Daily Archives: August 7, 2015

Court issues stay in PHH’s $109.2M CFPB penalty

A D.C. Circuit Court has issued a stay against a $109.2 million fine levied against PHH Corp. (PHH) by theConsumer Financial Protection Bureau’s director, Richard Cordray.

Cordray’s decision in June held that PHH violated the Real Estate Settlement Procedures Act every time it accepted a kickback payment on or before July 21, 2008 – going far beyond Administrative Law Judge Cameron Elliot’s ruling, which had limited PHH’s violations to kickbacks that were connected with loans that closed on or after July 21, 2008 — a mere $6.4 million penalty.

Cordray issued a final order in June that requires PHH to disgorge $109.2 million – all the reinsurance premiums it received on or before July 21, 2008.

In late June, PHH Corp. urged the D.C. Circuit Court to overturn the CFPB’s order.

Read on.

Bank of America selling $1.2B in delinquent home loans

Bank of America (BAC) is selling $1.2 billion of mostly delinquent home loans, meeting investor demand for soured mortgages. Per Bloomberg:

The company is selling five pools consisting of nonperforming debt, loans that have been modified and resumed payment, and some that haven’t defaulted, according to a person with knowledge of the matter. Four of the pools are being serviced Bank of America and one is managed by Ocwen Financial Corp., said the person, who asked not to be identified because the planned sale is private.

Why The U.S. Isn’t Prosecuting White Collar Criminals

Now that is the million dollar question…

A British banker is headed to prison for over a dozen years for cheating the markets, but American prosecutions of financial and other professionalized crimes are at their lowest levels in 20 years, according to data compiled by Syracuse University’s Transaction Records Access Clearinghouse (TRAC).

The decline in American vigor against crooks who keep their hands clean comes as Britain prepares to send a financier to prison for his role in a megabank conspiracy to rig interest rates in their favor. Tom Hayes, 35, was sentenced Monday to 14 years behind bars by a British jury.


William Black, a white collar criminologist and finance professor who helped expose the vast fraud underlying the Savings & Loan (S&L) crisis of the 1980s and then authored a book titled “The Best Way To Rob A Bank Is To Own One,” said the prosecutorial neglect going on today makes future abuses more likely.

“This means that deterrence has been eliminated and the fraud epidemics that drive our future financial crises will be led by the same elite bankers who will already have fraud schemes down pat,” Black said in an email. “Both results are in sharp contrast to the S&L debacle, with more than 1,000 felony convictions in cases…that were hyper-prioritized against the most elite and destructive defendants.”

The government’s response to the fraudulent deals that triggered the S&L crisis was far more robust from the jump, as the New York Times has detailed. There were multiple task forces set up within the first two years after the crisis broke that specifically investigated criminal behavior related to the S&L meltdown. By contrast, federal officials took over a year after the housing market collapsed to even propose a task force – and the idea was shot down by Justice Department decisionmakers. It would eventually reverse course and create the task force 3 years after the crisis, but that team was notoriously underfunded and overhyped.

The more than one-third drop in white collar casework documented in TRAC’s data is in keeping with a longstanding trend. Annual white collar crime prosecutions have been falling gradually ever since the mid-90s, apart from a brief, slight resurgence in the three years immediately following the housing market’s collapse. Even during that post-crisis bounce in activity, white collar prosecutions made up a far smaller share of overall federal cases than they did from 1995-97.

Read on.