Daily Archives: October 3, 2014

Congress Considers Federal Assistance For Laid-Off Coal Miners

But not the recent unemployed workers who are still waiting for a federal extension…

Submitted by Nick Cunningham via OilPrice.com,

A major coal mining company has announced another round of layoffs as declining demand for coal continues to depress the industry.

Alpha Natural Resources, the world’s third largest supplier of metallurgical coal, said Sept. 26 that it would be shuttering three mines in West Virginia due to “sustained weak market conditions and government regulations challenging the Central Appalachian mining industry.”

The closures will put 261 people out of work. The news has a familiar refrain; more than 20,000 coal miners have lost their jobs since 2011.

But coal mining jobs have been disappearing for more than 30 years. As of March 2014, there were around79,000 jobs in coal mining in the United States, 8.3 percent fewer than a year earlier.

Compare that to the solar industry, which employs around 143,000 people, according the Solar Energy Industries Association.

The fortunes of the two energy industries will only diverge further in coming years. Sadly, many political leaders in coal producing states have not planned for a future without coal. Instead of recognizing that the coal industry is facing inexorable decline, politicians in coal states like West Virginia and Kentucky mislead residents of their state into thinking that the situation could turn around if certain Environmental Protection Agency regulations are repealed.

There is a bit of hope, though. Rep. David McKinley (R-WV) and Rep. Peter Welch (D-VT) have introduced a bill in Congress to help out-of-work coal miners find employment in other industries.

The bill calls for the formation of a federal program similar to the Trade Adjustment Assistance, which provides job training, income support, and subsidies for U.S. workers affected by foreign trade. Coal miners who lose their jobs as a result of the industry downturn would be eligible for federal assistance.

The U.S. Department of Labor has already provided a bit of relief for struggling coal communities. For example, in June 2014, the agency announced a $7.5 million grant to workers in eastern Kentucky who were laid off when mines were closed. The money is important, but is a drop in the bucket for what is needed.

The bill proposed by McKinley and Welch would provide a year’s worth of benefits, including training and support for relocation. “Across West Virginia communities are being decimated by what’s happening to the coal industry,” McKinley said in a statement. “Coal miners and other workers are being hurt by factors beyond their control, whether it’s regulations or market forces. It’s only fair we do something to help these struggling families. This legislation represents a bipartisan effort to move beyond our differences and offer help to the proud men and women of the coal industry who are out of work.”

For a state that will experience a sustained period of economic hardship from an increasing rate of coal mine closures, it is welcome news that one of West Virginia’s elected officials is making a push to help displaced workers.

The legislation also offers a potential blueprint for a broader effort aimed at accelerating a long-term transition to cleaner energy. Much of the resistance in Congress to legislation calling for a reduction in greenhouse gas emissions comes from politicians in states that produce fossil fuels.

Bernanke may have tried to save $300 a month in failed refi

Interesting enough, Bernanke cannot use his speaking fees as income as the loan officer stated in the article. Because his speaking fees would be self-employment income or producing a 1099, he doesn’t have 2 years worth of speaking fees or freelance income to use for a loan.

According to Bloomberg News, former Federal Reserve chairman Ben Bernanke this week told a conference of economists in Chicago that he had trouble refinancing his mortgage. “I’m not making that up,” he is reported to have told Mark Zandi of Moody’s Analytics.

Bernanke’s financial disclosure form in 2011 lists one 30-year fixed 4.25% mortgage with George Mason Mortgage as his only liability, worth $671,200 for a Capitol Hill townhome. That works out to a payment of about $3,300 a month. Given that the current fixed rate for a 30 year mortgage at 4.19%, according to Freddie Mac, it makes likely that he may have been looking to adjust into a shorter-term mortgage, like a 10/1 jumbo ARM, which would save him about $300 a month, according to Bankrate.com.

So why is it so tough for perhaps for the man who was once the nation’s most powerful financial guru to get a refinance?

It could just come down to income.

While Bernanke had a verifiable salary of $199,700 while as Fed chairman in 2013, his new income might be much more difficult to qualify, even if it is much higher. Even with a reported $1 million book deal and a speaking appearance fee of $250,000, it’s the actual income on the books currently that is what counts. And the salary of a fellow at the Brookings Institute, where Bernanke actually is employed, is quite modest, just $35,000 to $50,000 a year, according to one well-placed source.

“A bank would see his speaking fee as that of a regular guy who gets a commission or a bonus that would have to be averaged over the past two years,” said Darren Ferlisi, a mortgage loan officer with Integrity Home Mortgage in Frederick, Maryland. “Unless it’s in the books with a minimum number of engagements, that number can’t be used,” Ferlisi said. In addition, Bernanke only left the Fed job at the end of January after an eight-year stint, so he doesn’t have two years-worth of freelance income to show to a bank, Ferlisi said.

S&P Said to Be Probed by N.Y. Attorney General on CMBS

It’s about time someone is investigating CMBS (Commercial Mortgage-Backed Securities)…

New York Attorney General Eric Schneiderman is investigating Standard & Poor’s to determine whether it failed to follow its own methodology in rating commercial-mortgage bonds in order to win business from banks, according to two people with knowledge of the matter.

The unit of McGraw Hill Financial Inc. (MHFI) is facing scrutiny on six such deals it graded in 2011, said the people, who asked not to be identified because the probe hasn’t been made public. Ed Sweeney, a spokesman for S&P in New York, declined to comment, as did Matt Mittenthal, a spokesman for Schneiderman.

New York’s Attorney General’s office is at least the third government agency investigating S&P’s business of grading commercial mortgage-backed securities, where banks pool together loans on properties such as shopping malls, hotels and skyscrapers to create securities that are sold to investors.

Read on.

Secret Service SNAFU Deja Vu: Fake Congressman Gets Backstage At Obama Dinner

What in the hell is going on here with the Secret Service???

As Bloomberg reports,

An unidentified man posing as a member of Congress made it into a secure area backstage at President Barack Obama’s appearance at a Congressional Black Caucus Foundation awards dinner in Washington Sept. 27, according to a White House official.

The man entered the backstage area during or just after Obama’s speech at the Walter E. Washington Convention Center as members of Congress gathered there to have their pictures taken with the president, said the official, who asked for anonymity to discuss the incident, which has not previously been made public.

The unidentified man said he was Representative Donald Payne Jr., a Democrat from New Jersey, the official said. One member of the White House staff determined that the man wasn’t Payne, and another asked him to leave, the official said. He did so without incident and wasn’t detained.

“This guy went through security, fully screened,” he said.

Neither the White House official, nor another administration official aware of the incident, could say how close the man got to the president or First Lady Michelle Obama, who was also in the vicinity. Payne’s chief of staff, LaVerne Alexander, said yesterday that she had not been informed of the incident.

Connecticut attorney general probing JPMorgan breach: source

Connecticut Attorney General George Jepsen is investigating the massive data breach at JPMorgan Chase & Co, according to a person familiar with the matter.

The office has been in contact with JPMorgan Chase about the incident since it first surfaced in August, the person said.

Read on.

MERS hot streak continues

For the second day in a row, MERSCORP is celebrating a legal victory in a case brought by disgruntled mortgagors who claim that MERS doesn’t have the authority to assign a mortgage.

On Thursday, the company announced a series of victoriesin Rhode Island, including a ruling by the Supreme Court of Rhode Island. In that case, the Supreme Court dismissed a series of appeals, in which borrowers had challenged MERS’ authority to hold or assign mortgage interests and promissory notes under Rhode Island state law.

And Friday, the company announced that it had secured another favorable verdict, this time in Texas.

According to a release from MERS, the U.S. Court of Appeals for the Fifth Circuit affirmed a District Court judgment on the pleadings, dismissing the borrower-plaintiffs’ complaint in Van Duzer v. U.S. Bank, N.A., MERSCORP Holdings, MERS, et al.

Read on.

“Real Housewives” stars get prison time for mortgage fraud

Teresa and Joe Giudice, stars of the Bravo series “Real Housewives of New Jersey” have been sentenced to federal prison for a bankruptcy and mortgage fraud scheme.

Teresa Giudice was sentenced on Thursday to 15 months in prison for her part in the scheme. When she is released from prison, Giudice will be subject to two years of supervised probation.

Earlier Thursday, Joe Giudice received a sentence of 41 months, with an additional 12-month sentence to be served concurrently.

In March, the couple pleaded guilty to charges alleging that they falsified loan applications to fraudulently obtain $5 million in mortgages and construction loans over an eight-year period.

U.S. District Court Judge Esther Salas ruled that Teresa Giudice serve her sentence before Joe, so that one parent would be home with the couple’s four children during the duration of their parents’ time in prison.

Teresa was ordered to surrender Jan. 5, so she could spend the holidays with her family before reporting to prison.

According to a report from NorthJersey.com, the couple left the courthouse hand-in-hand after Teresa’s sentence was handed down late Thursday.

From the NorthJersey.com report:

Outside the courthouse, Paul Fishman, the U.S. Attorney for New Jersey, said the sentencing was “fair, appropriate and reasonable and our office is satisfied.” The sentencing, he said, “sends a message to everyone watching and hopefully people will think twice.”

Additionally, the couple must pay $414,588 in restitution for their crimes.

According to other media reports, it is thought that Joe Giudice, who came to the U.S. from Italy as an infant and is still an Italian citizen, could be deported to Italy at the conclusion of his sentence.

Giudice’s attorney previously claimed that Joe did not know he wasn’t an American citizen.

Source: NorthJersey.com

Family Fears Eviction After Four Year Foreclosure Battle With Bank of America

Mike and Jamie Vos always dreamed of buying a home where they would put down roots and raise their children. In 2008, they found a house that seemed perfect — a two-story house on a quiet street in Buckley, Washington. For the first time their daughter, Autumn, then 5, and their son Cameron, then 11, would have their own bedrooms.

The Vos bought the house and regularly made their mortgage payments. But in early 2009 while the national economy was entering the worst downturn since the Great Depression, the family saw financial trouble looming and decided seek a loan modification in order to lower their monthly payments. They were turned down.

The Vos said that’s when they sought advice from Bank of America, the bank that was servicing their loan.

Mike Vos said that he remembers the conversation well: “They (Bank of America) said, We can’t tell you to do this, we’re just giving you information on it. If you don’t make a payment for three months, it will show that you are in distress and you’ll be put at the top of the order to be able to be helped.”

After hearing that advice, the Vos said they stopped making payments, and applied again for a loan modification. They said the process was overwhelming and confusing.

“It was this endless battle, it just seemed like, no matter what we couldn’t win”, Jamie Vos said. “We would send things in 30 times and when they finally did say they got it they would wait so long after that they would say the paperwork had expired and we needed to do it again.”

Jamie Vos said she would be on the phone with the bank for hours, but the next time she called there would be no record of the previous conversation.

On June 3, 2010, Bank of America denied their loan modification and the next day foreclosed and took possession of the Vos home.

The Vos said they pleaded with Bank of America to undo the foreclosure, noting that Mike’s income had improved and they could make their payments. A month later, they received word in an e-mail from Bank of America that the foreclosure sale had been rescinded. But later the bank said the sale was not rescinded and the foreclosure would stand.

Read on.

Foreclosure-Relief Fund Still Has $520 Million Unspent

WASHINGTON—U.S. bank regulators have yet to figure out what to do with about $520 million in unspent money placed in a fund to reimburse consumers for foreclosure-related abuses, a federal watchdog said in a report Thursday.

The findings by the Federal Reserve’s inspector general are the latest outgrowth of regulators’ 2011 decision to order an independent review of banks’ foreclosure practices, in which many bank staffers were processing foreclosure cases without personally verifying their contents. A review by bank regulators later found banks also improperly denied loan assistance to homeowners, made errors in loan-assistance plans and charged improper fees.

Read on.

Citigroup Hopes to Finally Close Chapter on Subprime-Lending Venture

Citigroup Inc. C +0.29% ‘s plans to get rid of its U.S. subprime-lending unit, OneMain Financial, will close one of the most complicated and volatile chapters in the bank’s history.

The business of charging high interest rates to low-income customers, who often couldn’t get loans elsewhere, was once hailed as a core part of the financial supermarket assembled by former Chief Executive Sanford Weill. But during the financial crisis, it became a money-losing albatross.

The current holder of Mr. Weill’s old job, Michael Corbat, calls OneMain “a terrific business.” But it doesn’t fit “the Citi model,” he says. These days, Citigroup’s consumer business is focused on lending to high-income customers in big cities around the world—a far cry from the U.S. strip malls and blue-collar neighborhoods that host OneMain’s branches.

The split-off of OneMain—through an initial public offering, a sale, or a combination of the two—has ramifications for the industry and the bank. For borrowers, it could be a sign that subprime loans are again becoming a niche product dominated by less-regulated nonbanks. For Citigroup, the yearslong process—its plans to get rid of OneMain date to at least 2009—underscores the challenge it faces as it attempts to slim down and find steadier, less-risky sources of revenue.

Read on.