Daily Archives: July 6, 2016

Barclays : Ex-Lehman trader loses bid for $83 million ‘windfall’ bonus – judge

A federal judge on Wednesday said a former star Lehman Brothers Holdings Inc trader was not entitled to an $83 million (£64.4 million) bonus he claimed he was owed following the investment bank’s 2008 collapse, on top of a similar sum that Barclays Plc already paid him.

U.S. District Judge Lorna Schofield in Manhattan also said the former trader Jonathan Hoffman did not deserve $7.7 million that a federal bankruptcy judge had said he could recoup from the estate of Lehman’s brokerage unit, Lehman Brothers Inc, based on an unpaid instalment from his 2007 bonus.

Hoffman’s quest for additional pay is one of the largest lawsuits left in the wind-down of Lehman, whose Sept. 15, 2008 bankruptcy remains the biggest in U.S. history and helped trigger a global financial crisis.

Read on.

Fed’s Tarullo Sees More Changes for Big Banks, Criticizes GOP Capital Proposal

WASHINGTON — The Federal Reserve’s point man on regulation warned that the largest and most complex U.S. banks might have to make further changes to keep pace with the Fed’s postcrisis agenda, and criticized a Republican proposal to give the best-capitalized of those firms an off-ramp to avoid those rules.

“The adaptations will vary with the firm,” Fed governor Daniel Tarullo said at a Wall Street Journal/WSJ Pro event Wednesday, referring to large U.S. banks. “But each firm needs to make a judgment, and I believe is making a judgment, as to how its business model should evolve, given the regulatory requirements, particularly on capital and liquidity, that have been put in place.”

Mr. Tarullo said that the eight U.S. banks considered crucial to the economy have made substantial progress in reducing risk since the financial crisis. But, he noted, the Fed will raise capital requirements by changing its stress tests later this year, will examine more rigorously the banks’ liquidity through separate tests of their funding practices, and will push the firms to address regulators’ concerns about the credibility of their bankruptcy plans.

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Leading Congressional voice on housing reform pulls his name from Trump VP shortlist

Maybe this is why Senator Corker bailed out from the Trump Veep list:

One of the leading voices in Congress on housing finance reform will not be lending his voice to the coming presidential race, at least not in an official capacity, as Sen. Bob Corker, R-Tenn, announced Wednesday that he is removing himself from consideration to serve as the vice presidential candidate under presumptive Republican nominee Donald Trump.

Corker, who authored the Corker-Warner Bill, which failed in the Senate last year and would have seen Fannie Mae and Freddie Mac wound down and replaced, told theWashington Post on Wednesday that he was in “serious consideration” to serve as Trump’s vice president, but said that he is choosing to leave that position to others who are “more suited” to the role.


Corker’s announcement comes just days after a Yahoo Finance report from Bethany McLean alleged that both Corker and Sen. Mark Warner, D-Va., Corker’s co-author on the failed housing finance reform bill, profited from the housing crisis.

As HousingWire’s Kelsey Ramírez recapped earlier this week, Corker and Warner have both reported millions of dollars of income from a fund they were invested in that contained Goldman Sachs products that were designed to bet against the real estate market.

For more on that story, click here.

Andrew Caspersen pleads guilty in big Wall Street fraud case

Former Wall Street executive Andrew Caspersen pleaded guilty Wednesday to charges of securities fraud and wire fraud.

The defense lawyers and prosecutors submitted a letter that they agreed that federal sentencing guidelines would recommend a prison term of 151 to 188 months in this case. But Judge Jed Rakoff said that while Caspersen will take the sentencing guidelines into account, he considers them “bordering on irrational and I will consider them accordingly.”

In a quavering voice, Caspersen said “I defrauded numerous people mostly family and close friends out of more than $38 million.” He said “the fraud was simple.” Caspersen added that he lied to investors by saying that the investment would return an interest rate of 15 to 20 percent.

Read on.

Calif. App. Court Holds Alleged Foreclosure by Wrong Beneficiary Enough for Wrongful Foreclosure, No Tender Required

The Court of Appeals of California, Fourth District, recently held that a homeowner who has been foreclosed on by one with no right to do so — by those allegations alone — sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure.

Citing Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, the Appellate Court also held that, because the plaintiff properly alleged the foreclosure was void and not merely voidable, tender was not required to state a cause of action for quiet title or for cancellation of instruments.

A copy of the opinion is available at:  Link to Opinion.

In 2005, the plaintiff obtained a loan secured by her house.  On April 27, 2009, after the plaintiff defaulted on the loan, the successor in interest to the lender recorded an assignment of the deed of trust to a beneficiary and substituted the trustee.  On the same day, the new trustee recorded a notice of default against the plaintiff, as she was more than $15,000 in arrears. The lender’s successor in interest was listed under the contact information on the notice of default.

In July 2009, the trustee recorded a notice of trustee’s sale.  On Nov. 9, 2009, the lender’s successor in interest recorded an assignment of the same deed of trust to a second beneficiary. That same day, the trustee recorded a trustee’s deed upon sale on behalf of the lender’s successor in interest and the successor acquired the property in exchange for a credit bid.

Read on.

Wells Fargo’s Partial Tax Victory May Spur Billions in Refunds

Wells Fargo & Co. got less than it wanted in a federal tax-refund lawsuit, yet the bank’s partial victory may spur billions of dollars in similar refund claims from companies that have done repeated mergers and acquisitions, tax lawyers say.

The bank had sought refunds — valued at about $350 million as of 2011 — tied mostly to interest on tax bills over decades. The June 29 decision by a federal appeals court in Washington allowed some, but not all, of the claims to stand.

At the same time, the ruling effectively allows companies that have grown through acquisitions to tap certain tax benefits held by the companies they acquired — widening access to refunds based on such interest calculations, according to tax specialists.

Read on.

Former bank president facing life in jail for bank fraud, real estate fraud

The former president and chairman of a failed Oklahoma bank could spend the rest of his life in federal prison, after a jury found him guilty of a series of fraud charges that involved personally approving fraudulent loans for real estate and other investments.

According to the U.S. Attorney’s Office for the Western District of Oklahoma, Paul Doughty, 67, the former president and chairman of First State Bank of Altus, was found guilty last week of 10 charges of bank fraud, conspiracy to commit bank fraud, misapplication of bank funds, making a false bank entry and unauthorized issuance of a bank loan in connection with First State Bank and various loan schemes.

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Colorado AG claims victory in fighting a case against deceptive foreclosures

DENVER BUSINESS JOURNAL – Colorado’s Attorney General says she has won a procedural victory in a case that allows her to go after a firm she says inflated foreclosure costs on Colorado homebuyers.

Attorney General Cynthia Coffman said in a statement today that in the case State vs. The Castle Law Group, the Colorado Supreme Court held that she can introduce critical evidence at trial to demonstrate allegations that the Castle Law Firm used affiliated businesses to artificially inflate foreclosure-related costs.

Coffman alleges that the Tennesse-based Castle Law Group and its principals, in concert with affiliated foreclosure-related businesses, systematically charged inflated and deceptive costs for routine services necessary to complete home foreclosures, while falsely representing that those costs were “actual, reasonable and necessary.”

Read on.

Fifth Third Mortgage now offers mortgage with no downpayment

Fifth Third Mortgage is the latest lender to enter the slowly growing arena of mortgage lenders offering low down mortgages, taking it a step further by announcing — for those who qualify — a zero down payment mortgage program.

Its down payment assistance program offers 3% of the purchase price in down payment assistance, up to $3,600, for low-income borrowers or those purchasing in a designated low-income area and financed through Fifth Third.

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Freddie Mac sells $43.7 million in non-performing loans to non-profit

As part of its ongoing efforts to sell off some of the deeply delinquent mortgages held in its portfolio, Freddie Mac announced recently that it plans to sell nearly $44 million in non-performing loans to a non-profit buyer.

The sale is part of Freddie Mac’s Extended Timeline Pool Offerings, which target minority and women-owned businesses, non-profits, and neighborhood advocacy funds for the purchase of non-performing loans.

In this case, the winning bidder is Community Loan Fund of New Jersey, which agreed to purchase two pools of 189 non-performing loans that total $43.7 million in unpaid principal balance.

Read on.