States used mortgage settlement money to balance budgets
States have no role in providing the $51 billion in relief to homeowners. But states do have wide discretion over the additional $2.5 billion, which was intended to ameliorate the housing crisis.
Instead, according to a state-by-state list compiled by the National Conference of State Legislatures, many of them found other uses for the money:
- Texas put almost its entire $135 million share into its general fund, then spent it on largely non-housing activities.
- Arizona spent $50 million of its $98 million share to balance its budget.
- Georgia has set aside its entire $99 million for economic development.
- Kansas spent 25 percent of its nearly $14 million share for activities related to mortgage fraud, and the rest went to its general fund.
- Nebraska is depositing its entire $8 million into its rainy day fund.
- Virginia has directed all but $7 million of its $67 million allotment into its general fund.
Other states, however, did use the money for housing-related initiatives. Connecticut, for example, used $22 million of its $26 million on emergency mortgage assistance. Colorado spent nearly half of its $50 million to help homeowners modify their loans, and the rest of the money on counseling and legal services. And Pennsylvania has set aside 90 percent of its $67 million for its housing finance agency, NCSL said.
Andrew Jakabovics of Enterprise Community Partners, a national affordable housing group, estimated states are spending only $1.4 billion of the $2.5 billion for housing-related purposes. Jakabovics co-authored an October 2012 report on how states were spending the money. At that point, six months after the mortgage settlement, states had announced plans to spend $966 million for housing and foreclosure-related activities, and had diverted $988 million to their general funds or spent it on other non-housing activities.
Iowa Attorney General Tom Miller, who took the lead in the joint state-federal investigation into the banks’ mortgage practices, said state lawmakers have the authority to do what they want with the money. “If policymakers in a particular state decided that the foreclosure crisis caused significant damage to their economy, one could make the case that that state should be able to use some of the settlement money to address that harm,” Miller said.
GLASKI V. BANK OF AMERICA, N.A. | UPDATED DOCKET . . . NOTE: ATTEMPT TO DEPUBLISH CASE.
letter to Supreme Court dated 10/4/13 from atty Glavinovich obo JPMorgan Chase requesting to depublish opinion (JAA)
FDIC files objection in Bank of America MBS settlement case
According to The Wall Street Journal, Bank of America(BAC) may see a nearly closed mortgage-backed securities case reopened after the U.S. government filed an objection, derailing a proposed $500 million settlement the lender made earlier this year over allegedly defective mortgages.
Late Monday night, the Federal Deposit Insurance Corporation filed an objection against the settlement Bank of America announced in April regarding allegations it sold billions of dollars of mortgage-backed securities backed with defective loans originated by mortgage-lender Countrywide, which it purchased in 2008. The plaintiffs said that by late 2008, virtually all of those certificates were downgraded to junk bond status.
UK prosecution agencies reluctant to prosecute corporate offenders over LIBOR
On 30th September, David Corker spoke about recent developments in financial crime at the Financial Services Investigations and Enforcement conference in London. Among the current trends identified by David was the ongoing disconnect in the way in which UK regulators and prosecutors seek to sanction corporate and individual criminality. The existence of this disconnect has become particularly stark as a result of the ongoing investigations by the FCA and SFO into alleged manipulation of the London Interbank Offered Rate (“LIBOR”) and Euro Interbank Offered Rate (EURIBOR).
The FCA has taken the lead with its investigations having already resulted in announcements of significant fines on financial institutions. To date Barclays Bank, UBS, RBS and ICAP have been fined £59.5m, £160m, £87.5m and £18m respectively for misconduct relating to LIBOR and EURIBOR. It is widely anticipated that a further fine of Rabobank will be announced by the FCA in the coming weeks.
The SFO has followed in the wake of the FCA probes with its investigation into the criminal conduct of individuals employed by those institutions whose alleged misconduct led to the above fines being levied. Three people have been charged by the SFO between June and July this year with offences of conspiracy to defraud in connection with the manipulation of LIBOR.
There has been no suggestion by the Director of the SFO, David Green QC, that any of the financial institutions implicated in this scandal might themselves be in jeopardy of prosecution. Indeed, if any such criminal proceedings were a possibility, the FCA would not have sanctioned anyone. The SFO’s apparent lack of interest in making a bank accountable is despite the fact that the FCA’s investigations concluded that manipulation of LIBOR was endemic and involved senior management at high levels.
A JPMorgan Ph.D.?: JP Morgan’s new pet project to raid education
JPMorgan Chase plans to give $17 million to start a doctoral program at the University of Delaware, an effort that may raise new questions about collaborations between colleges and donors.
As part of the plan, JPMorgan will renovate a building to house the program, put up money to pay program faculty and pay a full ride for students seeking a degree, according to an internal university plan. In addition, JPMorgan employees may sit on dissertation committees and advise the university on which faculty members should teach in the program, according to the planning document and a top university official.
Some faculty critics warn that the degree, which has not yet been approved, could damage Delaware’s credibility, and one faculty leader has dubbed the proposed degree the “JPMorgan Ph.D.”
Class action suit against JP Morgan Chase for overdraft services
HAYWARD, Calif. – JPMorgan Chase Bank wrongfully charges fees for overdraft services against checking account holders who never opted in, a class claims.