Daily Archives: March 10, 2014

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FORECLOSURE AND THE FAILURES OF FORMALITY, OR SUBPRIME MORTGAGE CONUNDRUMS AND HOW TO FIX THEM | JOSEPH WILLIAM SINGER

FORECLOSURE AND THE FAILURES OF FORMALITY, OR SUBPRIME MORTGAGE CONUNDRUMS AND HOW TO FIX THEM | JOSEPH WILLIAM SINGER

The subprime mortgage crisis was not only an economic disaster but posed challenges to traditional rules of property law. Banks helped create the crisis by marketing mortgages through unfair and deceptive practices. They induced many consumers to take out high-priced loans they could not afford and then passed the risk to investors who were fooled into thinking these were safe investments. These practices violate traditional norms underlying both consumer protection and securities regulation statutes. In addition, U.S. banks greased the wheels of the mortgage securitization process by creating a privatized mortgage registration system that has undermined the clarity and publicity of property titles. Because of securitization procedures and the lax record-keeping practices, the banks have undermined the property recording system; we no longer have clear public titles to real property in the United States. To fix the mess they left us, we must adopt norms to govern the mortgage market that will protect both homeowners and investors from predatory loans while promoting legitimate property transactions. We also need to fix the mortgage registration system so we have a legal infrastructure for property that both works well and reflects the norms of a free and democratic society.

 

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Bank of America cuts 114 Texas mortgage positions

Bank of America cuts 114 Texas mortgage positions

Bank of America (BAC) is cutting 114 employees from its North Texas mortgage division, according to the Texas 2014 Worker Adjustment and Retraining Notification.

The mega-bank is slashing 74 positions from its Plano location and 40 from the Richardson location. The reduction follows across-the-board plans to cut similar positions at big banks.

“The number of delinquent mortgage loans we service has decreased to one-fourth the peak levels.  As we continue to resolve the needs of customers with delinquent loans, we are reducing the size of the operations that support these specialized programs,” a bank spokesperson said.

Evidence reveals Credit Suisse mortgage lapses

According to an article in The New York Times, new evidence might destroy Credit Suisse’s (CS) clean name during the financial meltdown. Emails were discovered revealing the bank was well aware that it was giving mortgages to questionable applicants.

The documents are noteworthy because Credit Suisse, unlike many other major banks, has refused to settle large lawsuits stemming from the mortgage crisis. The bank has long maintained that its operations were held to a high standard and that the mortgage investments it sold lost value largely because of the broad housing collapse, rather than its practices.

Source: NYT

FBI Investigates Private Prison Nicknamed “Gladiator School”

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

In what is one of the most disturbing private prison stories you’ll ever hear, a facility in Idaho run by Corrections Corporation of America (CCA) in under investigation by the FBI due to claims it was so violent inmates called it “Gladiator School.” So how does a prison transform into such a place? Apparently, CCA was so eager to cut costs that it chose to understaff the facility and hand over control to prison gangs.

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CFPB’s Laurie Maggiano reports few complaints from mortgage servicers

CFPB’s Laurie Maggiano reports few complaints from mortgage servicers

The tension between regulators and those in the mortgage servicing space is colored by mistrust of motive, fear of overreaction, and the general worry that perhaps, in some cases, regulators don’t fully understand the very industry under their aegis.

A panel at Information Management Network’s first-everResidential Mortgage Servicing Rights conference on the effects of state and federal regulations began with an obvious point: it has been a tumultuous couple of weeks in the mortgage servicing space.

(Note: IMN asks for the conference to be off the record. With exceptions, panelists are quoted but not named.)

The moderator started the discussion noting two key date since the start of 2014 – Jan. 10, when the Consumer Finance Protection Board’s mortgage servicing rules went into effect changing the landscape forever, and Feb. 6, when New York’s Department of Financial Services is reportedly putting an indefinite freeze on the $2.7 billion MSR deal between Ocwen Financial Corp. (OCN) andWells Fargo (WFC).

But one panelist, Laurie Maggiano, servicing and secondary markets program manager for the CFPB, said the industry should calm down.

“The world did not stop spinning on its axis after Jan. 10. We are getting very few complaints from servicers,” she said. “Of course, they might not want to talk to us.”

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Worst coupon fail!

Worst coupon fail!

If you are looking for free stuff from a coupon, don’t clip this coupon because this coupon is just ridiculous. Google Offer for “free napkins when you buy coffee.” That’s right, free napkins! You can’t make this stuff up! By the way, the offer is from Otha’s in Brooklyn, New York.

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Fed Staff Suddenly Saw U.S. Economy in 2008 Needing Low Rate Era

Fed Staff Suddenly Saw U.S. Economy in 2008 Needing Low Rate Era

Federal Reserve economists warned in December 2008 that five years could pass before growth revived enough to warrant raising interest rates from near zero, as the magnitude of the economic meltdown dawned on Fed officials.

The warnings, part of preparatory documents for policy meetings in 2008 released by the Fed yesterday, highlight the sudden alarm among central bank staff as the economy began to plunge in the worst downturn in seven decades. Six weeks earlier, the economists had predicted a contraction of no more than 1 percent and said the Fed could restore growth by lowering the main rate to 0.5 percent before tightening in 2010.

By the time of the Dec. 15-16 meeting, Fed staff warned that the central bank would simply be unable to “provide enough stimulus to generate a robust recovery with a relatively quick return of inflation and unemployment to desired levels.”