Daily Archives: February 4, 2015

Judge denies dismissal of ResCap mortgage lawsuit

A New York bankruptcy judge on Tuesday did not dismiss four lawsuits brought by the Residential Capitalbankruptcy trust, alleging mortgage originators including UBS Real Estate Securities and SunTrust Mortgage sold billions of dollars in defective loans. PerLaw360:

The mortgage lenders were accused of selling residential mortgage loans with faulty underwriting that ResCap then packaged and resold, the article said.

“Substitution of the trust as the real party in interest to pursue these adversary proceedings is appropriate,” Judge Glenn wrote in the published opinion. “First, even if RFC lacked standing to file the original complaints against SunTrust and UBS, such defective standing would constitute an honest mistake, since there is no indication that RFC or the plaintiff acted in bad faith.”

The article noted that the judge did dismiss breach of contract claims for loans purchased by RFC before May 2006, ruling they were untimely.

Source: Law360

Propublica’s $700 Billion Bailout List: Banks, Auto Companies, and More

It’s a real eye opener… Hat tip to Propublica for keeping track of the $700 billion bailout money!

Last update: Jan. 23, 2015

We’re tracking where taxpayer money has gone in the ongoing bailout of the financial system. Our database accounts for both the broader $700 billion bill and the separate bailout of Fannie Mae and Freddie Mac.

For each entity, we provide a “Net Outstanding” amount, which shows how deep taxpayers are in the hole after accounting for any revenue the government has received (usually through interest or dividends).

Companies that failed to repay the government and resulted in a loss are shaded red. You can see a list of those investments here. All other investments either returned a profit to the government or might still be repaid. Recipients of aid through TARP’s housing programs (such as mortgage servicers and state housing orgs) received subsidies that were never intended to be repaid, so we don’t mark those as losses..

Note: Subsidies are listed separately from the investment programs. So, for instance, Bank of America is listed twice – both as a mortgage servicer and as a bank.

Want just the numbers all in one place? See the detailed view here.

Name Type State Total Disbursed Profit /
Net Outstanding
Fannie Mae Government-Sponsored Enterprise D.C. $116,149,000,000 $18,286,000,000
Freddie Mac Government-Sponsored Enterprise Va. $71,336,000,000 $19,633,000,000
AIG
Received other federal aid. Click to see details.
Insurance Company N.Y. $67,835,000,000 $5,025,967,492
General Motors Auto Company Mich. $50,744,648,329 -$11,410,472,582
Bank of America
Received other federal aid. Click to see details.
Bank N.C. $45,000,000,000 $4,566,857,694
Citigroup
Received other federal aid. Click to see details.
Bank N.Y. $45,000,000,000 $13,448,572,616
JPMorgan Chase Bank N.Y. $25,000,000,000 $1,731,202,357
Wells Fargo Bank Calif. $25,000,000,000 $2,281,347,113
GMAC (now Ally Financial) Financial Services Company Mich. $16,290,000,000 $3,057,502,589
Chrysler Auto Company Mich. $10,748,284,222 -$1,315,061,737
Goldman Sachs Bank N.Y. $10,000,000,000 $1,418,055,555
Morgan Stanley Bank N.Y. $10,000,000,000 $1,268,055,555
PNC Financial Services Bank Pa. $7,579,200,000 $741,344,650
U.S. Bancorp Bank Minn. $6,599,000,000 $334,220,416
SunTrust Bank Ga. $4,850,000,000 $527,323,605
Capital One Financial Corp. Bank Va. $3,555,199,000 $251,674,702
Regions Financial Corp. Bank Ala. $3,500,000,000 $638,055,555
Wellington Management Legacy Securities PPIF Master Fund, LP Investment Fund Del. $3,448,461,000 $702,530,334
Fifth Third Bancorp Bank Ohio $3,408,000,000 $593,372,603
Hartford Financial Services Insurance Company Conn. $3,400,000,000 $814,403,447
American Express Financial Services Company N.Y. $3,388,890,000 $414,367,308
AG GECC PPIF Master Fund, L.P. Investment Fund Del. $3,352,197,510 $925,947,685
AllianceBernstein Legacy Securities Master Fund, L.P. Investment Fund Del. $3,192,141,738 $562,685,420
BB&T Bank N.C. $3,133,640,000 $159,713,918
Bank of New York Mellon Bank N.Y. $3,000,000,000 $231,416,666
KeyCorp Bank Ohio $2,500,000,000 $367,222,222
CIT Group Bank N.Y. $2,330,000,000 -$2,286,312,500
Comerica Incorporated Bank Texas $2,250,000,000 $322,039,543
State Street Bank Mass. $2,000,000,000 $123,611,111
JPMorgan Chase subsidiaries Mortgage Servicer N.J. $1,882,360,584 -$1,882,360,584
RLJ Western Asset Public/Private Master Fund, L.P. Investment Fund Del. $1,861,578,258 $471,343,040

On a side note: General Motors, Chrysler, CIT Group failed to repay the government.More from Propublica. Click here.

ICAP Fined $17 Million by EU for Aiding Yen Libor Cartels

(Bloomberg) — ICAP Plc, the world’s largest broker of transactions between banks, was fined 15 million euros ($17.2 million) by the European Union’s antitrust arm for helping traders to manipulate benchmark interest rates tied to the Japanese yen.

ICAP spread misleading information to lenders on a panel that set the interbank lending rate for yen Libor and aided contacts between traders, the European Commission said in an e-mailed statement from Brussels today.

The information was “veiled as predictions or expectations” of where the yen Libor rates would be set, the commission said. It “was aimed at influencing certain panel banks that did not participate in these infringements” to submit rates “in line with the adjusted predictions or expectations.”

Read on.

NY AG warning New Yorkers about debt collection scam, letters might look like they came from the NY Attorney General’s Office.

ALBANY, N.Y.  — The dire “final warning” letters might look like they came from the New York Attorney General’s Office.

With the office seal, a case number and threat of legal action to collect debts, the notices would arrive out of the blue.

That’s because they’re coming from scammers trying to intimidate people into paying off fake debts or call a phone number that rings somewhere outside the U.S. and is answered by someone who may threaten arrest or job loss to force a payment.

Attorney General Eric Schneiderman said Wednesday the bogus letters surfaced recently and feature a scheme similar to scam involving a caller posing as an attorney from his office, which said it has received dozens of complaints in recent weeks.

He said legitimate government agencies don’t issue such threats and consumers should be wary of any suspicious mailing or call.

Read on.

This Republican Senator Is Fighting For Your Freedom Not To Wash Your Hands In The Bathroom

hahamouse

lol! The dumbing down of the legislative branch!

While many GOP lawmakers were busy deciding whether they think parents should vaccinate their children in the midst of a freak measles outbreak, freshman Sen. Thom Tillis (R-N.C.) has concerned himself with another case of freedom-inhibiting overreach in the liberal war on bacteria: the requirement that food industry workers wash their hands in the bathroom.

“Let an industry or business opt out as long as they indicate through proper disclosure, through advertising, through employment, literature, whatever else,” Tillistold an audience at the Bipartisan Policy Center on Monday. “I don’t have any problem with Starbucks if they choose to opt out of this policy as long as they post a sign that says, ‘We don’t require our employees to wash their hands after they use the restroom.’ The market will take care of that.”

Asked about his comments later by The Huffington Post, Tillis denied saying such a thing.

Read on.

2008 Deja Vu: GMAC Confirms SEC Probe Of Subprime Loans, Will “Investigate Itself”

Zerohedge

While not entirely surprising, the fact that GM Financial has admitted that:

  • *GM FINANCIAL: SEC PROBING SUB-PRIME LOAN SECURITIZATION

Of course, we should not worry about this… we are sure it is “contained” as GM reports it is“investigating matters internally” – just like it did with the ignition switch year ago?

Via GM’s 10K,

In July 2014, we were served with a subpoena by the U.S. Department of Justice directing us to produce certain documents relating to our and our subsidiaries’ and affiliates’ origination and securitization of sub-prime automobile loans since 2007 in connection with an investigation by the U.S. Department of Justice in contemplation of a civil proceeding for potential violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Among other matters, the subpoena requests information relating to the underwriting criteria used to originate these automobile loans and the representations and warranties relating to those underwriting criteria that were made in connection with the securitization of the automobile loans. We were subsequently served with additional investigative subpoenas to produce documents from state attorneys general and other governmental offices relating to our sub-prime auto finance business and securitization of sub-prime auto loans.

In October 2014, we received a document request from the Securities and Exchange Commission in connection with its investigation into certain practices in sub-prime auto loan securitization.  We are investigating these matters internally and believe that we are cooperating with all requests. Such investigations could in the future result in the imposition of damages, fines or civil or criminal claims and/or penalties. No assurance can be given that the ultimate outcome of the investigations or any resulting proceedings would not materially and adversely affect us or any of our subsidiaries and affiliates.

9/11 Conspirator Admits Saudi Royal Family Funded Al-Qaeda Attacks

NEW YORK (Reuters) – A former al Qaeda operative imprisoned for life for his role in the Sept. 11, 2001, attacks has told lawyers for victims of the attacks that members of the Saudi royal family supported the Islamic militant group.

Zacarias Moussaoui made the statements in testimony filed in Manhattan federal court on Tuesday by lawyers for attack victims who accuse Saudi Arabia in a suit of providing material support to al Qaeda.

He said a list of donors from the late 1990s that he drafted during al Qaeda leader Osama bin Laden’s tenure included some “extremely famous” Saudi officials, including Prince Turki al-Faisal Al Saud, a former Saudi intelligence chief.

“Shaykh Osama wanted to keep a record who give money because … who is to be listened to or who contribute to – to the jihad,” said Moussaoui, a 46-year-old French native who pleaded guilty to terrorism charges in 2005.

Moussaoui said he met in Kandahar with an official from Saudi Arabia’s Washington embassy. Moussaoui said they were supposed to go to Washington together to find a location “suitable to launch a stinger attack” on the U.S. presidential plane, Air Force One.

Read on.