Daily Archives: July 11, 2016

Trump ripped a page from the campaign playbook of Richard Nixon, who successfully ran for the presidency in 1968 as the “law and order” candidate

“We must maintain law and order at the highest level, or we will cease to have a country, 100 percent…Or we will cease to have a country.”–Donald Trump

Yup, Trump using Nixonian phrase “silent majority” to describe his supporters…

American Radio Works:

On November 5, Democrats would learn just how much they had lost touch with voters.

Meanwhile, Richard Nixon was anything but out of touch. The weeks and months he spent stumping for Goldwater and other GOP contenders gave him an up-close view of something lost on the liberals: White Americans were getting tired of them. Rick Perlstein says Nixon could see that voters “were angry at liberalism, angry at race riots in the city, and angry at violence on campuses.”

In a world that seemed to be falling apart at the seams, Perlstein says, “Richard Nixon reestablished himself as a figure of destiny by speaking to people’s craving for order.”

Accepting the Republican nomination for president at the convention in Miami, Nixon spoke to what he called “the great majority of Americans, the forgotten Americans, the non-shouters, the non-demonstrators.” The first civil right in America, Nixon said, was the right to be free from the violence of civil unrest.

During his campaign, Nixon repeatedly called for “law and order.” He pledged that under his administration, “We shall reestablish freedom from fear in America so that America can take the lead of reestablishing freedom from fear in the world.”


And interesting story of the connection with Roger Ailes and Richard Nixon:

A central architect of Nixon’s television campaign was a young producer for the Mike Douglas Show, Roger Ailes. Nixon met Ailes when he was a guest on the show in 1967. Sitting in a make-up chair, Nixon said it was silly to have to go on TV to get elected president. According to Rick Perlstein, Ailes’ response was a surprise. “Mr. Nixon,” Ailes said, “if you think this is silly you’ll never become president of the United States.” Nixon liked the young prodigy and put Ailes on the payroll. (Ailes later played a crucial role in the campaigns of Ronald Reagan and George H.W. Bush, and went on to become the head of Fox News.)

Nixon’s media team scrutinized their candidate’s earlier television appearances and agreed Nixon came off best in more informal settings, places where he could speak extemporaneously. So they began to stage artificial town hall meetings – called “Man in the Arena” – where Nixon would take questions from a handpicked crowd of supporters. The idea was to destroy the image of Nixon as a loser by showing him as a fighter, someone who could survive tough questions on the public stage.

In one exchange a black man asks Nixon whether the candidate’s call for “law and order” has a different meaning for black Americans demanding equality than for white bigots who have “slaughtered, murdered, maimed” black people all over the South. Nixon defends his use of the term. “I don’t go along with people that say law and order is a code word for racism,” Nixon says. Minorities should be especially concerned about law and order because, he says, “if you have mob rule, eventually the majority’s mob will rule and the minority will have no rights at all.”

Nixon concludes with one of his stock lines, “Law and order is in the interest of all Americans. Let’s just make sure that our laws deserve respect; then, they will be respected by all Americans.” The crowd erupts in applause.

When the neighborhood is owned by billion-dollar real estate investment companies

Many of the single-family homes in the Piedmont Park neighborhood of Apopka, Florida, used to be owned by families — the Vargases and the Townes, the Pierces and the Riddles. Now, they’re owned by Blackstone, American Homes 4 Rent and Colony Starwood Homes, companies associated with big real estate investment firms.

And the occupants are tenants, not owners.

In the decade since the housing boom deflated into a bust, financial firms recognized an investment opportunity in hard-hit areas like this Orlando suburb. Single-family homes lost to foreclosure could be bought cheaply and transformed into rent-generating income streams.

The corporate purchases have spread through Piedmont Park and surrounding neighborhoods, where the percentage of renters rose from a bit over 10 percent to more than 35 percent within a decade. Piedmont Park homeowners complain that the result is more transient neighbors, less engagement at homeowners’ meetings and difficulties reaching absentee corporate landlords.

Can a mortgage lender claim it’s part of Indian tribe, offer home loans at 355 percent? Money Matters


Q: I heard a commercial for a bank offering mortgages but I was a little thrown off when the ad said their interest rates are too low to disclose on the radio. The phone number for the company is 877-860-CASH. What’s up with this company?
D.S., Euclid

A: The name of the company is CashCall Inc./CashCall Mortgage. If that doesn’t set off alarms for you right out of the gate, then I don’t know what would.

First, if you look up the company through the Better Business Bureau, you’ll see it has a C-minus rating, primarily because it’s been sued or faced legal action from various state agencies in California, Florida, New York, Pennsylvania, Maryland, Colorado, Minnesota and a bunch of others.

Among the cases you’ll find:

In August 2013, New York’s attorney general filed suit against CashCall Inc. for violating the state’s usury and licensed lender laws. “The companies charged annual rates of interest from 89 percent to more than 355 percent to thousands of New York consumers,” the BBB says on its web site. “These interest rates far exceed the maximum rate allowed under New York law, which is limited to 16 percent for most lenders not licensed by the state.”

And in December 2013, the Consumer Financial Protection Bureau filed suit against CashCall Inc., saying the company issued loans to consumers but claimed it didn’t have to obey consumer protection laws. The CFPB said CashCall said the funding for the loans was provided by Western Sky, which claimed to be part of an Indian tribe, and that that status would “void any licensing requirements and other consumer protections.”

“The CFPB alleges however, that Western Sky was not in fact part of an Indian Tribe and was actually just a front to allow CashCall to violate state and federal laws,” according to the list of government actions against CashCall. “The CFPB suit seeks to order CashCall to forfeit these loans and award civil money penalties.”

In both of these cases, the actions are pending.

And last year, the company settled with the Michigan Department of Insurance and Financial Services. The company was accused of servicing and collecting loans with interest rates that ranged from 89 percent to 169 percent. CashCall agreed to cease and desist and establish a $2.2 million settlement fund to be distributed to all Michigan consumers with Western Sky loans.

Other consumer complaints against CashCall say the company charged late fees on payments that weren’t late and took money out of customers’ checking accounts without authorization. (It apparently requires direct debit. Shocker.)

In one complaint, a customer said he borrowed $10,000 from CashCall 7-1/2 years ago and had been paying $333 a month. He checked his remaining balance and found it was $9,827.33. He had paid out $29,637 on a $10,000 loan and was told he still owed $9,827. So he had paid only $123 in principal in seven years?

As far as the company saying it couldn’t disclose its interest rate, that should be alarming. It’s also strange because the company states today’s interest rate pretty prominently at the top of its home page. Today, it’s 3.38 percent, with no closing costs. (Another red flag.)

In any case, that’s less than the national average, according to Freddie Mac. (Another red flag.) And it’s in line with local banks that aren’t shrouded in so much mystery and don’t have such long records of complaints alleging egregious behavior. And the local banks are overseen by many layers of regulators, and they don’t claim to be insulated from government regulation because of alliance with any Indian tribes.

Finally, I’ll be honest; I’m not completely sure whether the company is offering mortgage loans, or unsecured loans without the home as collateral. In my research, I found references to both. Maybe they actually offer both. It doesn’t really matter.

I wouldn’t take out a loan from a business with this many question marks.

Corker, Warner, bipartisan Senate coalition to FHFA: Leave GSE reform to us


Over the last few months, several groups, including 32 congressional Democrats, attempted to push the Federal Housing Finance Agency to allow Fannie Mae andFreddie Mac to rebuild their dwindling capital base.

The letter sent by the congressional Democrats asked FHFA Director Mel Watt to use the supposed authority granted to him by the Housing and Economy Recovery Act of 2008 to let Fannie and Freddie hold capital instead of funneling it to the Department of the Treasury, as is stipulated by the Preferred Stock Purchase Agreements that went into effect when the government took Fannie and Freddie.


In the wake of that letter, a group of the largest trade organizations in housingdelivered a strong rebuke to the Democrats’ efforts, as the Mortgage Bankers AssociationNational Association of RealtorsAmerican Bankers AssociationNational Association of Home Builders, and the National Housing Conference said that their view is that “comprehensive reform to the secondary housing finance system must come through Congress,” rather than from Watt and the FHFA.

Thus far, the FHFA has not responded directly to those efforts, but Watt did take part in the Financial Stability Oversight Council’s annual report, which stated that it believes that Congress needs to take the lead on housing finance reform to fully stabilize the country’s housing finance system.


But just how far down the road is housing finance reform? The conclusion of the senators’ letter gives insight into the lack of inertia for GSE reform in the current Congress.

Spoiler alert: Don’t hold your breath for GSE reform this year.

“In closing, we are hopeful that housing finance reform will be on the agenda for the next Congress and Administration and look forward to working with you on that effort,” the senators conclude. “Until that time, we strongly encourage you to focus your efforts on steps that would help, not hurt, housing finance reform legislation.”

To read the senators’ full letter, click here.


Britain’s Finance Minister Is on Wall Street Asking for Money

George Osborne wants big investors to stick with Britain despite last month’s vote to leave the EU.

British finance minister George Osborne will meet some of Wall Street’s biggest investors in New York on Monday to urge them to stick with Britain despite last month’s vote to leave the European Union, his office said.

The vote for Brexit has pushed the pound to 31-year lows against the dollar and many investors have warned that Britain—until this month the world’s fifth-largest economy—faces years of uncertainty over everything from trade to investment.

Read on.

1st Cir. Rejects Borrower’s Attempt to Permanently Enjoin Foreclosure Due to Cancellation of Prior Foreclosure

The U.S. Court of Appeals for the First Circuit recently held that the cancellation of a foreclosure sale prohibits a borrower from obtaining a permanent injunction to bar a foreclosure, as they would not suffer irreparable harm.

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

In 2005, the plaintiff borrowers obtained a refinance mortgage loan on their home. The borrowers defaulted on their mortgage in 2007 and again in 2009. The loan was modified but the borrowers still had not made a mortgage payment since 2009.  Between 2011 and 2013, the borrowers negotiated to again modify the loan. The negotiations were unsuccessful and a foreclosure sale was scheduled for September 2013.

The borrowers then filed an action in state court and obtained a preliminary injunction barring the foreclosure sale from moving forward. The foreclosure proceedings were subsequently cancelled, but the borrowers’ lawsuit remained pending.

Read on.

Eurozone Insists Bank Bailout Rules Won’t Change for Italy

BRUSSELS — New rules governing the rescue of imperiled banks in the 19-country eurozone that seek to protect taxpayers won’t be fudged, officials from the single currency bloc insisted Monday amid growing concern about some of Italy’s lenders.

Worries over the financial health of Italy’s banks have grown more acute since the June 23 referendum result in Britain and the country’s premier, Matteo Renzi, is looking for a way to rescue them from a pile of bad loans that aren’t being repaid.

Jeroen Dijsselbloem, the eurozone’s top official, conceded that Italy’s banks have problems with so-called non-performing loans, but that dealing with them through a fudge of newly created rules was not on the cards.

“It needs to be dealt with. It will have to be dealt with gradually,” he said at a meeting of the eurozone’s 19 finance ministers. “There will be no big solutions … It’s not an acute crisis so that also gives us some time to sort things out.”

Dijsselbloem said it’s important that the eurozone respects what it’s agreed “otherwise everything will be questioned in Europe, and there are a lot of questions in Europe already so we don’t need any more questions.”

Read on.

Trump: ‘I Am The Law-and-Order Candidate,’ Clinton Is ‘Weak’


I am a Law and Order fan, but Trump is no Jack McCoy!


The “hostility” toward U.S. law enforcement must end now, Donald Trump said at a campaign stop in Virginia Beach, Va.

  • Says he will ensure “safe” homes, communities and schools
    • Will protect citizens “without prejudice”
    • After labeling himself “law and order” presidential candidate, calls self “candidate of compassion,” as well
  • Hillary Clinton’s e-mail scandal shows she is “either a liar or grossly incompetent,” Trump says
    • “It’s probably both”
    • “She’s been part of this rigged system for a long time. Perhaps it’s easy for politicians to lose touch with reality when they’re being paid millions of dollars to read speeches on a telepromter to Wall Street executives,” Trump says
  • Of veterans, Trump says, “you defend America and America will defend you”
    • “That promise has been broken by our politicians,” Trump says
    • Says he will launch an investigation into the Veterans Affairs Dept. in Jan. 2017

In other news, Sanders will endorse Clinton. He will be campaigning with her tomorrow in New Hampshire. The DNC platform does contain more than 80% of Sanders’ platform of issue from his campaign as I followed the DNC platform draft on the DNC website. We all have to see how the Clinton-Sanders duo do in their first joint rally.


Top U.S. officials rejected push to prosecute HSBC – lawmakers’ report

Here we go again…

Senior U.S. Department of Justice officials overruled internal recommendations to prosecute global bank HSBC Holdings Plc for money laundering violations because of concerns about the stability of the financial system, a congressional report released on Monday said.

In 2013, the Financial Services Committee of the U.S. House of Representatives, led by Republican Congressman Jeb Hensarling of Texas, began investigating the Justice Department’s November 2012 decision to enter into a $1.92 billion (£1.4 billion) settlement agreement with HSBC.

The report, which relies on internal records from the Department of the U.S Treasury, said then-U.S. Attorney General Eric Holder “misled” Congress about the Justice Department’s reasoning for declining to prosecute.

He and other top officials decided against criminal charges for London-based HSBC over the recommendations of prosecutors as they had concerns about financial stability, the report said.

Read on.

U.S. bank regulator toughens commercial real estate oversight

Credit risks have risen in U.S. commercial real estate as lenders compete more fiercely in a low rate environment, a federal banking regulator said on Monday, adding that it was stepping up its scrutiny of the sector.

The Office of the Comptroller of the Currency (OCC) said in its semiannual risk report that while the financial performance of lenders improved in 2015 compared to a year earlier, credit risks were higher across the industry.

The U.S. Federal Reserve has kept interest rates low for more than seven years to help the U.S. economy recover from the 2008 financial crisis. But that policy is also weighing on bank profits and pushing lenders to compete more fiercely for worthy borrowers. That competitive pressure is increasing risk, the OCC said.

“It’s at this stage of the cycle that we also see strong loan growth combined with easing underwriting to result in increased credit risk,” Comptroller of the Currency Thomas Curry said in prepared remarks.

The agency has escalated its oversight of commercial real estate risk from ordinary monitoring to “additional emphasis.” It also flagged risks in commercial and industrial loans, and said concerns remain about indirect auto lending and leveraged lending, which are both issues the OCC has flagged in the past.

Read on.