Daily Archives: February 12, 2015

Navy veteran fighting to change HOA foreclosure

SAN ANTONIO – A state representative from San Antonio has filed a bill to limit the amount of attorneys fees that can be collected once a person’s home falls into foreclosure. The filing comes after a story aired by News 4 San Antonio profiling U.S. Navy veteran Richard Miller. While Miller was on duty overseas, he kept current on his mortgage, but fell behind on his HOA dues. After returning, he learned his homeowners’ association was taking action to foreclose on his home. It was a process that would prove costly as Miller was not able to afford the $15,000 in attorneys’ fees claimed by the HOA’s lawyers. Miller eventually lost his home.  But he is now fighting to change state laws.

Read More at: http://www.news4sanantonio.com/news/features/top-stories/stories/navy-veteran-fighting-change-hoa-foreclosure-laws-20492.shtml

What Is Citigroup Hiding From Its Shareholders Now?

Truthout:

In the early and mid-2000s, Citigroup had compensation practices that can fairly be described as a disaster for shareholders (and for the broader economy). Top executives, such as then-CEO Chuck Prince, received big bonuses and generous stock options. Lower level managers and traders were paid along similar lines. These incentives encouraged Citi employees to take risks and boost profits. Unfortunately for shareholders, the profits proved largely illusory – when the dangers around housing and derivatives materialized fully, the consequences almost destroyed the firm.

The market value of Citigroup’s stock dropped from $277 billion in late 2006 to under $6 billion in early 2009. The shareholders could easily have been wiped out – they were saved from oblivion by a generous series of bailouts provided by the federal government (see Figure 7 in the final report of the Congressional Oversight Panel; direct TARP assistance was $50 billion but “total federal exposure” was close to $500 billion). In the next credit cycle, the experience for Citi shareholders could be even worse. So it is entirely reasonable for shareholders to look carefully at, among other things, the details of how executives and other key employees are paid – and to understand the current incentives for taking and managing risk.

But Citigroup is resisting efforts to disclose fully the structure of relevant compensation contracts. What is Citigroup hiding now?

The specific issue is a request by Richard Trumka, president of the AFL-CIO, for Citigroup to disclose precisely how employee compensation is affected when a person takes a government position. (See David Dayen’s article in the New Republic for more detail and context, including requests for similar information from other large banks. I use Mr. Dayen’s very helpful links to documents below.)

Banker Literally Applauds Elizabeth Warren At Senate Hearing

WASHINGTON — Bank regulators and executives typically hope to escape a Senate Banking Committee hearing without becoming the subject of a viral video showing them humiliated at the hands of Sen. Elizabeth Warren (D-Mass.).

On Thursday, however, one witness was pleased enough with Warren’s line of questioning that he actually applauded the Massachusetts Democrat toward the end of her remarks — a highly unusual departure from custom.

The applause comes roughly five and a half minutes into the video above. While the applauder can’t be seen, it was John H. Buhrmaster, president and CEO of the 1st National Bank of Scotia and Chairman of the Independent Community Bankers of America. The ICBA is the lobby shop for community banks.

Warren’s question to Buhrmaster called out Wall Street for an old tactic: the practice of claiming that a lobbying group is not attempting to help huge New York-based banks with global reach, but rather merely looking to give a boost to the beleaguered local banker, today’s Jimmy Stewart from “It’s A Wonderful Life.”

In reality, Warren’s comments suggested, the request is generally being made for the benefit of Mr. Potter.

Read on.

 

CFPB takes action against three mortgage companies for false advertising

The Consumer Financial Protection Bureau is taking action against All Financial Services, Flagship Financial Group and American Preferred Lending for misleading consumers with advertisements implying U.S. government approval of their products.

“Each of these companies has misled consumers with false advertising,” said CFPB Director Richard Cordray. “The U.S. government is very serious about stopping companies from falsely claiming federal authority, and we are particularly concerned about false or deceptive statements made in advertisements about reverse mortgages that target older Americans.”

Under the 2011 Mortgage Acts and Practices Advertising Rule, misleading claims in mortgage advertising, including implying a government affiliation are prohibited.

Read on.

Former P&G chief and now VA secretary to congressman: ‘I ran a large company, sir, what have you done?’

Wow! I don’t keep up with the political theatre on Capitol Hill, but this man holds his own in front of Congress..

Bob McDonald, former CEO of Procter & Gamble and now secretary of the troubledU.S. Department of Veterans Affairs, returned fire today after taking flak from a member of Congress.

McDonald, an Indian Hill resident who is a former Army Ranger, noted his executive experience at Cincinnati-based P&G during a heated budget hearing in Washington.

Rep. Mike Coffman, a Colorado Republican, accused McDonald of “glossing over the extraordinary problems confronted by your department.”

McDonald remained calm as he replied, “I’ve run a large company sir, what have you done?”

Coffman, an Army veteran, previously ran a property management firm in Aurora, Colo., that had more than 20 employees. P&G has 118,000 employees worldwide.

Coffman cited the VA hospital in Denver as an example of the problems facing McDonald’s department. A construction project there is years behind schedule and hundreds of millions of dollars over budget, the congressman said.

“This is a department mired in bureaucratic incompetence and corruption,” Coffman said. “I think the public relations is great today, but there’s no substance. There is no substance.”

McDonald interjected, “I’m highly offended by your comments, Mr. Coffman.”

But the congressman continued to disparage McDonald.

“I fundamentally believe that, as unfortunate as it is, at the end of the day, at the end of this president’s term, that you will not have made a difference in changing the culture of this organization by virtue of your glossing over its problems,” he said.

McDonald, a Republican, was nominated by President Barack Obama, a Democrat.

“I’ve been here six months,” McDonald said to the congressman. “You’ve been here longer than I have. If there’s a problem in Denver, I think you own it more than I do.

Ouch!

Read on.

A Single Republican Voted Against Keystone

 Rep. Justin Amash!

From Congressman Amash’s Facebook:

And the bill will only create 35 permanent jobs. From Ecowatch:

Pipeline backers mislead the public with inflated job numbers. The truth is, according to the State Department, the pipeline will create 35 permanents jobs and 1,950 construction jobs for two years.

And one corporation that stands to benefit from the Keystone bill and its amendments is Koch Industries. And by the way, the month of January saw five major pipeline leaks.

JPMorgan Chase : Mayor Mike Duggan wants to create mortgage-like fund for homebuyers

Feb. 11–Mayor Mike Duggan said Wednesday that he is working with major investors to create a home-lending program to make it easier forDetroit homeowners to get mortgage-type loans to buy houses.

Such a loan fund could help solve one of Detroit’s major challenges: finding credit for home buyers in an environment when appraised values are too low to support a traditional market-rate mortgage. Thousands of potential home buyers are believed to be in that tough situation, with the value of the house they wish to buy too low to obtain a traditional bank loan.

“Last year in Detroit, 3,500 single-family houses sold and 90% of them were for cash, and it’s entirely because of the appraisals,” Duggan said. “It’s got nothing to do with ability to pay.”

Asked how soon it might happen, Duggan said as soon as the first investor signs up to bankroll the fund.

Such a fund would be different from the home rehab financing program Duggan outlined Tuesday evening in his State of the City address. Both Duggan and his spokesman John Roach said Wednesday it was too early to talk in more detail about the potential new fund to make mortgage-like loans.

Read on.