Daily Archives: September 25, 2015

The Inside Story of the CFPB’s Battle Over Auto Lending

WASHINGTON — The Consumer Financial Protection Bureau has struggled internally with how to end potential discrimination in auto lending, including debating whether it should cite a large lender in the hope of effectively ending the ability of partnering dealers to mark up loans with all lenders.

In a series of internal documents reviewed by American Banker, agency officials wrestle with the practice of dealer markup, in which the dealership typically keeps the difference between the rate set by the lender and the one agreed to by the borrower as its compensation. On multiple occasions, CFPB officials suggested to forgo rulemaking and instead use a few high-profile enforcement actions against large auto lenders to do away with dealer discretion, thereby significantly curbing potential discrimination.

“The purpose of this meeting is to continue our discussion around a market-tipping settlement that would resolve the discriminatory disparities caused by dealer markup by eliminating markup at many major auto lenders,” said a memo from officials in preparation for a briefing with CFPB Director Richard Cordray and 19 senior officials on May 20, 2013.

Such a plan of attack lends support to what the industry has long feared: that the CFPB’s efforts to cite auto lenders for unintentional discrimination was really a means to control competitive price negotiations between lenders and dealers.

Auto lenders and dealerships argue that the CFPB’s acute focus on dealer markup, a common facet in the industry, won’t end discrimination and will likely raise overall auto financing costs for consumers.

Read on.

11 things we learned investigating how the government sells mortgages to investors

1. Over 98,000 “bad” mortgages have been sold to investors through a government program since 2010.

2. The Department of Housing and Urban Development (HUD) sells mortgages to investors at a steep discount — at times as little as 41 percent of the mortgages’ collective value.

3. Homeowners typically aren’t informed when their mortgages are sold. This prevents them from advocating for better terms, which they’re entitled to under Federal Housing Administration protection.

4. Wall Street investors pay only two-thirds* of the full mortgage value when they buy mortgages from the government (*median price).

5. Homeowners aren’t so lucky: they must pay about 124 percent* of the property value to keep their homes(*median price).

Read on.

Video of Seattle Committee hearing re: Mortgage foreclosure fraud audit.. MERS

People testified on this issue beginning at the following minutes:
  • 20:01 – Karen Pooley
  • 22:00 Shelley Erickson
  • 24:40 Christopher King
  • 27:00 Richard Jones
  • 29:00 Craig Kendall (i think that’s his name)
  • 35:00 Susan Harmon
  • 36:00 Josh Ferris
  • 40:00
  • 51:00 MERS Attorney Fred Bernside
  • 55:22 DAniel ?
  • 58:00 Michelle Darnell
  • 1:48:00 HEARING

You can view the video of the hearing here.

JPMorgan reaped $150 million dividend from Henry Bath before sale: filing

JPMorgan Chase & Co reaped a $150 million dividend from its metals storage business Henry Bath & Son before selling its physical commodities business last October, as the firm reported its first loss in over a decade, a filing on Thursday showed.

A review of filings to the UK business registry revealed the payout to the Wall Street bank and the loss were the first since 2002 when Henry Bath was held by Enron, the failed energy trader and one of its best-known owners in its 200-year history.

JPMorgan officials were not immediately available for comment on the matter.

Read on.

Former Lehman CEO Dick Fuld breaks auction record with ranch sale

Living the thug life….

The sale of a luxury ranch owned by former Lehman Brothers Chief Executive Officer Dick Fuld just set a new record for the most expensive property ever sold via auction, according to a report from CNBC.

Fuld’s ranch, a 71-acre spread called Big Wood River Estate, has 11 bedrooms between three houses and comes with 2,100 feet of riverfront land.  The ranch is located in Sun Valley, Idaho.

The ranch, which was profiled in the September issue ofHousingWire Magazine by our own Sarah Wheeler, was expected to fetch $30 million and $50 million at auction.

According to a new report from CNBC, Fuld’s estate sold for an undisclosed price to an undisclosed buyer, but the company that facilitated the auction said that the sale price for Fuld’s ranch broke the previous record for the most expensive residential property sold at auction, which was $19.25 million.

From CNBC:

Concierge Auctions said six bidders participated in the auction. The buyer is believed to be from the Pacific Northwest.

(Picture above courtesy of Concierge Auctions)

Source: CNBC