Daily Archives: July 3, 2014

Financial sector escapes bad jobs report

It’s not what the Challenger, Gray & Christmas revealed in its report Thursday as much as what the report failed to fully include — financial cuts.

If you took a quick glance over most of the past year’s Challenger reports it wouldn’t take more than a few paragraphs to read about how the financial sector was bleeding jobs and slashing positions across the board.

For example, John Challenger, CEO of Challenger, Gray & Christmas, said about the March 2014 job cuts report, “While some of the cuts in the financial sector were related to cutbacks in mortgage lending operations, a large portion of the banking workforce reductions in February were due to the ongoing shift away from branch banking toward increased mobile banking.”

In just the October 2013 report, the financial sector witnessed the second biggest job cuts, with 8,717 layoffs announced and prompting quotes like the following.

“The banking sector is cutting workforce levels as a direct result of an improving economy. Many banks, including Bank of America, which announced 4,200 job cuts in October, are slashing positions in their mortgage department as the number of troubled mortgages and foreclosures dwindles,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, in a statement. “Furthermore, improvements in the economy are also pushing interest rates back up, which is curbing demand for refinancing.”

 

 

Read on.

SunTrust pays $320M to resolve HAMP violations

SunTrust Mortgage (STI) agreed to pay $320 million to resolve the criminal investigation into the company’s Home Affordable Modification Program by the U.S. Department of Justice.

According to the DOJ, SunTrust misled numerous mortgage servicing customers who sought mortgage relief through HAMP.

“Specifically, SunTrust made material misrepresentations and omissions to borrowers in HAMP solicitations, and failed to process HAMP applications in a timely fashion,” the report said.

“This resolution will provide much-needed restitution for victims,” said Attorney General Eric Holder. “It will make available substantial funds to help other homeowners avoid foreclosure. And it will result in the kinds of systemic changes needed to ensure that this will not happen again.”

Read on.

Google Is Being Forced To Censor The History Of Merrill Lynch — And That Should Terrify You

Former Merrill Lynch CEO Stan O’Neal

The European Union’s new law giving people a “right to be forgotten,” which requires Google to remove links to information about them, is having exactly the effect its critics predicted: It is censoring the internet, giving new tools that help the rich and powerful (and ordinary folk) hide negative information about them, and letting criminals make their histories disappear.

Exhibit A: Google was required to delete a link to this BBC article about Stan O’Neal, the former CEO of Merrill Lynch. O’Neal led the bank in the mid-2000s, a period when it became dangerously over-exposed to the looming mortgage crisis. When the crisis hit, Merrill’s losses were so great the bank had to be sold to Bank of America. O’Neal lost his job, but he exited with a $161.5 million golden parachute.

There is nothing incorrect in the post, in fact it’s a rather mild account of O’Neal’s incompetence during the period. O’Neal was forced out of the company after he began discussing selling it without informing his board of directors. This is ancient, well-established history. Having it removed from Google doesn’t undo the fact that it happened. But there is a new generation of 25-year-old investment bankers who perhaps do not have a firm grasp of the 2007 crisis that reshaped banking globally. Their grasp will be ever more slightly weaker due to this new law.

“There is an argument that in removing the blog, Google is confirming the fears of many in the industry that the ‘right to be forgotten’ will be abused to curb freedom of expression and to suppress legitimate journalism that is in the public interest,”  BBC writer Robert Peston says .

Six links to stories in The Guardian not related to O’Neal have also been removed.

Also, Business Insider previously noted that deletion requests were granted for a former politician who wanted to remove links to a news article about his behavior when previously in office — so that he can have a clean slate when running for a new position — and a man who was convicted of possessing child sexual abuse imagery.

So pedophiles can take advantage of this law as well.

Forget.me, a company that expedites Google deletion requests, tells Business Insider that it is fielding 250 requests per day. Here’s a breakdown of what is being deleted from the world’s greatest search engine:

 

View gallery

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google right to be forgotten

 

Forget.me

It’s exactly like the “memory holes” in George Orwell’s “1984,” in which Big Brother’s minions burn information that the government wants people to forget.

But the E.U. law is terrifying for another reason: The entire process is so non-transparent that the consequence for the individual is even worse than what the courts intended.

Read on.

NY regulator mulls probe of CMBS loan servicers

Watch out CMBS loan servicers, NY regulator is eyeing you. The financial crisis was not about the RMBS loan servicers only. The commerical mortgage loans are in trouble too but that hadn’t been focused on to investigate.

New York state bank regulators are preparing an investigation into commercial real estate mortgage loan servicers whose related businesses may be in conflict with the bondholders that the loan companies are supposed to protect, a source with knowledge of the matter told IFR.

The same source said that Benjamin Lawsky, the superintendent of New York’s Department of Financial Services, will be leading the initial investigation.

“He is looking at these firms to identify if subsidiaries they have developed are profiting from loans they are servicing,” the source said.

But public information officer Matthew Anderson at the Department of Financial Services said that reports of an impending investigation are inaccurate and that Lawsky has not stated that he will look into the topic.

The top three servicers of defaulted CMBS loans, by far the most profitable part of the servicing sector, are CWCapital Asset Management, C-III Asset Management and LNR Partners.

Together they held almost 80% of the market for servicing defaulted CMBS loans at the end of 2013, according to Fitch Ratings.

Read on.

A flashback in 2010: U.S. Congressmen Paul Kanjorski and Ken Calvert urged then Treasury Secretary Tim Geithner and then Fed chief Ben Bernanke to restore stability to the commercial real estate sector and that the “deteriorating conditions in the commercial real
estate (CRE) market may threaten an economic recovery.” Here is the letter. Click here.

 

Obama Says Further Changes to Banking Industry Are Needed

WASHINGTON—President Barack Obama, in a radio interview Wednesday, said further banking industry reforms were likely needed to limit excessive risk-taking beyond the changes written into the 2010 Dodd-Frank financial law.

In an interview with the Marketplace radio program, Mr. Obama lauded the nearly four-year-old Dodd-Frank law for requiring large banks to hold bigger capital cushions and for tightening consumer protection rules. But he singled out bank trading desks as being a particular area of lingering concern.

“What I’ve said to my economic team, is that we have to continue to see how can we rebalance the economy sensibly, so that we have a banking system that is doing what it is supposed to be doing to grow the real economy, but not a situation in which we continue to see a lot of these banks take big risks because the profit incentive and the bonus incentive is there for them,” Mr. Obama said, according to a transcript posted on Marketplace’s website. “That is an unfinished piece of business.”

Mr. Obama also suggested that some changes could include “restructuring the banks themselves.”

“Now what we’ve been able to do is to try to prevent taxpayers from being the folks who are left holding the bag,” he said. “But it’s still not a real efficient way for us to run a financial system. That’s going to require some further reforms. That’s going to require us looking at additional steps that we can take.”

Mr. Obama didn’t specify what types of changes he had in mind, and lawmakers on Capitol Hill aren’t actively working on new regulatory changes. Many Republicans have called for Dodd-Frank’s repeal and the U.S. House has passed a number of bills that would reverse much of the law. At the same time, many of the Dodd-Frank rules have yet to be fully implemented, including the Volcker rule, which bans banks from making risky bets with their own money.

Read on.

Rental payment histories may count in credit scores

NEW YORK – July 2, 2014 – Renters who have never made a late rent payment often find that their stellar record doesn’t do anything to lift their credit scores when it’s time to shop for a mortgage. But that may soon change: Two of the main credit reporting agencies, Experian and TransUnion, are reportedly starting to incorporate verified rental payment data into credit files and using it as part of a consumers’ credit score.

“At a time when record numbers of first-time buyers are missing in action in the home-purchase market – many of them in part because their credit scores don’t make the grade – the non-reporting of key credit records is costly to them and the economy as a whole,” The Columbus Dispatch reports.

Read on.

Court Order Re: JP Morgan Chase Executed and Recorded False Documentation Purporting to Transfer Ownership and that a Chase Executive Created a Fraudulent Document

In September 2012, the trial court entered a judgment on the stipulation in favor of the Kalickis. The judgment stated that the Kalickis owned the property and quieted title in their favor. It also found that Chase had executed and recorded false documentation purporting to transfer ownership of the Kalickis’ mortgage to Chase and that a Chase executive created a document in which Chase fraudulently represented that a prior assignment had been lost and that Chase owned the Kalickis’ mortgage. The judgment voided the fraudulent documents and enjoined Chase from recording any false or misleading documents representing that it owned the Kalickis’ mortgage.

The judgment against Chase established that Chase created false documents purporting to give it an ownership interest in the Kalickis’ loan and deed of trust. Accordingly, when Chase purchased WaMu, the Kalickis’ claims against WaMu became intertwined with Chase. Although the WaMu Conduct Claims were ultimately dismissed, this did not occur until after Chase admitted it did not hold an ownership interest in the loan and deed of trust.

Here is the court document. Click here.