Daily Archives: June 10, 2014


EU Accuses ICAP of Helping Banks Manipulate Yen Libor

EU Accuses ICAP of Helping Banks Manipulate Yen Libor

European Union regulators on Tuesday accused interdealer broker ICAP IAP.LN -0.05%PLC of helping banks manipulate the yen Libor benchmark interest rate, three weeks after filing similar allegations against three banks.

The allegations are the latest stage of a two-year investigation by EU antitrust authorities, one in a series of probes into alleged market abuse by financial institutions.

London-based ICAP said it received a so-called statement of objections from the European Commission, the EU’s executive arm, “alleging that ICAP acted as a facilitator to breaches of EU competition law by certain banks in relation to Yen Libor for isolated periods between 2007 and 2010.”


Former Rabobank Trader Pleads Guilty in Scheme to Manipulate Yen LIBOR

Former Rabobank Trader Pleads Guilty in Scheme to Manipulate Yen LIBOR

U.S. Department of JusticeJune 10, 2014
  • Office of Public Affairs(202) 514-2007/ (202) 514-1888

WASHINGTON—A former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) Japanese yen derivatives trader pleaded guilty today for his role in a conspiracy to commit wire and bank fraud by manipulating Rabobank’s Yen London InterBank Offered Rate (LIBOR) submissions to benefit his trading positions.

Attorney General Eric H. Holder, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division, and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

Today, a criminal information was filed in the Southern District of New York charging Takayuki Yagami, a Japanese national, with one count of conspiracy to commit wire fraud and bank fraud. Yagami pleaded guilty to the information before United States District Judge Jed S. Rakoff in the Southern District of New York.

“With this guilty plea, we take another significant step to hold accountable those who fraudulently manipulated the world’s cornerstone benchmark interest rate for financial gain,” said Attorney General Eric Holder. “This conduct distorted transactions and financial products around the world. Manipulating LIBOR effectively rigs the global financial system, compromising the fairness of world markets. This plea demonstrates that the Justice Department will never waver, and we will never rest, in our determination to ensure the integrity of the marketplace and protect it from fraud.”

“Today, a former Rabobank trader has pleaded guilty to participating in a scheme to manipulate the global benchmark interest rate LIBOR to benefit Rabobank’s trading positions,” said Assistant Attorney General Caldwell. “This was the ultimate inside job. As alleged, traders illegally influenced the very interest rate on which their trades were based, using fraud to gain an unfair advantage. Takayuki Yagami is the ninth person charged by the Justice Department in connection with the industry-wide LIBOR investigation, and we are determined to pursue other individuals and institutions who engaged in this crime.”

“Today’s guilty plea is a significant step forward in the LIBOR investigation and demonstrates the department’s firm commitment to individual accountability,” said Deputy Assistant Attorney General Snyder. “We will continue to pursue aggressively other individuals involved in this or other illegal schemes that undermine free and fair financial markets.”


Larry Summers Just Contradicted Tim Geithner On Obama’s Foreclosure Mess

Larry Summers Just Contradicted Tim Geithner On Obama’s Foreclosure Mess

Larry Summers and Timothy Geithner are clearly not on the same page about that foreclosure crisis they inherited in 2009.

The two former Obama administration officials recently published contradictory accounts of their efforts to overcome the epidemic of home foreclosures that swept the nation. In response to a compelling new study by Atif Mian and Amir Sufi that concludes the government could have catalyzed broad economic benefits by adopting a more aggressive housing debt program, Summers said last week that everyone on the Obama team really wanted to do exactly that.

“We all believed in 2009 what Mian and Sufi have now conclusively demonstrated — that reducing mortgage debt would spur consumer spending,” Summers, the former director of the National Economic Council, wrote in the UK-based Financial Times. “And there was intense frustration with how few homeowners our programmes were reaching, to the point where I convened all the relevant officials from the Treasury, the Housing and Urban Development department and other agencies every month for two years to challenge them to find ways to accelerate the process and to make sure that they were considering all the various schemes academics and others were suggesting. So Mian and Sufi are not wrong in their dissatisfaction.”

Which is very nice. It’s also diametrically opposed to the detailed justification for inaction that former Treasury Secretary Geithner offered in his new book, Stress Test:

We did not believe, though we looked at this question over and over, that a much larger program focused directly on housing could have a material impact on the broader economy. Jan Eberly, the assistant secretary of economic policy, took a fresh look at these alternatives later, and her analysis concluded that even if the federal government had borrowed and spent $700 billion to wipe out every dollar of negative equity in the U.S. housing market — a “principal reduction” program of utopian proportions — it would have increased annual personal consumption by just 0.1 to 0.2 percent. The projected impact on employment was relatively modest, too, amounting to a cost of about $1.5 million of federal spending per job created. By contrast, our auto rescue had cost about $14,000 for each of the one million jobs it had saved. In other words, even if Congress had authorized the mother of all principal reduction programs, as expensive as TARP and almost as expensive as the Recovery Act, it wouldn’t have changed the trajectory of the recovery.


Citi loses bid to stop L.A. mortgage discrimination suit

Citi loses bid to stop L.A. mortgage discrimination suit

Pay attention, JP Morgan!

(Reuters) – A lawsuit by the City of Los Angeles accusingCitigroup Inc of mortgage discrimination can go forward, a federal judge ruled on Monday, turning down the bank’s motion to dismiss the case stemming from last decade’s real estate boom.

The lawsuit, filed in December, accuses Citigroup of engaging in a “continuous pattern” of discrimination since at least 2004 by targeting minorities for high-cost mortgage loans, violating the U.S. Fair Housing Act. The city is seeking damages from the bank for the costs of extra services and lost tax revenue in blighted neighborhoods.

Citigroup is one of four banks that Los Angeles has sued since December for allegedly giving minorities home loans they could not afford, resulting in a wave of foreclosures and a lower tax base.


Wells Fargo Loses Bid to Block FHA Mortgage-Fraud Lawsuit

Wells Fargo Loses Bid to Block FHA Mortgage-Fraud Lawsuit

Case Title

USA, et al v. Bank of America Corporation, et al

Case Number



Appellate – DC Circuit

Nature of Suit

2890 Other Statutory Actions

Law360, Washington (June 10, 2014, 1:15 PM ET) — The D.C. Circuit on Tuesday rejected Wells Fargo & Co.’s bid to free itself from a False Claims Act suit and mortgage fraud claims that it alleged were settled when it paid $5 billion as part of a nationwide mortgage settlement, saying the bank had misread the scope of the agreement.

In a unanimous per curiam opinion, the three-judge panel determined that Wells Fargo’s $5 billion contribution to the overall $25 billion mortgage settlement cannot prevent the Federal Housing Administration from pursuing its own FCA suit…


Bank of America sells 10 branch locations

Bank of America sells 10 branch locations

HomeTrust Bancshares (HTBI), the holding company forHomeTrust Bank, signed an agreement under which HomeTrust Bank will purchase the branch banking operations of ten locations in Virginia and North Carolina from Bank of America (BAC).

This acquisition will add approximately $504 million of deposits at a deposit premium of 2.86%.

In addition, six of the branches are located in Roanoke Valley, two in Danville, one in Martinsville, Virginia, and one in Eden, North Carolina.


The cost of closing mortgages is officially ridiculous

The cost of closing mortgages is officially ridiculous

It’s the trust factor in the banks is the reason why the public are not getting home equity loan or refinancing. And now the banksters are blaming the CFPB and their rules as to why people are not getting a loan. lol.

After drastically tumbling in the fourth quarter of 2013, the first quarter of 2014 not only got worse for banker profits but also traveled into negative territory, according to the Quarterly Mortgage Bankers Performance Report from theMortgage Bankers Association

Independent mortgage banks and mortgage subsidiaries of chartered banks posted a net loss of $194 on each loan they originated in the first quarter of 2014, significantly down from $150 in profit per loan in the fourth quarter of 2013.

This is the sixth consecutive quarter that production income has decreased.

“The significant overall production volume decline in the first quarter hurt mortgage bankers,” said Marina Walsh, MBA’s vice president of industry analysis. This falls in line with other comments made today from mega-mortgage lender Wells Fargo [WFC]. The chief financial officer said at an investor conference this morning the new rules from the Consumer Financial Protection Bureau areconstraining production capabilities and preventing less credit-worthy borrowers from obtaining a mortgage.

“Purchase volume did not pick up, while refinancing volume dropped and costs continued to rise. Given these conditions, companies that managed to break even in the first quarter should consider that a reasonable outcome,” Walsh added.

But one of the biggest culprits of the dramatic decline: total loan production expenses, which hit the highest recorded amount in any other quarter since the report was created in the third quarter of 2013.


Banks search for loopholes in leveraged loan guidelines

Banks search for loopholes in leveraged loan guidelines

This is not surprising..

Wall Street banks are playing cat-and-mouse with U.S. regulators over rules that seek to reduce lending for deals that load up companies with too much debt, as they try to retain a profitable business and meet demands from clients and investors.

Leveraged lending is one of the most lucrative forms of loans for banks, giving Wall Street an incentive to accommodate borrowers as much as it can. Banks fees on U.S. junk-rated loans stand at $4.9 billion so far this year, a year-to-date record and up 10 percent from the same period last year, according to Thomson Reuters and Freeman Consulting data.

The guidelines, issued by the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp in March last year, generally seek to restrict banks making loans in deals such as leveraged buyouts that would leave a company with debt levels that are more than six times its annual cash flow. Since the guidelines were issued, regulators have warned lending standards have in fact deteriorated.


Nationstar Declares Woman Bankrupt

Nationstar Declares Woman Bankrupt

(KUTV) Vicki Davey has owned her Taylorsville home for 25 years making faithful payments each and every month. But a surprise for Davey last December when her mortgage company stopped sending her monthly statements. And a bigger surprise when she learned why.

“My mortgage company has stopped sending me my statements because they have said that my home is in bankruptcy,” she said. “I am not in bankrupt!”

Davey’s says Nationstar, her lender, seemed confused. So Davey investigated on her own and learned that someone else with the same name as her husband had recently declared bankruptcy.

Davey says that several times over the course of several months she has sent evidence that the bankruptcy is not hers to Nationstar to try and get her mortgage properly reinstated. In the meantime she faithfully continues to make her mortgage payments. Without statements, however, Davey fears the money is not being applied to her mortgage.

“I just wanted to make sure they’re applying it because I don’t want to one day wake up and [hear], ‘Hey get out. You don’t own this home,'” she said.

Not getting any result on her own, Davey decided to Get Gephardt.

Get Gephardt called Nationstar, not through customer service but through the company’s media relations department. A spokesperson called Davey’s situation a, “good old fashioned mistake,” and promised to straighten it out.

Just like that, Davey’s account is back to normal and her statements are once again arriving in the mail.


Disabled military veteran says Nationstar bank set to sell her home at auction

Disabled military veteran says Nationstar bank set to sell her home at auction


One military veteran in Volusia County thought she had reached a deal to modify the mortgage on her house, but she called Channel 9’s Angela Jacobs when she learned it is about to go up for auction. 
Donna Driscoll told Jacobs that she has the money set aside to pay up, but now the bank won’t take it.
Driscoll is a sixth-generation veteran who has been all over the world. She said all she ever wanted to do was retire in her hometown. But now, staying in the home that was personally customized for her disability is in jeopardy. 
“Why should we have to move and pack up everything? I would just like to stay in my little house,” said Driscoll.
The former military police officer said she doesn’t know where she’ll go if her house is sold at an auction, set to start Saturday. She said it is all because her lender won’t allow her to pay for her custom wheelchair-accessible home.
“It’s been one aghast moment after another,” said Driscoll.
It all started three years ago when Bank of America agreed to a loan modification for Driscoll, but then abruptly sold her mortgage to its subsidiary Nationstar. 
“I would never have closed if I didn’t trust them,” said Driscoll.
Driscoll has paperwork that she said shows her loan modification would be honored in the deal. She said that days later Nationstar said it couldn’t find that documentation and less than six weeks after that her house was sold to Bank of America.
“And then Bank of America would say, ‘Oh no, it’s Nationstar, contact Nationstar. And they’d bounce us back to Bank of America. So it’s been this massive rollercoaster,” said legal assistant Pam Lauer.
Now a legal team is fighting to get anyone to hear Driscoll’s case, after a county judge sided with the lender to push forward with the foreclosure.