Daily Archives: September 3, 2015

NJ title company owner stole $7.7M

The owner of a New Jersey title firm plead guilty to stealing funds that were supposed to be used to pay off mortgages.

New Brunswick Patch has the story.

The owner of a Woodbridge-based title company has pleaded guilty to stealing $7.7 million that was supposed to be used to pay off more than 28 mortgages on properties that were sold.

Robert M. Sebia, 50, a resident of Wilkes Barre, Pennsylvania, who owned and operated Crystal Title Agency, LLC, pleaded guilty Monday to theft by failure to make required disposition of property received and misconduct by a corporate official.

According to NJ.com, that title agency is now defunct, but it had been based in Woodbridge.

Los Angeles drops mortgage discrimination case against JPMorgan

Los Angeles has dropped a lawsuit accusing JPMorgan Chase (>> JPMorgan Chase & Co.), the largest U.S. bank, of discriminatory mortgage lending, ending the first of the city’s four lawsuits accusing major banks of driving up foreclosures among minority borrowers.

Disclosed in a filing on Tuesday in a California federal court, the agreement ends a lawsuit attempting to hold the bank liable for lost property tax revenues caused by falling home values and the cost of repairing blight in minority neighborhoods hit by foreclosures.

A hangover from the 2007-2008 financial crisis, the lawsuit and others like it were brought by a handful of local governments claiming damages for economic destruction wrought nationwide by foreclosures, lost taxes and neighborhood blight. The legal actions have brought only mixed results as banks strongly contested claims that they discriminated.

Read on.

What Were the Major Causes of the 2008 Financial Crisis?

The National Center for Policy Analysis (NCPA) Financial Crisis Initiative is accumulating talent from scholars and practitioners nationwide to research and come to consensus on two central questions of 2008:
What were the major causes of the financial crisis?
What policies can and should be implemented to prevent a reoccurrence?
To answer these questions, the NCPA has gathered a team of experts who will focus their attention on how government policy and financial service firms may have interacted. I’m honored to be part of this initiative, contributing my direct experiences with Citigroup and the Financial Crisis Inquiry Commission, among others.
This week, an op-ed that Allen West, President and CEO of NCPA and I co-authored, as part of that initiative,  appeared in CNS News. It appears we have not learned from the 2008 debacle and are once again getting entrapped in the same old maelstrom that led to 2008.

Citigroup is backing a bid led by Goldman Sachs in an attempt to buy £13bn of UK taxpayer-owned mortgages

The Wall Street banking giant Citigroup is joining forces with one of its biggest rivals in an attempt to snap up a £13bn package of mortgage assets owned by British taxpayers.

Sky News has learnt that Citi has signed up to a consortium led by Goldman Sachs and involving units of Blackstone, TPG  and Och-Ziff, the New York-based hedge fund manager.

The addition of Citi to the bid for a mortgage securitisation vehicle called Granite, which is part of UK Asset Resolution (UKAR), brings another deep-pocketed Wall Street player into an auction ordered by George Osborne, the Chancellor, earlier this year.

Read on.

HUD’s Proposal to Terminate FHA Insurance Policies Could Terminate the FHA Program

If there is anything that galls servicers of government-insured loans, it is the forfeiture or curtailment of all accrued interest from mortgage insurance claims resulting from the failure to foreclose fast enough within artificially created state time lines. At first glance, the U.S. Department of Housing and Urban Development (“HUD” or the “Department”) listened to the complaints of servicers who argued that they should not be penalized for pursuing foreclosure avoidance options or experiencing delays in the legal system beyond their control. HUD’s proposed regulation regarding changes to the Federal Housing Administration’s (“FHA”) single-family mortgage insurance claim filing process includes proposals that pro rate the curtailment of interest based on actual delays caused by the servicer, proposing to eliminate the complete forfeiture of accrued interest for only one day of delay. So far, so good, but HUD did not stop there. HUD also proposed the complete extinguishment of an FHA insurance policy if the servicer does not complete foreclosure within a new set of artificial time lines. Read together, HUD’s reform is to provide servicers with more accrued interest if they do not foreclose fast enough, unless, of course, HUD invalidates the whole insurance policy—the loss of both principal and interest—by virtue of HUD’s subjective definition of unreasonable delays. Few servicers think that is progress.

This proposal raises significant questions and concerns for FHA mortgagees that hold and service FHA-insured loans, many of which could have a chilling effect on FHA lending and servicing activities if HUD were to implement the proposed claim filing deadline as proposed and without significant changes to HUD’s claim filing guidelines and procedures.

Read on.

BofA Investors Urged to Reject Moynihan’s Chairman Position

Bank of America Corp. shareholders should oppose a proposal allowing Chief Executive Officer Brian Moynihan to remain chairman, proxy adviser Glass Lewis & Co. said.

Moynihan, 55, became chairman in October after the second-largest U.S. lender amended shareholder-backed bylaws created in 2009 that require an independent chairman. The bank’s investors are scheduled to vote Sept. 22 on a proposal that would ratify that change.

“We do not believe the company has provided sufficient rationale that shareholders should ratify the board’s decision to repeal a hard-fought governance reform,” Glass Lewis said Wednesday in a report. “Vesting a single person with both executive and board leadership may concentrate too much responsibility in a single person.”

Proxy advisers pushing to split the top jobs at Bank of America have an uphill climb. The lender’s biggest shareholders include institutional investors such as BlackRock Inc. that don’t oppose a combined CEO-chairman so long as the board has a lead independent director with certain powers.

Read on.

Wall Street Punishes Troubled Student Loan Giant Navient Corp.

Investors fled Navient Corp. on Wednesday, sending shares in the nation’s largest student loan company to an all-time low as federal consumer regulators prepare a possible lawsuit targeting the loan specialist over its alleged mistreatment of borrowers.

Navient stock closed at $12.16 after falling to $11.97 in Wednesday trading, its lowest price since the company spun off from Sallie Mae last year. Its shares have plummeted nearly 44 percent since the start of the year, making it one of the worst performers in the Standard and Poor’s 500 Index. The S&P 500 has tumbled about 5 percent this year, while shares in one of Navient’s main competitors, Nelnet Inc., have dropped by 21 percent.

Traders also have pummeled Navient’s debt securities as worries spread that the company may not make good on its obligations. The price of Navient’s 10-year notes due in 2024 have fallen 13.63 cents over the last three months to 83.75 cents on the dollar, according to data compiled by the Financial Industry Regulatory Authority.

Wall Street is meting out punishment as the Consumer Financial Protection Bureau readies a possible lawsuit against Navient, a major Department of Education student loan contractor, for allegedly cheating borrowers. The consumer bureau sent Navient a letter on Aug. 19 telling its executives that the agency’s enforcement staff had found enough evidence indicating that the company violated consumer protection laws, according to an Aug. 24 filing with the Securities and Exchange Commission.

Read on.