Daily Archives: February 5, 2016

Wells Fargo reaches $16.2 million class-action settlement in Owings Mills title company case

Wells Fargo & Co. has reached a $16.2 million class-action settlement over a kickback scheme with shuttered Owings Mills title company Genuine Title.

Attorneys filed a motion in federal court Thursday afternoon to approve the settlement. It covers more than 9,000 customers.

Read on.

HSBC reaches $601M settlement over charges of ‘abusive mortgage practices’

HSBC agreed to a $601 million settlement with a series of federal agencies and nearly every state over charges that the bank engaged in mortgage origination, servicing and foreclosure abuses.

The massive settlement with HSBC was jointly announced Friday by the Department of Justice, the Department of Housing and Urban Development, the Consumer Financial Protection Bureau, 49 states and the District of Columbia.

As part of that settlement, HSBC will pay a total of $470 million in relief to consumers and payments to federal and state parties, and will be bound to mortgage servicing standards and be subject to independent monitoring of its compliance with the agreement, the DOJ said in a statement.

“This agreement is the result of a coordinated effort between federal and state partners to hold HSBC accountable for abusive mortgage practices,” said Acting Associate Attorney General Stuart Delery.

“This agreement provides for $370 million in creditable consumer relief to benefit homeowners across the country and requires HSBC to reform their servicing standards,” Delery added. “The Department of Justice remains committed to rooting out financial fraud and holding bad actors accountable for their actions.”

In a separate, but related, announcement, the Federal Reserve announced that HSBC will pay $131 million to settle similar claims.

Read on.

Sen. Sanders blocked vote to confirm Obama nominee who worked to deregulate Credit Default Swaps and currently is Clinton’s campaign’s chief financial officer

Remember Gary Gensler? Let’s go back a few years.

During Gensler’s time at the Treasury, Gensler had pushed hard for Wall Street deregulation and even helped write the Commodity Futures Modernization Act or CFMA.

Gensler later helped write derivatives language in the Dodd-Frank financial reform bill. More from The Intercept:

When he was at the Treasury Department in the Clinton administration, Gensler worked to ban derivatives regulation. But after the crisis, he helped write stronger derivatives language in the Dodd-Frank financial reform bill, ensuring that they would be transparently traded through central clearinghouses — giving everyone a window into their risk and scope.

He took extreme action to preserve those rules, beating back lobbyists and even fellow regulators. Gensler’s former friends on Wall Street felt betrayed; his name became “like a curse word,” according to former SEC Commissioner Daniel Gallagher.

Prior to being the Assistant of U.S. Treasury under the Clinton Administration, Gensler worked for Goldman Sachs for 18 years.

Which is why Sanders blocked Gensler’s nomination for the Commodity Futures Trading Commission. Sanders was interviewed on Democracynow in 2009:

We speak with Independent Senator Bernie Sanders of Vermont, who is attempting to block President Obama’s nominee to head the Commodity Futures Trading Commission, Gary Gensler, a former Goldman Sachs employee. “Gensler worked with Sen. Phil Gramm and Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of A.I.G. and has resulted in the largest taxpayer bailout in U.S. history,” Sanders said. [includes rush transcript]

On a side note: Sanders voted no for the Timothy Geithner’s nomination for U.S. Treasury head.

Hillary Clinton Won’t Say If She’ll Release Transcripts of Goldman Sachs Speeches

By Lee Fang

The Intercept:

During the Democratic presidential debate Thursday evening, MSNBC moderator Chuck Todd picked a question offered by a viewer and pointedly asked Hillary Clinton if she would release the transcripts of her paid speeches to giant investment bank Goldman Sachs. Todd then broadened the question, asking: “Are you willing to release the transcripts of all your paid speeches?”

It was the second time Clinton has been asked if she would release transcripts of the paid speeches she gave behind closed doors. When I asked her in Manchester, New Hampshire two weeks ago, Clinton simply laughed and turned away.

Asked this time on network television, she said, “I will look into it. I don’t know the status, but I will certainly look into it.”

Clinton went on to say that she made money from paid speeches by talking “about issues that had to do with world affairs,” suggesting she gave a boilerplate talk. But according to accounts offered by several attendees of one of the Goldman Sachs speeches, Clinton reassured the crowd, telling them that banker-bashing was unproductive and foolish.

Wall Street Billionaire Appears to Be Genuinely Puzzled by Bernie Sanders’ Populist Crusade Against the Richest 1%

How is that happening, why is that happening?” wonders Stephen A. Schwarzmann.



Multi-billionaire Stephen A. Schwarzman says he’s puzzled by the amount of discontent apparently felt by other Americans these days.  

Steve Schwarzman is a bland-looking, somewhat paunchy, not unattractive, balding man of benign demeanor who will be 69 on Valentine’s Day 2016. He’s worth $12 billion, give or take a few hundred million. He is a poster boy for Wall Street success and self-esteem and cluelessness. He’s the co-founder, chairman, and CEO of the Blackstone Group, one of the world’s largest financial firms, specializing in private equity, hedge funds, and mergers. He’s a Republican, and his life has been going pretty well for him lately, as it has for decades. 

But he freely admits (or pretends to admit) that he doesn’t understand why the rest of America isn’t just as content as he is. On January 21, at the World Economic Forum in Davos, Switzerland, Schwarzman spoke to a gathering of his peers who run the world about his perception of the US presidential election campaign:

“I find the whole thing astonishing and what’s remarkable is the amount of anger whether it’s on the Republican side or the Democratic side…. Bernie Sanders, to me, is almost more stunning than some of what’s going on in the Republican side. How is that happening, why is that happening?” 

One clue to “why is that happening,” a clue Schwarzman presumably noticed last October, wasthe $39 million fine Schwarzman’s Blackstone Group advisors had to pay for bilking customers. Blackstone entered into a “consent agreement” with the US Securities and Exchange Commission (SEC) finding that “it breached its fiduciary duty” to its customers. The consent agreement, admitting no guilt, is a tactic often used by corporate shysters to cut their losses when caught with their hands in other people’s pockets. Blackstone’s “cooperation” with the SEC was cited as a reason the SEC fined the company only $10 million. Or, as the SEC press release put it:

“Blackstone consented to the entry of the SEC’s order…. Without admitting or denying the findings, Blackstone agreed to cease and desist from further violations, to disgorge $26.2 million of ill-gotten gains plus prejudgment interest of $2.6 million, and to pay a $10 million civil penalty….  The settlement reflects Blackstone’s remedial acts and its voluntary and prompt cooperation with the Division of Enforcement’s investigation.” [Note: with revenue of $7.484 billion, Blackstone’s $10 million fine represents 10/7484th – or .1336% – of its income.]  

East Orange Calls for Changes to Foreclosure Practices

“It’s sad to know that you can’t enjoy something you worked so hard for.”

Martha Nelson bought her East Orange home in 2004 — a rambling three-story on Oraton Parkway.

When the Great Recession hit, she lost her job, property values tanked and she now owes the bank twice what her dream home’s worth. And she can’t get an affordable mortgage refinance, even though it’s an FHA — Federal Housing Administration-backed loan.

“If it’s a private loan, they can do much more for me. But with the loan that I have, there’s nothing much than can be done,” Nelson said.

“In East Orange we have many examples, many examples of hard-working families fighting to preserve and maintain their homes,” said East Orange Mayor Lester Taylor.

At a news conference, Taylor talked about blighted neighborhoods like Nelson’s where two houses down the street are in foreclosure and a couple others look completely disheveled and abandoned. He blames corporate greed and lax government.

“For too long, Wall Street speculators are becoming major landlords, in communities of color in particular, like East Orange. Government agencies such as Fannie Mae, HUD, Freddie Mac have allowed private interests to trump the interests of working class families in our communities,” Taylor said.

Read on.

Flint water crisis now impacts mortgage lending

From the article:

As a condition for making a mortgage against a property, lenders often require that a home meet certain minimum standards of livability, including potable water. Government agencies, which back most U.S. home loans, also have such requirements.

“As we learn more and as this situation evolves, we will work with lenders to determine what policy changes, if any, may be warranted,” Fannie Mae said in a statement. “We feel for the community impacted by the unfolding issues related to Flint, Michigan-area water quality.”

“This isn’t a question of the lenders arbitrarily choosing not to do loans in Flint,” said David Stevens, president of the Mortgage Bankers Association, a trade group. “It’s a question of whether lenders are allowed to originate those loans based on government requirements.”