Daily Archives: May 15, 2015

Bernie Sanders Knocks Wall Street’s Casino-Style Gambling Tactics

Senator Elizabeth Warren applauds Bernie Sanders’ presidential bid, and says, “I think that Bernie Sanders is going to play out a vision for America and that it is important for people to hear what he has to say.” Progressive Democrats have been urging Senator Warren to make a bid for the presidency as well. However, she and Sanders see eye-to-eye on many issues, including the banking issue.

In a recent Bloomberg Politics interview, Sanders said, “I voted for the Dodd-Frank legislation, but let us not kid ourselves….it was a modest piece of legislation…it did not end much of the “casino style gambling” that takes place on Wall Street.”

“In fact,” he says, “much of this reckless activity is still going on today. In the midst of all this grotesque wealth-income inequality sits Wall Street. If an institution is too big to fail, it is too big to exist. And that is the bottom line.”

But is it, really?

Regards,
Richard

Wells Fargo in hot water over kickback allegations

Wells Fargo is once again in hot water, this time over force-placed insurance.

The banking giant, along with perennial defendant Assurant, is being sued in federal court over an alleged force-placed insurance kickback scheme, in which plaintiffs claim that Assurant artificially inflated premiums on insurance in order to pay kickbacks to Wells Fargo.

Three plaintiffs, suing Wells Fargo and Assurant individually “and on behalf of all others similarly situated,” claim that when their homeowner policies were not renewed, Wells Fargo force-placed policies which cost significantly more than their previous insurance – in some cases more than twice as much – covered only the structure of the home and protected only Wells Fargo. They further allege that Wells Fargo received a commission for the more expensive policies.

Read on.

No class action vs. Morgan Stanley alleging Detroit predatory lending

A federal judge in Manhattan on Thursday refused to let thousands of Detroit homeowners sue Morgan Stanley as a group for allegedly pushing a subprime lender into making risky loans they could not afford.

U.S. District Judge Valerie Caproni said her decision was likely “a death knell” for the lawsuit and that an appeal may be appropriate, but that the plaintiffs’ claims were too varied to be addressed in a single class action.

The complaint was originally filed in October 2012 by the American Civil Liberties Union, in what that group called the first U.S. lawsuit accusing an investment bank of discrimination for having packaged subprime mortgage loans into securities.

Read on.

U.S. SEC a stumbling block in banks’ forex guilty pleas – sources

Banks want assurances from U.S. regulators that they will not be barred from certain businesses before agreeing to plead guilty to criminal charges over the manipulation of foreign exchange rates, causing a delay in multibillion-dollar settlements, people familiar with the matter said.

In an unprecedented move, the parent companies or main banking units of JPMorgan Chase & Co (>> JPMorgan Chase & Co.), Citigroup Inc (>> Citigroup Inc), Royal Bank of Scotland Group Plc (>> Royal Bank of Scotland Group plc), Barclays Plc (>> Barclays PLC) and UBS Group AG (>> UBS Group AG) are likely to plead guilty to rigging foreign exchange rates to benefit their transactions.

Read on.

Mortgage fraudster tried to murder witness

An Alabama man was sentenced to 17 years in prison for conspiring to defraud financial institutions and launder stolen funds as part of a $15 million, multi-state mortgage fraud scam that ended with the attempted murder of a witness against him.

Kinard Henson, 43, Ventress, Alabama, used phony documents and straw buyers to make illegal profits on overbuilt condos, court records show.

The defendant previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a second superseding indictment charging him with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and one count of attempted murder of a witness in a federal case.

Read on.

Is Mike Huckabee wrong about housing?

Housingwire:

Former Arkansas Gov. Mike Huckabee announced his campaign earlier this month in his hometown of Hope, Arkansas. In his first speech as an official candidate, Huckabee touched many of the expected touchstones of his campaign, including the “dysfunctional” government in Washington, repealing Obamacare, “conquering” jihadism, banning both abortion and gay marriage.

But Huckabee also touched, ever so briefly, on an issue that HousingWire follows very closely – housing.

Here’s the important bit for those us who monitor housing closely, bolded for emphasis –

Washington is more dysfunctional than ever and has become so beholden to the donor class who fills the campaign coffers that it ignores the fact that one-in-four American families are paying more than half their income for housing. Home ownership is at the lowest level in decades and young people with heavy student debt aren’t likely to afford their first home for a while.

Our federal policies for affordable housing aren’t designed to protect families, but to protect bureaucrats. A record number of people are enrolled in government operated help programs like food stamps, not because they want to be in poverty, but because they are part of the bottom earning 90% of American workers whose wages have been stagnant for 40 years. The war on poverty hasn’t ended poverty; it’s prolonged it. I don’t judge the success of government by how many people are on assistance, but by how many people have good jobs and don’t need government assistance.

(Transcript provided by Real Clear Politics)

Huckabee isn’t wrong in his comments on the amount that American’s are currently paying for housing or that homeownership is at a record low, but there is one part where Huckabee is mistaken – at least according to a new report from TransUnion.

The new report from TransUnion shows younger consumers with student debt are actually quite able to get a mortgage.

According to the TransUnion report, consumers between the ages of 18 and 29 with a student loan in repayment are “generally able” to gain access to new loans and perform as well or better on those new loans as similarly aged consumers without student loans.

Chase closes massive $45B Fannie Mae MSR deal from Ocwen

The previously announced sale of $45 billion in mortgage servicing rights fromOcwen Loan Servicing, a wholly-owned subsidiary of Ocwen Financial (OCN), to Chase, the banking business for JPMorgan Chase & Co. (JPM) is now official.

The sale was previously announced in March, and includes 266,000 “high-quality” Fannie Mae loans worth an estimated $45 billion.

The deal was subject to a definitive agreement and required approval from Fannie Mae and the Federal Housing Finance Agency. Those approvals are now official and the deal is done, according to Chase and Ocwen

“Buying this prime servicing book will improve the quality of our servicing portfolio and will help drive a stronger and less volatile mortgage business,” said Chase Mortgage Banking CEO Kevin Watters.  “We expect the portfolio, in addition to lower delinquency rates overall, will help improve the value of our business.”

Read on.