Daily Archives: September 14, 2015

Behold The European Recovery: Deutsche Bank To Fire 25% Of All Workers

Here’s Reuters:

Deutsche Bank (DBKGn.DE) aims to cut roughly 23,000 jobs, or about one quarter of total staff, through layoffs mainly in technology activities and by spinning off its PostBank (DPBGn.DE) division, financial sources said on Monday.

That would bring the group’s workforce down to around 75,000 full-time positions under a reorganization being finalised by new Chief Executive John Cryan, who took control of Germany’s biggest bank in July with the promise to cut costs.

Cryan presented preliminary details of the plan to members of the supervisory board at the weekend.

A spokesman for the bank declined comment.

The bank is primarily reviewing cuts in the parts of its technology and so-called back office operations that process transactions and work orders for client-facing staff. A significant number of the some 20,000 positions in that area will be reviewed for possible cuts, a financial source said.

Officials Cover Up Housing Bubble’s Scummy Residue: Fraudulent Foreclosure Documents

Great article by David Dayen!

VERY DAY IN AMERICA, mortgage companies attempt to foreclose on homeowners using false documents.

It’s a byproduct of the mortgage securitization craze during the housing bubble, when loans were sliced and diced so haphazardly that the actual ownership was confused.

When the bubble burst, lenders foreclosing on properties needed paperwork to prove their standing, but didn’t have it — leading mortgage industry employees to forge, fabricate and backdate millions of mortgage documents. This foreclosure fraud scandal was exposed in 2010, and acquired a name: “robo-signing.”

But while some of the offenders paid fines over the past few years, nobody cleaned up the documents. This rot still exists inside the property records system all over the country, and those in a position of authority appear determined to pretend it doesn’t exist.

In two separate cases, activists have charged that officials and courts are hiding evidence of mortgage document irregularities that, if verified, could stop thousands of foreclosures in their tracks. Officials have delayed disclosure of this evidence, the activists believe, because it would be too messy, and it’s easier to bottle up the evidence than deal with the repercussions.

“All they’re doing is making a mockery of our judicial system,” said Bill Paatalo, a private investigator and one of the activists.

Like many other anti-foreclosure activists, Paatalo got involved with the issue through a case involving his own property — in Absarokee, Montana. Like many homeowner loans purchased during the housing bubble, Paatalo’s was packaged into a mortgage-backed security.

The process worked like this: The loans were eventually sold into a tax-exempt REMIC (Real Estate Mortgage Investment Conduit) trust; the REMIC trust received monthly mortgage payments from homeowners; and the payments were passed along to investors in the mortgage-backed securities.

The trust where Paatalo’s mortgage ended up is known as “WaMu Mortgage Pass-Through Certificates Services 2007-OA3 Trust.” When he faced foreclosure, the trust, as the nominal owner of the mortgage, was the plaintiff.

In doing research for his own trial, Paatalo discovered that all “foreign business trusts” established outside of Montana have to register with the Secretary of State in order to transact business, under Title 35-5-201 of the Montana code. Trustees must file an application, along with legal affidavits affirming its trust agreement and identifying all trustees, and pay a $70 filing fee.

WaMu Mortgage Pass-Through Certificates Services 2007-OA3 Trust — based in Delaware — didn’t.

That means that the trust could not acquire property in Montana — precisely what it was alleging it did in Paatalo’s foreclosure case. An affidavit from Tana Gormely, a deputy for the Business Services Division in the Montana Secretary of State’s office, confirms that the 2007-OA3 trust “is not registered with our office as required by law.”

Read on.

Credit Suisse to pay $80 million to settle dark pool allegations: Bloomberg

(Reuters) – Credit Suisse Group AG (>> Credit Suisse Group AG) will pay more than $80 million to settle allegations that it did not disclose how it operated its dark pool private share trading exchange to clients, Bloomberg reported, citing a person familiar with the matter.

The Swiss bank will pay more than $50 million in fines and disgorgement to the U.S. Securities and Exchange Commission and about $30 million to the New York Attorney General, the news agency reported. (http://bloom.bg/1KaOp7U)

SEC and Credit Suisse representatives declined to comment. Officials at the New York Attorney General’s office did not immediately respond to a request for comment.

Read on.

Banks’ secretive chat system gets OK from state regulator

Wall Street’s newest chat program won’t be silenced — but it won’t be as opaque as banks had first hoped.

Four banks got the green light on Monday to use the new system, called Symphony — but only after agreeing to beef up its ability to track chats among traders.

Symphony had tried to entice the banks — Goldman Sachs, Deutsche Bank, Bank of New York Mellon, and Credit Suisse — with features that allowed them to erase some of their paper trail, according to the company’s marketing materials that have since been retracted.

But New York’s financial services regulator would have none of it — and forced changes to allow Anthony Albanese’s Department of Financial Services greater insight into what Wall Street’s money men were talking about.

“This is a critical issue since chats and other electronic records have provided key evidence in investigations of wrongdoing on Wall Street,” Albanese, DFS’ acting superintendent, said in a statement. “It is vital that regulators act to ensure that these records do not fall into a digital black hole.”

Read on.

Fiderer publishes “The Plot To Destroy Fannie Mae”

David Fiderer is a prolific writer on the GSEs and his new book, The Plot To Destroy Fannie Mae: Anatomy Of A Power Grab, is now available on Kindle through Amazon.

Here’s the dust jacket blurb, if e-books can be said to have dust jacket.

For more than a decade, Fannie Mae has been portrayed as a mismanaged and corrupt company that collapsed in 2008 because of the fatal flaws in its business model. Henry Paulson blames Fannie and Freddie Mac for triggering the housing bubble and the financial crisis. This book addresses the mendacity used to distract away from Wall Street corruption.

You can check some of his other work here. Check out HousingWire’s ongoing coverage of the FannieGate saga here.

Here’s a quick rundown from Bill Maloni’s GSE blog.

All of Fiderer’s research comes from publicly available documents, which is pleasing and easily verifiable. (Reportedly, he wore out two library cards at the NYC public library branch in Greenwich Village.)

Fiderer describes why F&F were not derelict when Paulson led his insidious and politically motivated actions, nor was their low-income lending anywhere near as red-ink-filled as their so called “private sector competitors.” In fact, the banks had three and four times the losses on their in-house mortgage-backed securities as Fannie and Freddie accrued, a fact their detractors and most of Washington chooses to ignore, as the Congress and the Obama Administration bend over backwards to accommodate the Too Big to Fail” (TBTF) Banks.

(I encouraged DF to conclude his long editing process and publish it, now, “warts and all,” so you can partly blame me for any typos, etc. I just thought he should get his labor of love out there ASAP because it is so rich in what people are talking about today in the GSE world. His facts aren’t flawed, just a word here and there, and a few of his sentences.)

Because of their roles in setting up a hurricane of GSE lies and specious allegations, Treasury Secretary Hank Paulson and some of his Administration colleagues, OFHEO regulatory officials Armando Falcon, Steven Blumenthal, Alfred Pollard, FHFA Director James Lockhart, media types, and other public officials inhabit Fiderer’s special GSE rogues gallery.

They all put their DNA and fingerprints on the choreographed downfall of the nation’s premium mortgage finance companies, for reasons which most readers will understand don’t pass muster but which still seem politically appealing to many.

But while Fiderer’s many perpetrators attempted to hasten the GSEs demise, none of them anticipated Fannie’s and Freddie’s dramatic rebirth/recovery to operational life, national productivity, and multi-billion profit, which both compounded initial government errors in 2008 and ushered in a new round of Treasury’s twisted GSE policies in 2012.

Attorney in huge mortgage fraud exonerated

An attorney whose mortgage fraud conviction was touted as the biggest case of mortgage fraud in Nevada history has had his conviction overturned because of government misconduct.

Now David Mark has filed court papers seeking roughly $215,000 in attorney fees and expenses, alleging the record in his case “shrieks of prosecutorial misconduct and fabrication, if not perjury.”

“Mark, a New Orleans lawyer who was living in Las Vegas when the massive scheme unfolded, was found guilty in 2013 of one count of conspiracy to commit bank fraud, mail fraud and wire fraud; two counts of bank fraud and one count mail fraud,” initial reports said. “Mark had provided the FBI in November 2007 with information that led to the indictment of a prominent mortgage industry couple in a fraud scheme that prosecutors alleged cost banks more than $52 million.

“Prosecutors promised Mark immunity if he continued to cooperate against mortgage broker Steven Grimm and his ex-wife, real estate broker Eve Mazzarella,” local media reported.

The Las Vegas Review-Journal has the story.

Mark contended at his trial and in his appeal that he was indicted after federal prosecutors falsely accused him of violating an immunity agreement to testify against the key players in the mortgage fraud scheme. He was alleged to have “feigned memory loss” shortly before the trial.

In July a federal appeals panel tossed out the conviction after concluding that Pro relied on a “scant record” and “inaccurate” information from prosecutors about the immunity breach when he denied a defense motion to dismiss the case against Mark.

“When the government promises not to prosecute a witness in exchange for his cooperation, it cannot then indict the witness unless it proves that he failed to cooperate,” the panel wrote.

After the case was dismissed, Mark’s New Orleans lawyer, Michael Fawer, said Mark was “needlessly” put through the emotional trauma of a trial because of misconduct by prosecutors in the Nevada U.S. attorney’s office.

In court papers last week, Fawer alleged that Assistant U.S. Attorneys Brian Pugh and Sarah Griswold falsely told Pro that the immunity breach occurred during a July 2011 telephone conversation with Mark.

Mark contended he never had the conversation and documents later obtained from the U.S. attorney’s office by the defense showed no record of the call.

Bank of America officials worried about Moynihan vote: WSJ

NEW YORK (Reuters) – Some Bank of America Corp officials told investors they could lose an upcoming shareholder vote on having Brian Moynihan continue as chairman and chief executive of the company, the Wall Street Journal reported on Sunday.

The report, in a story about shareholder discontent with the board, cited “people familiar with the situation” as saying that some bank officials in meetings with investors said a Sept. 22 vote on Moynihan’s two roles “could go either way.”

Aside from the upcoming vote, several large shareholders have pressed for changes in the bank’s board and would like for some of its longest-tenured directors to leave, the newspaper reported.

Read on.