Ocwen Financial is in the midst of what it already said would be a tough year for the company, as the company adjusts its business structure away from such a heavy focus on mortgage servicing towards an increased focus on mortgage origination.
Earlier this year, Ocwen said that it expected to post a loss in 2016, and the company’s first quarter results backed up that statement, as the company posted a net loss of$111.2 million in the first three months of 2016.
To counteract the expected losses from the business shift, Ocwen said that it is undertaking several cost-cutting efforts throughout 2016.
Included in those cost-cutting efforts is a reduction in the company’s staff, as HousingWire can report that Ocwen recently laid off 120 employees from various office locations throughout the U.S.
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A BORROWER TAKING OUT a $500 loan could still pay over 300 percent in annual interest, despite new rules designed to crack down on predatory small-dollar lending out Thursday from the Consumer Financial Protection Bureau (CFPB).
The proposed consumer protections for payday loans, auto title loans, and high-cost installment loans focus on making the lenders document borrowers’ incomes and expenses to confirm that they have the ability to make their payments and still maintain basic living expenses. Payday lenders currently do minimal financial checks before issuing loans.
That could prevent deceptive practices. But actually enforcing underwriting standards is more difficult than enforcing specific product safety rules.
One more enforceable provision, limiting monthly payments on some loans to no more than 5 percent of a borrower’s paycheck, was considered by the CFPB but rejected.
Two former Deutsche Bank AG traders face criminal charges for allegedly trying to manipulate the Libor benchmark interest rate, including the first U.S. trader to be charged in connection with the yearslong probe.
Matthew Connolly, 51 years old, former head of the bank’s pool trading desk in New York, and Gavin Campbell Black, 46, a former derivatives trader in London, were accused of trying to rig the London interbank offered rate, an interest-rate benchmark, between 2005 and 2011 to benefit the bank’s trading positions, according to an indictment unsealed on Thursday.
Mr. Connolly, who was taken into custody on Thursday, according to the Justice Department, is the first U.S. trader to be charged in the case.
Deutsche Bank declined to comment.
A third former Deutsche Bank trader, Michael Curtler, who supervised Mr. Black, pleaded guilty in October 2015. The bank paid $2.5 billion to resolve related criminal and civil charges against it in April 2015.
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Could lead to lawsuits against banks
Jumbo loans have become a new favorite among banks as companies seek to minimize risk with the high dollar mortgages, according to an article by Rachel Ensign, Paul Overberg and Annamaria Andriotis for The Wall Street Journal. The problem? Minorities are losing out.
Jumbo loans, or loans above 417,000 in most markets, are becoming a greater focus for banks, according to the article. Jumbo loans at JPMorgan Chase, for example, were at 22.5% in 2014, up from 9.1% in 2007. Consequently, its mortgages to blacks fell from 8.2% to 3.8%, and to Hispanics from 15.1% to 8.7%.
From the article:
These [Jumbo] loans predominantly go to white and Asian borrowers, the analysis showed. In 2014, 3.0% of the biggest banks’ jumbo borrowers were Hispanic and 1.3% were black. As the 10 big banks issued proportionally more jumbos, they collectively decreased their share of all home loans to blacks and Hispanics. Their proportion of lending to those minorities also fell in non-jumbo mortgages alone, though not by as much.
Among all approved mortgage applicants from the 10 banks, 5.3% were black in 2014, down from 7.8% in 2007; 7.4% were Hispanic, down from 10.6%.
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The ghosts of Countrywide past just struck again, as the Federal Deposit Insurance Corporation announced Thursday that eight major financial institutions will pay $190 million total to settle a series of lawsuits tied to toxic Countrywide mortgage bonds that subsequently led to the failure of five banks during the housing crisis.
According to the announcement from the FDIC, Barclays Capital; BNP Paribas Securities Corporation; Credit Suisse Securities; Deutsche Bank Securities;Edward D. Jones & Co.; Goldman Sachs; RBS Securities; and UBS Securitieswill pay $190 million to settle claims that the banks made misrepresentations in the offering documents for 21 Countrywide residential mortgage-backed securities purchased by the five failed banks.
|Bank of America in Columbia, SC. Credit: Billy Hathorn, CC BY-SA 3.0
In a recent 3-0 ruling that has left many shocked and scratching their heads, a federal appeals court has reversed
a $1.27 billion jury verdict against Bank of America (BofA).
The federal jury took only three hours
in 2013 to find BofA guilty of civil fraud for deliberately selling defective mortgages through their Countrywide unit to Fannie Mae and Freddie Mac and marked one of the few times the Department of Justice has actually proceeded to trial in an attempt to hold large banks accountable for defrauding the U.S. government and the American public.
In the trial it was proven that employees of Countrywide knowingly and intentionally sold the toxic mortgages despite being warned repeatedly by Countrywide whistleblower Edward O’Donnell and other employees that the mortgages violated its contract with Fannie and Freddie.