Daily Archives: March 6, 2015

#Fanniegate goes viral on Twitter

The hashtag #Fanniegate is blowing up on Twitter, with a war of words between those who think the government overstepped its bounds with the third amendment sweepand those who think the government was well within its rights.

First a little recap, and a warning: GRAPHIC LANGUAGE.

Michael Stegman, counselor to the secretary for housing finance policy with the Treasury, said at the Goldman Sachs (GS) Housing Finance Conference Thursday morning that the current status quo is unsustainable and taxpayers are still on the hook.

“The critical flaws in the legacy system that allowed private shareholders and senior employees of the GSEs to reap substantial profits while leaving taxpayers to shoulder enormous losses cannot be fixed by a regulator or conservator because they are intrinsic to the GSEs’ congressional charters,” Stegman said.

“And these charters can only be changed by law. That is why we continue to believe that comprehensive housing finance reform is the only effective way forward, not narrowly crafted ad-hoc fixes,” he added.

Read on.

Fed: Banks could lose $490 billion in next crisis

NEW YORK (CNNMoney) —America’s biggest banks would lose $490 billion — most of that due to bad loans — over the next nine quarters in a worst-case scenario devised by the Federal Reserve.

Thankfully, the Fed does not expect that scary scenario to happen. But in an effort to prevent a repeat of the 2008 financial crisis, the Fed is putting the big banks through stress tests.

As jarring as the latest stress test results sound, the Fed said Thursday that banks deserve a lot of credit for boosting their capital levels and improving their financial health since the last crisis.

Read on.

Two former Bank of America wealth management trainees are suing the bank for not paying overtime

Two former Bank of America trainees were disturbed when they found themselves working 10-hour days and even, sometimes, weekends during their training programs. Now they’re suing the bank for not paying them overtime, Bloomberg reports.

Zaq Harrison and Andrew Blum were part of the bank’s “Practice Management Development” trainee program, which according to Bank of America’s website, is designed to teach trainees how to become financial advisors and build their own wealth management practices.

They’re planning to represent about 100 others who have been part of that program over the past several years, the report said.

Altogether, they’re seeking $5 million.

Read more: http://www.businessinsider.com/bank-of-america-trainees-sue-for-overtime-2015-3#ixzz3TdVp9Ngp

Mortgage scammer commits fraud from inside jail cell

Alan Tikal stole $5.8 million from homeowners

A California man will spend the next 24 years in prison for leading a mortgage fraud scheme through which he stole $5.8 million in fees and monthly payments from struggling homeowners.

In September, Alan Tikel, 46, was convicted of 11 counts of mail fraud and one count of money laundering stemming from his role in a “large-scale mortgage fraud scheme,” and this week was sentenced to 24 years in prison, California Attorney General Kamala Harris and United States Attorney for the Eastern District of California Benjamin Wagner announced Thursday.

What’s more, even after getting busted, Tikel continued to commit fraud while incarcerated.

According to evidence presented at trial, between January 7, 2010 and August 20, 2013, Tikal operated a business under the name KATN, which targeted “vulnerable and non-English speaking homeowners,” who were looking for mortgage assistance in the wake of the financial meltdown.

Tikal and his associates promised homeowners that their outstanding mortgage debt would be reduced by 75%. Tikal also falsely claimed that he was a registered private banker with access to an “enormous” line of credit and was able to pay off homeowners’ debt in full.

In exchange for various fees and payments, Tikal claimed the homeowners’ existing mortgages would then be satisfied and replaced with new loans to Tikal at 25% of the original loan obligation.

According to evidence, there were no instances in which a homeowner’s mortgage was paid, forgiven, or extinguished by Tikal.

Instead, Tikal took the victim’s money from himself and spent it on chartered airline travel, a $5,000 suit, new cars, and other extravagant living expenses, the State of California said in a release.

Read on.

Federal judge dismisses complaint against foreclosure property management company

A Bethel Park couple’s dispute with a national property management company that broke into their home has to move to state court, a federal judge ruled Thursday.

Safeguard Properties of Valley View, Ohio, handles foreclosure services by hiring contractors to take possession of abandoned homes.

Alexandra and Anthony Hlista claim in their lawsuit that they weren’t in foreclosure when they returned from a trip to find a hole knocked into their back door, the locks changed and the windows nailed shut.

They claimed Safeguard and a local contractor violated state and federal consumer protection laws by repeatedly breaking into their home and violated federal racketeering laws because they used mail and electronic communications to set up the break-ins.

U.S. District Judge Cathy Bissoon rejected their attempt to “federalize” what she described as “property preservation activities gone awry.” She dismissed the lawsuit, but left open the possibility of the Hlistas could file the case again in state court.

Read more: http://triblive.com/news/adminpage/7910247-74/federal-state-foreclosure#ixzz3Ta7cLr00

Fed says: Bank of America would be OK if the economy tanked

If the U.S. economy plunged into another bad recession, Bank of America would be OK. So say the experts at the Federal Reserve in Washington.

Charlotte-based Bank of America Corp. (NYSE:BAC) passed its so-called stress test for 2015, according to results of the latest Dodd-Frank Act Stress Tests, released at 4:30 p.m. on Thursday by the Federal Reserve.

Read on.