Monthly Archives: June 2015

Deutsche Bank Staff Probed Over Libor by Frankfurt Prosecutors

Frankfurt prosecutors are investigating Deutsche Bank AG employees over their roles in the Libor-rigging scandal.

Authorities opened the probe after receiving a Libor report compiled by German financial regulator Bafin, said Nadja Niesen, a spokeswoman for Frankfurt prosecutors.

“We will first analyze the Bafin report before deciding where this investigation will head,” said Niesen. “There is nothing more to say about the case at the moment.”

The Frankfurt-based lender has paid billions of dollars in fines to settle investigations into its role in rigging the London interbank offered rate. The misconduct involved at least 29 Deutsche Bank employees including managers, traders and rate-submitters, primarily based in London but also in Frankfurt, Tokyo and New York, according to the U.K. Financial Conduct Authority.

Read on.

Regulators: Banks still failing mortgage service tests

Four years after pledging to clean up wide-ranging foreclosure abuses, Wells Fargo & Co., JPMorgan Chase & Co. and four other banks still aren’t complying with customer-service standards imposed by a federal regulator.

The Office of the Comptroller of the Currency said last week that it has restricted mortgage servicing operations at Wells Fargo, Chase, U.S. Bancorp, Santander Bank, EverBank Financial Corp. and HSBC Holdings.

“We’re not satisfied with where they are at this point in time,” Morris Morgan, deputy comptroller for large banks, said during a conference call.

By contrast, the agency said it had lifted consent orders against Bank of America Corp., Citigroup Inc. and PNC Financial Services, finding that they have complied with the orders issued in April 2011 and amended in February 2013.

Morgan said regulators expect that Wells Fargo, Chase and the other four noncomplying banks to take “months, not years,” to meet servicing standards.

For now, the banks must seek permission from the comptroller to name senior servicing managers, set up offshore call centers or acquire mortgage servicing business, which collects payments and handles foreclosures.

Read on.

Revolving Door Spins: “Retired” Dallas Fed Chief Joins Barclays As “Senior Advisor”

Spin revolving door, spin.

Recently “retired” Dallas Fed chief Richard Fisher — who really, really believed that talk of falling oil prices negatively affecting the Texas economy amounted to “bull droppings” until a JP Morgan analyst reminded him that the “only thing dropping in the Texas economy [was] jobs” — is following proudly in the footsteps of Ben Bernanke, Jeremy Stein, and Janet Yellen (if you count unofficial, off-the-record ‘consultations’) by becoming the latest Fed policymaker to ink a lucrative deal ‘advising’ the private sector.

As WSJ reports, Fisher will become a “senior advisor” to Barclays starting on July 1:

Barclays PLC on Monday named Richard Fisher, who recently retired from his post as head of the Federal Reserve Bank of Dallas, as senior adviser at the bank.

Read on.

JPMorgan Just Cornered The Commodity Derivative Market, And This Time There Is Proof

Zerohedge:

For years there had been speculation, rumor and hearsay that JPM had cornered the US commodities market. Now, finally, we have documented proof.

* * *

Traditionally, we look at the OCC’s Quarterly Bank Report on derivatives activities to see which was the largest bank in the US in terms of total notional derivative holdings. The reason being that like on frequent occasions in the past, we find some stunning  results, such as most recently in January when we wrote that, for the first time, Citigroup had eclipsed JPM as the largest US bank in total derivatives, with just over $70 trillion compared to perennial megabank JPM’s $65.3 trillion as of the third quarter of 2014, explaining also why Citigroup had drafted the Swaps push out language in the Omnibus Bill.

And while this time there was little exciting to report at the consolidated level (JPM overtook Citi in Q4 only for Citi to once again become the world’s largest bank in total derivatives with $56.6 trillion compared to $56.2 trillion for JPM and $52 trillion for Goldman as Bloomberg reported earlier), and in fact total notional derivatives tumbled from $220.4 trillion in Q4 to $203.1 trillion in Q1 the lowest level since 2008…

Victory for HECM Non-Borrowing Spouses at Last

After more than six years of struggle for justice for older Americans whose spouses borrowed money through HECM reverse mortgages, we have victory!

HECM surviving non-borrowing spouses will be able to stay in their homes if their borrowing spouses die without having to spend huge sums of money to pay down the mortgage loan balance, an obstacle to a humane resolution of the  non-borrowing spouses’ displacement crisis.

A new policy released on Friday, June 12, 2015 removed two harsh conditions in a now revoked policy that we strongly objected to on this blog. We are grateful to God for this sweet victory!

We grateful to the many surviving non-borrowing spouses, their families, and their lawyers across the country who reached out to us and shared their harrowing stories with us. Their stories inspired us to fight on, even when the outcome looked bleak, even when many thought we were crazy to challenge the “considered” HECM reverse-mortgage policies of a very powerful federal bureaucracy such as the U.S. Department of Housing & Urban Development (HUD), even when many industry voices fell silent and resigned to policies that hurt their customers as well as their own bottomline.

Read on.

Miami-Dade to close dedicated foreclosure courts

Miami-Dade Circuit Court will stop dedicating three courtrooms to foreclosure cases as their backlog winds down. Circuit Judge Jennifer Bailey, head of civil courts, ordered that trials and summary judgments involving foreclosures will be assigned to circuit judges rather than senior judges in the foreclosure-dedicated courtrooms. The foreclosure courts in Miami-Dade will formally shut down on Tuesday, June 30, the last day of the state’s fiscal year. In 2013, the state government provided its court system with extra funding, temporary staff and other resources to clear a mounting number of foreclosure cases. The state hasn’t renewed the extra funding. – See more at: http://therealdeal.com/miami/blog/2015/06/27/miami-dade-to-close-dedicated-foreclosure-courts/#sthash.ClRYC5fw.upOSOBga.dpuf

Supreme Court: Fair Housing Act claims can use “disparate impact”

In a blow to the housing and mortgage finance industry but a victory for fair housing advocates, the Supreme Court ruled in a contentious and qualified opinion that the legal doctrine of “disparate impact” is cognizable under the Fair Housing Act.

The 5-4 decision holds that there is a disparate impact claim under the FHA as a matter of statutory interpretation.

The majority opinion, which can be read here and which was written by Justice Anthony Kennedy, strongly cautions that remedial orders in disparate impact cases that impose racial targets or quotas could be unconstitutional.

The question in the case of Texas Department of Housing and Community Affairs v. Inclusive Communities Projectsis whether the Fair Housing Act allows lawsuits based on disparate impact – that is, an allegation that a law or practice has a discriminatory effect, even if it wasn’t based on a discriminatory purpose. The Court had granted review to consider this question in two earlier cases, but both of those cases settled before the Court could rule on them.

Read on.