Daily Archives: February 16, 2016

US Marshals Are Rounding Up People With Late Student Loan Debt

Glad I don’t live in Houston, Texas!

Are you behind on your student loans? Do you live in Houston, Texas? Then hold my hand because I have bad news. U.S. Marshals there are arresting people who are late on their federal college debt.

Fox 26 reported an anonymous U.S. Marshal source who said they’re going to serve 1200 to 1500 warrants to people who are behind their federal student loans.

Then there’s Paul Aker:

He told Fox 26 in a Monday report that feds with automatic weapons recently arrested him for a $1500 student loan from 1987, with allegedly no previous contact about his late bill. They reportedly took to him to court, “surrounded by seven marshals,” with no legal representation, and no rights read to him. And the prosecuting attorney allegedly wasn’t from the government, but a private debt collector.

U.S. Congressman Gene Green also spoke to Fox about this, explaining that private, student loan debt collectors are allowed to contract the feds for work.

Read on.

Here is the video.

Fed’s Kashkari, in first speech, suggests radical Wall St. overhaul

The U.S. Federal Reserve’s newest policymaker and a former point man for the government’s bailout of the financial industry on Tuesday called on lawmakers to take radical action to rein in banks and protect taxpayers.

In his first speech as head of the Minneapolis Fed, Neel Kashkari, a Goldman Sachs executive before he worked at the U.S. Treasury, urged Congress to consider “bold, transformational” rules including the breaking up of the nation’s largest banks to avoid bailouts.

Kashkari indicated that his work at Treasury, where he managed a key part of the banking and auto industry bailouts during the financial crisis of 2007-2009, helped inform his current view.

Read on.

Hillary Clinton unveils sweeping economic agenda, including major housing reforms

Announces $25 billion housing investment program

With the 2016 presidential election inching closer at a seemingly glacial pace, one issue that many of the main candidates have neglected to address is housing and its impact on the country’s economy.

Several now-former candidates for President spoke at last year’s New Hampshire Housing Summit hosted by the J. Ronald Terwilliger Foundation for Housing America’s Families and the Bipartisan Policy Center, but housing doesn’t often get mentioned in the stump speeches of Donald Trump, Ted Cruz, Marco Rubio, Bernie Sanders or Hillary Clinton.

But it appears that is about to change as Clinton, the Democratic hopeful and former Secretary of State, recently announced a sweeping economic agenda that includes some major housing reforms.

Clinton’s plan, which her campaign bills as the “$125 billion Economic Revitalization Initiative,” includes programs designed to “create good-paying jobs, rebuild crumbling infrastructure, and connect housing to opportunity in communities that are being left out and left behind.”

According to Clinton’s campaign, the plan is part of Clinton’s “Breaking Every Barrier Agenda,” which includes “providing every child in America a world-class education, “dismantling the school-to-prison pipeline, “tackling disparities in health and nutrition, and “fighting for environmental justice,” as well as housing reforms.

Part of Clinton’s $125 billion program is a $25 billion housing investment program that aims to “lift more families into sustainable homeownership,” by offering down payment assistance, increasing housing counseling programs, expanding beyond traditional credit scores, building more affordable rental housing, clarifying lending rules and other changes.

Read on.

UBS rates bankers’ behavior in performance review revamp: sources

Swiss bank UBS has begun scoring employees specifically on their behavior, meaning year-end bonuses could be affected by whether they act ethically or are team players, two sources familiar with the policy said on Monday.

UBS, Switzerland’s biggest bank with around 60,000 employees worldwide, began last year giving staff a grade of one to five on their behavior, the criteria for which include integrity and collaboration.

Behavior counts for around 30 percent of employees’ performance reviews, which also reflect the overall quality of work and form the basis of bonus rewards.

For the previous two years, behavior was a factor in the reviews but employees were not given a separate score for it.

Read on.

JP Morgan Pays Off Ambac for Full Amount of RMBS Fraud Claim

 

I once told millions of RT’s Keiser Report viewers JP Morgan was going to pay at least $1 billion dollars to mortgage insurer Ambac for Bear Stearns committing system wide mortgage-back securities fraud and then trying to cover it with accounting tricks. Last night that report came true when JPM settled with Ambac for $995 million over a lawsuit, filed in 2008, asking for mega millions in damages resulting from breach of contract and fraud.

Sadly it’s taken one day and five years after I first reported an explosive story atThe Atlantic, with on the record former Bear Stearns employees detailing how Bear Stearns stole billions from their own clients, to get JP Morgan to pay Ambac the money Bear Stearns owed them. It reads like a move by the bank to avoid a summary judgment decision from Judge Ramos, who could have ruled Bear Stearns committed fraud by lying to Ambac about the quality of the loans in the RMBS and also lying about how Bear Stearns ran it’s own due dilly operations. The fraud claim would have tripled the damages instead of just a breach of contract claim that usually only awards actually damages.

On July 14, 2015 in front of New York state Judge Ramos, in Manhattan Supreme Court, Ambac’s attorney Erik Haas argued during a partial summary judgment motion on the issue of justifiable reliance. The bank’s big law lawyers at Sullivan Cromwell had moved for Judge Ramos to rule before the case got in front of a jury on JPM/Bear Stearns’s fraudulent misrepresentation. The central argument is: was Ambac fraudulently induced to insure billions of residential mortgage backed securities packaged and sold by Bear Stearns. Team JPM thought Ramos was going to rule in their favor and if you were listening to the beginning of the hearing Judge Ramos sure sounded like he didn’t think the fraud claim should go to a jury. But during oral argument attorney Eric Haas appears to have convinced Judge Ramos to see why Ambac thought they had the evidence to prove Bear Stearns/JP Morgan’s culpability in the fraud and felt so good about their legal argument winning that they asked Judge Ramos to rule right then from the bench.

Read more from Teri Buhl’s website. Click here.

New York launches undercover program to expose discrimination in real estate

The state of New York is set to launch a new program that will use undercover “testers” posing as prospective homebuyers or renters to “root out” housing discrimination in the state, New York Governor Andrew Cuomo announced over the weekend.

According to Cuomo, New York will establish the “Fair Housing Enforcement Program,” which will be tasked with uncovering discrimination in real estate.

Read on.

Big banks are fleeing the mortgage market

Marketwatch:

When it comes to residential mortgages, big banks are waving the white flag.

Banks originated 74% of all mortgages in 2007, but their share fell to 52% in 2014, the most recent data available from the Mortgage Bankers Association. And it could go even lower.

But even at these levels, the big bank backtrack is reshaping a lending landscape that’s already undergone seismic shifts since the housing bubble burst.
While there’s widespread agreement that banks should have been reined in — and perhaps punished — after playing a major role in the housing bubble that helped tank the economy, the past few years have been tough for banks’ mortgage businesses.

They now face a regulatory environment so strict that many are afraid to lend, even to customers with the most pristine credit. They’re still paying up for misdeeds done during the bubble. There’s essentially no private bond market to whom to sell mortgages.

And fighting those battles on behalf of their least-profitable divisions means residential lending just isn’t worth it for many banks.

“We can’t make money in the business,” BankUnited CEO John Kanas said when he announced a mortgage retreat on a January earnings call. “We realized that this was the lowest-margin, most volatile business we had and we decided that we should exit.”

Of the top 10 originators in 2015, banks lent 28.6% of all mortgages, according to data from Inside Mortgage Finance. That’s about half their share in 2012, when banks among the top 10 originators accounted for 54.4% of all mortgages.