Daily Archives: February 16, 2015

HSBC Bank: Secret Origins To Laundering The World’s Drug Money


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Tax-change renewal could hurt troubled homeowners in North Carolina


RALEIGH North Carolina lawmakers are poised to renew a rule requiring homeowners to pay state income taxes on mortgage debt forgiven by lenders – a move that could cost some homeowners thousands of dollars in additional taxes.

For years, North Carolina allowed taxpayers not to count written-off mortgage debt as taxable income after Congress, responding to the mortgage crisis, enacted a similar exclusion on federal income taxes.

Rulings could breathe new life into dead foreclosure cases

It took seven years for Florida’s court systems to erase a backlog of nearly half a million home defaults left over from the Great Recession.

But just as that logjam is clearing, a pair of recent appellate court rulings could bring thousands of seemingly dead foreclosure cases back to life, all at a time when court systems are losing state funding to process them.

If upheld, the decisions could resurrect dismissed foreclosures dating back nearly a decade, potentially swamping court systems with yet another pool of default filings.

Read on.

Obama’s Foreclosure Relief Program Was Designed to Help Bankers, Not Homeowners

As long as there are securitization of mortgages or RMBS, the banks will benefit and not homeowners since the banks don’t keep the homeowners’ note for 30 years and is sold on Wall Street. Let’s not forget that additionally the investors are the ones that hold the bag while the mortgage servicers benefit from the foreclosure.

After her stroke, Alice Emile of Freeport, New York, wanted to die at home. On April 24, 2009, she passed away quietly at the age of 74. Her son Darrell Emile, executor of the estate, had to close the reverse mortgage she took out in 2006, which had passed into the hands of Bank of America.

A Bank of America representative told Emile he would receive a payoff document within six months, and have six additional months to determine the best way to settle the account. This is considered standard for reverse mortgage closings. But in October 2009, a bank representative claimed that they had never received word that Emile’s mother had died (even though, by this time, the bank was addressing letters about the house to “the Estate of Alice Emile”). After Emile faxed Bank of America the death certificate, for what he says was the third time, the bank informed him that the account was in default.

Emile had the money to settle the mortgage, and would have had he simply received a payoff document. But Bank of America never delivered one, and they refused his offers to pay afterward, instead filing for foreclosure in May 2010. Since Emile cannot get a payoff document, he cannot sell the home, which is stuck in limbo awaiting completion of foreclosure. The estate did, however, benefit in April 2013 from the Independent Foreclosure Review, a Federal Reserve–led settlement designed to compensate homeowners for foreclosure errors. The check was for $300.

Read more from Bill Moyers. Click here.

Morgan Stanley : Greek banks to run out of collateral in 14 weeks -JP Morgan

Greek banks are losing around 2 billion euros of deposits a week, a pace of outflows which, if maintained, will see them run out of collateral for new loans in 14 weeks, according to JP Morgan.

This is based on its calculation that of a maximum 108 billion euros of financing available from the European Central Bank and Greek central bank, Greek banks have already used up 80 billion euros, leaving them with 28 billion euros if needed.

This estimate of Greek banks’ access to funding comes amid confusion about how long they can continue to function while the standoff between Athens and its international creditors over Greece’s bailout programme persists.

Debt-laden Greece and its euro zone creditors are having crunch talks in Brussels this week on the future of the bailout, which Athens wants renegotiated.

Read on.

France ends investigation of HSBC’s Swiss bank, eyes first trial

A French investigation into HSBC’s Swiss private bank over a suspected tax-dodging scheme for wealthy customers has ended, bringing it a step closer to a possible trial, a judicial source said on Monday.

HSBC last week admitted failings in compliance and controls in the Swiss unit and faces investigation by U.S. authorities and an inquiry by British lawmakers after reports that it helped customers conceal millions of dollars of assets in a period up to 2007.

French magistrates put HSBC Private Bank under formal investigation in November. They ended their inquiries on Feb. 12, the source said, adding that prosecutors had three months to request that the bank be sent to trial to answer charges.

The alleged fraud involves some 3,000 French taxpayers. Cases against specific clients of the Swiss bank are already in progress with 62 cases in the works, according to the daily Le Monde.

Read on.

UK financial watchdog investigates HSBC over tax claims

Britain’s financial watchdog said it was investigating HSBC following reports it helped clients evade taxes but said it was focusing on the bank’s current behaviour rather than alleged past abuses.

In its first statement on the matter, the Financial Conduct Authority (FCA) said it wanted to verify that the “failings” the bank admitted to were in the past.

“The FCA is working closely with the firm and other agencies which have an interest in this matter to ensure that any questions this may raise in relation to any current practices and culture of HSBC are addressed,” it said.

Gary Greenwood, analyst at Shore Capital Stockbrokers, said the focus on current behaviour was positive for HSBC if, as the bank said, it had cleaned up the problems at its Swiss private bank.

But Nick Smith, who sits on parliament’s Public Accounts Committee which last week criticised the UK tax authority for failing to take action against HSBC, said he was disappointed the FCA had settled for a narrow focus.

Read on.

The government really doesn’t want to talk about Fannie, Freddie profits

The Treasury Department really doesn’t want to talk about what it did with the Third Amendment sweep of GSE shareholder rights.

Gretchen Morgensen at the New York Times does, however.

Watching these profits pour into the Treasury, shareholders cried foul. Contending the sweep was unjust, one of those with large stakes in both Fannie and Freddie securities — the Fairholme Fund — sued the government in July 2013. From the outset, the government demanded extreme secrecy in the case. Lawyers at the Justice Department secured confidential treatment of almost all the 150,000 pages of documents submitted by the Treasury and F.H.F.A. by late January. Even the plaintiff bringing the case is barred from viewing these documents; only its lawyers can see them.

The government has also fought every discovery request made by the Fannie and Freddie shareholder. Officials at the Treasury and F.H.F.A. claim that disclosure of documents relating to their actions would destabilize the economy and financial markets and raise mortgage rates.

Really? The documents the judge has ordered the government to produce were created three to seven years ago. How could they unsettle the markets now?

Even more intriguing, though, is the Justice Department’s broad assertions that 669 of the documents it must produce are subject to various privileges and not to be disclosed. The government even claimed that privileges applied to documents it had not yet reviewed, court records show.

According to previously undisclosed logs filed as part of the case, most of the documents are said to be covered by attorney-client privilege or deliberative process privilege, which protects intragovernment communications before a final decision is made in a matter.

But the government has invoked presidential privilege on 45 documents created either by officials at the Treasury or the F.H.F.A., the regulator charged with conserving Fannie and Freddie’s assets and stabilizing the institutions “with the objective of returning the entities to normal business operations,” as its website states.

Read her full piece here.