Daily Archives: June 17, 2015

Big Banks’ Mortgage Units — Still Failinl Customers — Face New Restrictions

Memo to government agencies: Told us so!!

Huffington Post:

Remember that time the nation’s largest banks engaged in fraud and deceptive lending to fuel Wall Street’s insatiable appetite for dodgy investments backed by home mortgages?
Remember how in the aftermath of the economic collapse, after the banks received massive taxpayer bailouts, some of the same financial institutions totally botched the handling of an epochal wave of foreclosures that their actions had helped to bring about? And how untold thousands of people lost their homes as a result? And how federal regulators chose to ignore warnings about the looming crisis, then looked the other way as mortgage companies misapplied homeowner payments, lost piles of paperwork, and generally made it next to impossible for borrowers to take advantage of (flawed) government-sponsored refinancing programs meant to stem the tide of foreclosures?
Perhaps you recall that as part of a legal deal struck in 2011 with the Office of the Comptroller of the Currency, more than a dozen major mortgage companies paid supposedly independent auditors to review the foreclosure documents of aggrieved borrowers?
This is all ringing a bell, right?

How about that time the OCC abruptly scrapped the whole program amid cost overruns and allegations of bank employees interference?
Were you, perchance, aware that a key condition of that 2011 legal agreement required the mortgage companies to overhaul how they “service,” or manage, home loans, to prevent a return to those abuses?
Sure, you’ve been paying attention.

But did you know that 99.7 percent of all checks that the banks mailed to consumers as part of a subsequent settlement were for $6,000 or less?
So then would you be at all surprised to learn that now, four years later, some of the key players still haven’t lived up to the terms of the deal, and homeowners are still suffering as a result?
No? Me neither.
On Wednesday, the OCC announced that six banks that manage home loans — EverBank, HSBC, JPMorgan Chase, Santander Bank, U.S. Bank and Wells Fargo — haven’t implemented all the reforms they promised to make as part of the 2011 deals.

Wal-Mart uses tax havens to cut taxes on foreign units: advocacy group

4Traders:
(Reuters) – Wal-Mart Stores Inc has built a network of 78 subsidiaries and branches in 15 offshore tax havens to minimize taxes on its operations outside the United States, said a report by tax reform advocacy group Americans for Tax Fairness released on Wednesday.
Wal-Mart, the world’s largest retailer, has assets worth at least $76 billion through shell companies domiciled in Luxembourg and the Netherlands, the report said.

The report says Wal-Mart does not list these subsidiaries in its annual filings and called on the U.S. Securities and Exchange Commission to require disclosure to make the tax practices transparent to investors.

Another Fed “Insider” Quits, Tells The Truth

Zerohedge:

Once more, an “insider” from The Fed exposes the reality of an academic ivory tower clueless of the real financial markets. Former adviser to Dallas Fed’s Dick Fisher, Danielle DiMartino Booth speaking in a CNBC interview slams The Fed for “allowing the [market] tail to wag the [monetary policy] dog,” warning that “The Fed’s credibility itself is at stake… they have backed themselves into a very tight corner… the tightest ever.” As she writes in her first Op-Ed, “The hope today is that the current era of easy monetary policy will have no deep economic ramifications. Such thinking, though, may prove to be naive… All retirees’ security is thus at risk when the massive overvaluation in fixed income and equity markets eventually rights itself.”

JPMorgan wins dismissal of shareholder lawsuit over London Whale

Yahoo:

NEW YORK (Reuters) – JPMorgan Chase & Co (JPM.N) officials including Chief Executive Officer Jamie Dimon do not have to face a shareholder lawsuit claiming they failed to properly investigate the “London Whale” trading scandal that caused $6.2 billion in losses, a federal appeals court ruled on Tuesday.

The 2nd U.S. Circuit Court of Appeals in New York said a lower court judge did not abuse his discretion by dismissing the lawsuit by shareholder Ernesto Espinoza.

Writing for a three-judge appeals court panel, Chief Judge Robert Katzmann said Espinoza did not meet the high standard of showing the board committed “gross negligence” in probing the losses and deciding not to sue people who were involved.

HSBC and JPMorgan are reportedly in talks to move parts of their businesses to Luxembourg over fears of a ‘Brexit’

(Reuters) – HSBC Holdings Plc and JPMorgan Chase & Co are in talks to relocate parts of their businesses to Luxembourg from the UK as they weigh the possibility of a British exit from the European Union, the Times reported.

JPMorgan is close to setting up a bank based in Luxembourg to handle the clearing of eurozone transactions, paving the way for the U.S. bank to transfer more of its business out of the UK in the event of a Brexit, the Times reported. (http://thetim.es/1GIE2d9)

Judge: Gov Brown and Legislature illegally raided homeowners fund

Gov. Jerry Brown and the Legislature illegally raided a state fund that was created to help distressed homeowners and took $331 million to balance the budget, a judge has ruled. The money was taken from a fund that contained California’s share of a $5 billion nationwide settlement of a fraud suit by states and the federal government against the nation’s five largest mortgage lending companies: Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo and Ally Financial, formerly known as GMAC. The settlement, which state Attorney General Kamala Harris negotiated in 2012 for California, was designated for foreclosure relief, aid to homeowners and other housing-related purposes. Starting in June 2012, however, Brown and the Legislature appropriated most of the fund to help pay down the state’s deficit over three fiscal years, through mid-2014. [SF GATE] – See more at: http://stopforeclosurefraud.com/2015/06/16/judge-gov-brown-and-legislature-illegally-raided-homeowners-fund/#.dpuf

A NEW LOOK AT THE U.S. FORECLOSURE CRISIS: PANEL DATA EVIDENCE OF PRIME AND SUBPRIME BORROWERS FROM 1997 TO 2012

A New Look at the U.S. Foreclosure Crisis: Panel Data Evidence of Prime and Subprime Borrowers from 1997 to 2012 Fernando Ferreira and Joseph Gyourko NBER Working Paper No. 21261 June 2015 JEL No. E0,G0,H0,J0,R0 ABSTRACT Utilizing new panel micro data on the ownership sequences of all types of borrowers from 1997-2012 leads to a reinterpretation of the U.S. foreclosure crisis as more of a prime, rather than a subprime, borrower issue. Moreover, traditional mortgage default factors associated with the economic cycle, such as negative equity, completely account for the foreclosure propensity of prime borrowers relative to all-cash owners, and for three-quarters of the analogous subprime gap. Housing traits, race, initial income, and speculators did not play a meaningful role, and initial leverage only accounts for a small variation in outcomes of prime and subprime borrowers. – See more at: http://stopforeclosurefraud.com/2015/06/16/a-new-look-at-the-u-s-foreclosure-crisis-panel-data-evidence-of-prime-and-subprime-borrowers-from-1997-to-2012/#.dpuf