Daily Archives: February 15, 2014




he CFPB announced that it is seeking feedback on potential changes to mortgage information reported under the Home Mortgage Disclosure Act (HMDA). Data collection seems like a pretty obscure issue, but some Republicans and financial industry interests have been attacking the CFPB for collecting so much data. Given the rapid changes in the consumer financial services sector, it seems to me that collecting more data about the types of products being offered to different types of consumers is essential to regulating that sector. For those unfamiliar with HMDA, it

was enacted in 1975 to provide information that the public and financial regulators could use to monitor whether financial institutions were serving the housing needs of their communities and providing access to residential mortgage credit. The law requires lenders to disclose information about the home mortgage loans they sell to consumers. HMDA was later expanded to capture information useful for identifying possible discriminatory lending patterns.

In the wake of the recent mortgage market crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred HMDA rulemaking authority to the CFPB. The law directs the Bureau to expand the HMDA dataset to include additional loan information that would be helpful in spotting troublesome trends. (1)

 The CFPB is considering requiring the following information pursuant to HMDA:

  • total points and fees, and rate spreads for all loans
  • riskier loan features including teaser rates, prepayment penalties, and non-amortizing features
  • lender information, including unique identifier for the loan officer and the loan
  • property value and improved property location information
  • age and credit score (1-2)

There are additional data points under consideration, but these five alone would go a long way to identifyingpredatory trends as they are developing in the mortgage market. Lay people are probably unaware of the rate of change in the industry, but during boom times the kinds of products that are popular can change dramatically in a few months. It is hard enough for regulators to keep on top of such rapid changes, but it is even harder when they only have access to some of the relevant information. The CFPB’s proposal is a step in the right direction as it seeks to get a handle on the market that it regulates.


Goldman Sachs and Deutsche Bank decide to stop trading uranium after links to Iran exposed

Goldman Sachs and Deutsche Bank decide to stop trading uranium after links to Iran exposed

LONDON (Reuters) – Goldman Sachs and Deutsche Bank are quietly trying to get out of a business few people know they are even in: trading supplies of raw uranium known as yellowcake.

In the last four years, the banks have amassed low-grade stockpiles of the nuclear fuel ingredient larger than those held by Iran, and enough to run China’s nuclear plants for a year.

Goldman’s uranium business can trace its roots back to an apartheid-era South African trading conglomerate that sold Iran its only known source of foreign yellowcake 35 years ago. To this day, that uranium delivery underpins Iran’s disputed enrichment program, which western powers fear is aimed at developing atomic weapons, although Iran denies that.

Now, under mounting political scrutiny of Wall Street’s role in physical commodities trading, and following a collapse in demand after the Fukushima disaster, both firms have put their uranium trading desks up for sale. But other banks are already lining up to take their place.

The history of Wall Street in uranium markets illustrates just how far banks moved into physical commodities trading during the natural resources boom of the last ten years.

Through its nuclear trading desk, known as NUFCOR International Limited, Goldman has a deal to market the vast majority of South Africa’s uranium production from one of the country’s largest miners.


Wells Fargo edges back into subprime as U.S. mortgage market thaws

Wells Fargo edges back into subprime as U.S. mortgage market thaws

(Reuters) – Wells Fargo & Co, the largest U.S. mortgage lender, is tiptoeing back into subprime home loans again.

The bank is looking for opportunities to stem its revenue decline as overall mortgage lending volume plunges. It believes it has worked through enough of its crisis-era mortgage problems, particularly with U.S. home loan agencies, to be comfortable extending credit to some borrowers with higher credit risks.

The small steps from Wells Fargo could amount to a big change for the mortgage market. After the subprime mortgage bust brought the banking system to the brink of collapse in the financial crisis, banks have shied away from making home loans to anyone but the safest of consumers.


Bank of America customers could be due money for robocalls

Bank of America customers could be due money for robocalls

If you received collection calls on your cellphone from Bank of America in the past few years, you could be in line for $40.

The Charlotte bank agreed to a $32 million settlement in September, resolving several class action lawsuits alleging Bank of America illegally used robocall systems to contact credit card and mortgage customers on their cellphones. A judge approved the deal in December.

Attorneys in the case are now looking for people to sign up to be part of the settlement. The deadline to file a claim is next month. People will get between $20 and $40, depending on how many file claims.

Bank of Amerca denies wrongdoing. “We’re pleased to resolve this matter,” spokeswoman Betty Reiss said in a statement. “Bank of America denies the allegations, but agreed to settle the claims to avoid further legal costs.”


Investors Warn Of Fresh Barclays Pay Revolt

Investors Warn Of Fresh Barclays Pay Revolt

Barclays is facing a battle to avert a mass revolt of its leading investors at this year’s annual meeting amid fury over the £2.4bn bonus pool announced this week.

Sky News has spoken to a number of Barclays’ biggest shareholders who have warned in recent days that they are unlikely to be dissuaded from voting against the bank’s remuneration report or individual directors involved in setting pay.

They are furious that Antony Jenkins, the chief executive, announced this week that bonus payments for 2013 were 10% higher than the previous year despite a slump in profits from £7bn to £5.2bn.

Investors will not cast their votes until much closer to Barclays’ annual meeting on April 25, but three big City institutions said a major revolt looked “inevitable”.

A significant ‘no’ vote would be damaging to Barclays in a number of ways, not least because this year’s AGM will be the first at which shareholders will possess a binding vote on the bank’s planned pay policies.


Lender Processing Services to pay $6 million to Nevada in settlement

Lender Processing Services to pay $6 million to Nevada in settlement

Nevada has reached a $6 million settlement with Lender Processing Services Inc. that resolves the state’s civil action alleging the firm violated the state’s deceptive trade practices act, the state attorney general announced Friday.

The settlement also resolves all other outstanding issues or claims related to the litigation, Catherine Cortez Masto said in a statement. Lender Processing Services is now known as Black Knight Financial Services.

Nevada originally decided not to join a multi-state settlement with LPS signed in 2011 with 49 other states. LPS was recently acquired by Fidelity National Financial Inc., which allowed for negotiations to begin again, the attorney general said.

Under the terms, LPS will pay Nevada $5.5 million and $500,000 in attorney fees and costs. The company will also review all documents executed between Jan. 1, 2008 and Dec.31, 2010 to determine what documents, if any, need to be re-executed or corrected.

The attorney general said that Nevada would receive the nation’s fourth-highest settlement, after California, Florida and Texas.


New York Attorney General: Zombie property killer

New York Attorney General: Zombie property killer

New York Attorney General Eric Schneiderman is ready to raze hell over zombie properties infecting the Empire State.

Schniederman said that he will introduce legislation to compel banks and mortgagees to maintain vacant properties that are abandoned because of delays in the foreclosure process.

More directly, Schneiderman will propose a bill that would double the number of non-profit land banks that will be able to buy abandoned and foreclosed properties to rehab them or to raze them to the ground.

Schneiderman says such legislation is needed because of the slate of vacant homes in the state. When lenders don’t complete the foreclosure process and take possession these empty properties are called “zombie properties.”