 those loans have come with zero percent interest.

What’s the catch? After 30 days, the loan is due in full. If the borrower cannot pay 2013TitleMax’s average loan is for $1,300 2013 the borrower is sent to another TitleMax location outside of the city, where he or she can receive a new, unrestricted loan. That loan, states a contract given to one borrower, could have an annual rate as high as 310 percent.

Of course, the borrower would be free to renew the loan at that location 2013 over and over again.

“It’s a bait and switch,” said Ann Baddour of the non-profit Texas Appleseed. “The practice may not be illegal, but it’s definitely unethical and unconscionable.”

TitleMax declined to comment. Like other high-cost lenders, the company touts its products as an option for borrowers who might not qualify for other sources of credit.

An auto-title loan is similar to its better known cousin, the payday loan 2013 but larger and with more at stake. Typically, the borrower hands over title to her car and agrees to pay off the loan after one month. If she can’t do that, she can pay only the interest due and roll over the principal to the next month.

As with payday loans, the cycle can repeat itself over and over. A study by the Consumer Federation of America and Center for Responsible Lending found that the average borrower renews a loan eight times. A borrower who defaults risks having her car seized. (Disclosure: The Center and ProPublica both get significant funding from The Sandler Foundation.)

In six TitleMax contracts from Texas reviewed by ProPublica, the company actually charged an annual rate ranging from 145 to 182 percent.

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FHA plan to recapture once bankrupt borrowers gains fans

FHA plan to recapture once bankrupt borrowers gains fans

The announcement from the Federal Housing Administration last week that its expanding mortgage backing to those who, during the recession, filed for bankruptcy or lost their homes to foreclosure or short sale, left many wondering how beneficial such a program would be.

However, Equifax Chief Economist Amy Crews Cutts believes the program may be more successful than many think — and for different reasons too.

The FHA program requires one hour of counseling, which must be done a minimum of 30 days prior to applying for a loan. Crews Cutts told HousingWire that the hoops people generally are forced to jump through are burdensome, which is one reason the plan will succeed.

She noted that, while it’s only an hour of counseling, the fact that every borrower that applies for the loan has to attend it is likely to weed out borrowers who are less serious about owning a home. “Counseling itself will likely give them some valuable information,” she added.

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States allocate foreclosure money to cover demolitions

States allocate foreclosure money to cover demolitions

States are now allowed to use money from the $7.6 billion foreclosure prevention program to fund demolition activity. Per the Marketplace:

Here we were assisting homeowners to stay in their homes, but then, many of these communities had so many blighted properties that homeowners would throw their arms up and say, ‘I’m never gonna get value out of this house, why am I doing this?’” says Mary Townley, director of homeownership at the Michigan State Housing Development Authority.

Source: Marketplace