Daily Archives: December 18, 2014

18 Senators, mortgage bankers tell HUD: Time to lower FHA premiums

A group of 18 U.S. Senators and the Mortgage Bankers Association both sent letters to the U.S. Department of Housing and Urban Development on Thursday, stating that the time has come for the Federal Housing Administration to lower its mortgage insurance premiums.

In two separate letters both addressed to HUD Secretary Juliàn Castro, the group of senators and the MBA both cited the improved financial health of the Mutual Mortgage Insurance Fund as the main reason why the FHA should reexamine its mortgage insurance fees immediately.

In the FHA’s actuarial report on the MMIF, the agency declared that there had been a $21 billion improvement since late 2012, when the agency implemented a series of financing changes.

Senators Barbar Boxer (D-CA), Robert Menendez (D-NJ), Charles E. Schumer (D-NY), Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Barbara Mikulski (D-MD), Dianne Feinstein (D-CA), Patty Murray (D-WA), Richard Durbin (D-IL), Ben Cardin (D-MD), Bernie Sanders (I-VT), Jeanne Shaheen (D-NH), Kirsten Gillibrand (D-NY), Richard Blumenthal (D-CT), Chris Murphy (D-CT), Mazie Hirono (D-HI), Edward Markey (D-MA) and Cory Booker (D-NJ) asked Castro to ensure that the fees on FHA loans are “priced appropriately” to both cover expected losses and serve the agency’s stated mission of helping Americans achieve homeownership.

Read on.

Regulators Delay Key Volcker Implementation Date Until 2017

WASHINGTON — Federal regulators announced Thursday that they are delaying implementation of certain aspects of the Volcker Rule’s prohibition on bank ownership of private equity and hedge funds, giving institutions an additional two years to comply.

Under the rule — named after former Fed Reserve Board Chairman Paul Volcker, who proposed it — banks are forbidden from proprietary trading and investing in certain private equity or hedge funds. While regulators left the proprietary trading implementation date alone, they extended for one year, until July 21, 2016, the effective date governing investment in so-called “legacy covered funds.” The agencies further signaled their intent to delay the effective date of that part of the rule again until July 21, 2017. The delay only covers funds already owned by banks prior to Dec. 31, 2013.

Investments in funds made this year would still be subject to the 2015 compliance date.

Read on.

U.S. Slides Again As Denmark Tops Forbes’ Best Countries For Business

The U.S. is the world’s undisputed economic superpower with a GDP of $16.7 trillion last year, nearly a quarter of the global total. It is the financial capital of the world and has largely recovered from the Great Recession. The economy recently posted its best six-month performance in more than a decade and unemployment stands at 5.9%, down from its 2009 peak of 10%.

Yet for all of its financial might, the U.S. lags behind many other developed nations when it comes to its business climate, and the gap is growing. The U.S. ranks 18th in Forbes’ ninth annual ranking of the Best Countries for Business, down four spots from last year. It marks the fifth straight year of declines since 2009, when the U.S. ranked second.

Blame an expanded government, as well as expensive new regulations in finance and health care. The U.S. is the only country to record a loss of economic freedom seven straight years in the Heritage Foundation’s Index of Economic Freedom. More than 130 major new federal regulations on starting a business have been added since 2009 at an annual cost of $60 billion, according to the Heritage Foundation. The U.S. ranks 81st out of 146 countries for monetary freedom, according to Heritage, with only the U.K. and Turkey faring worse among OECD nations.

The U.S. also gets knocked for its corporate tax climate, which ranks 43rd (out of 146 we ranked countries) in the World Bank’s Doing Business report. The statutory corporate rates in the U.S. are the highest in the world among developed countries and the complexity of the code keeps an army of accountants busy. Companies get a break on their taxes thanks to numerous deductions, but the reality of having the highest published rates in the world makes for bad PR.

Read on.

18 United States

United States

1.6 52,800 -2.2 318.9

Elizabeth Warren allies march outside Citi: ‘Break big banks’

A group of protesters gathered outside Citi’s headquarters in New York chanting “break big banks.”

Made up largely of Senator Elizabeth Warren’s supporters, the protesters on Thursday specifically targeted Citigroup (C) because of the bank’s role in watering down Wall Street regulation.

“We need to break up the big banks that have too much power in our democracy,” said Tim Hernandez-Tarafas, one of the protest organizers. “They literally wrote the law and Washington let them do it.”

Read on.

Ex-American Realty Capital Chair Schorsch accused of telling managers to manipulate financials

Defamation lawsuit against ARCP, Schorsch, Kay seeks $50 million

Former American Realty Capital Properties Inc. Chairman Nicholas Schorsch in July directed two executives to manipulate quarterly financial results, according to a complaint filed Thursday in New York state court by former Chief Accounting Officer Lisa McAlister.

The complaint, part of a defamation suit against the real-estate investment trust, Schorsch and former Chief Executive David Kay, centers on the alleged role played by Schorsch in an accounting scandal that so far has erased $3.5 billion from American Realty Capital Properties’ ARCP, -4.07%  market value.

Ms. McAlister alleges in the complaint that during the first quarter she informed Schorsch and Kay, then the company’s president, of questionable accounting practices but was ignored.

Read on.

Plum Creek CEO returns $1.86 million bonus

Plum Creek Timber‘s CEO Rick Holley received a $1.86 million bonus in the form of 44,445 restricted company stocks on Feb. 3 2014.

On Dec. 12, Holley gave back his awarded bonus because company shareholders had not seen a return in their investments during his tenure as CEO, according to a Securities and Exchange Commission 8-K filing.

Read on.

Senator Elizabeth Warren: We lost this time

Message from Senator Warren via email:

Elizabeth Warren for Massachusetts

Washington is rigged for those who can hire armies of lawyers and lobbyists. Last week, we got a close look at what really goes on.

House Republicans slipped a provision into the must-pass, omnibus budget package in a secret, closed-door deal. Citigroup lobbyists literally wrote the provision to weaken the new rules on Wall Street and make it easier for the biggest banks to get bailed out again in the future. JP Morgan CEO Jamie Dimon personally called up members of Congress to lobby for their votes.

Nobody likes bailouts. Democrats don’t like bailouts. Republicans don’t like bailouts. But Wall Street proved again that with enough money and enough power, they can tilt the playing field in Washington a little more in their favor.

I fought my heart out against that provision last week. So did tens of thousands of people who signed petitions, who called their representatives, who tweeted and Facebooked, and who spoke out about it.

We lost this time. But here’s what I want you to remember: It’s better to fight and lose than not to fight at all.  

It’s better to fight because if you don’t fight, you can’t win. Besides, even when you don’t win, you can change the game. Here’s a snippet from an article in The Hill newspaper earlier this week that shows what I mean:

“One senior financial industry executive said the dust-up over the funding bill has forced the industry to recalibrate its lobbying priorities for the coming year. Given Warren’s megaphone, the executive said, getting through the next Congress without new restrictions on large banks would constitute a win.”

Sure, that’s just one person’s opinion. There are a lot of other people who work for big banks on Wall Street and in Washington who are salivating right now, making perfectly clear they view this as the beginning of a larger assault on financial reform. But without our fight, they would be looking at a much easier path to more bank handouts.

We know that our job is going to get tougher in 2015. Mitch McConnell has been saying for months – both out in the public and in secret meetings with the Koch brothers – what his plan will be when Republicans take control of the Senate: use every trick and political game they can think of to undermine President Obama and grind the government’s work to a halt.

That’s why it’s more important than ever to fight back for working families. To fight back for people who couldn’t get health insurance for years and don’t want Republicans to take their new insurance away. To fight back for Social Security and Medicare so seniors can retire with dignity. To fight back for the environment so our grandkids will be able to breathe the air and drink the water. To fight back for accountability and a level playing field so nobody steals your purse on Main Street, or your pension on Wall Street.

That’s why we’re here: To fight the big fights. We won’t always win, but darn it, we’re going to try.

I wanted to take a moment to say thank you. Thank you for your support, for your time, for your voice, and for your fight. We’re a team, you and I. I never forget that.

Thank you for being a part of this,


Wells Fargo Fined $1.5M By FINRA Over Customer ID Lapses

Law360, New York (December 18, 2014, 11:28 AM ET) — The Financial Industry Regulatory Authority on Thursday said it has fined two Wells Fargo & Co. units $1.5 million for failing to verify the identity of 22,000 customer account holders, all due to a software glitch that went undetected for nearly a decade.

Wells Fargo Advisors LLC and Wells Fargo Advisors Financial Network LLC agreed to pay the fine without admitting or denying wrongdoing, FINRA said in an enforcement order. According to the regulator, the two broker-dealer units shared an electronic customer identification program that worked…

Source: Law360

Ocwen accused of stalling short sales, NYDFS and CFPB investigate

It’s time to suspend Ocwen’s business license.. Ocwen still has become the worst repeated offenders of short cutting the rules and regulations for profit…

The New York Department of Financial Services and the Consumer Financial Protection Bureau are investigating Ocwen Financial Group (OCN) over whether it improperly stalled short sales by borrowers who owe more than their homes are worth. PerBloomberg:

According to the article, Ocwen is being is not following a new rule that requires mortgage servicers to approve or deny a short sale within 30 days of an application and is instead delaying such sales to collect more fees.

In short sales, the lender gets the proceeds of the sale and relinquishes the balance of the mortgage. Borrowers get out from under a loan they can’t repay, and housing inventory is freed up. Consultants specializing in the practice in states suffering the most in the mortgage crisis say Ocwen is known for demanding more paperwork before the deadline, forcing the process to restart.

“Ocwen has it all figured out,” Deborah Priebe, a senior vice president at Short Sale Success in Henderson, Nevada, said in an interview. “They are notorious for asking for one more piece of paper on the 29th day.”

On Tuesday, Ocwen was also put under the spotlight by the National Mortgage Settlement, which is saying that it doesn’t trust Ocwen’s own internal reviewers and the documents they provide.

Source: Bloomberg

A cartoon speaks a thousand words

At hearng, Eliz Warren asked Pres if he’s cop on the street. Our take:

former Fed cop1

vs. this cop on the street:

Elizabeth Warren pic