Ending offshoring: Nationstar moving all customer service operations back to U.S.

Over the last several years, many of the top mortgage servicing companies (both banks and nonbanks alike) moved some of their customer service operations overseas as part of an effort to cut costs and improve profitability.

But the practice, known as offshoring, proved somewhat problematic for the servicers, as customers frequently complained of issues when dealing with offshore customer service representatives.

Here’s how Fitch Ratings described the issue back in 2014:

“Less experienced offshore staff can lead to ineffective communication with borrowers,” Crowe said. “Even with effective scripting, an offshore call center agent typically does not have the same frame of reference or local knowledge as a U.S. based call center agent. Fitch has found that reliance on scripting works best when calls are predictable and do not deviate from the norm.”

But even with effective scripting, the potential for communication issues is still significant.

Not to mention the regulatory risk that servicers take when using offshore operations, as evidenced by Ocwen Financial being fined last year for using unlicensed offshore operations.

While offshoring has its benefits, one servicer is choosing to listen to its customers and move its customer service operations back onshore.

Nationstar Mortgage (soon to be Mr. Cooper) announced Wednesday that it is bringing its customer service operations back to the U.S.
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Former JPMorgan trader Iksil links Dimon to ‘London Whale’ losses

Reuters:

Bruno Iksil, the former JPMorgan Chase & Co (JPM.N) trader at the center of the “London Whale” trading scandal, has accused the Wall Street bank’s Chief Executive James Dimon of laying the ground for the $6.2 billion loss.

In an account on his website, Iksil, a French national who traded credit derivatives for JPMorgan in London, also blamed senior executives at the bank. (bit.ly/2sjf2WS):

1. What is the purpose of this website?

The “London Whale” case is a huge trading scandal that occurred at the CIO of the US bank Jp Morgan in second quarter of 2012. It is not pictured correctly by any public report so far. There are topics that investors, employees, and the public in general should be aware of :

1. The bank Jp Morgan had long ordered the controversial trades that would cause the scandal in 2012. Whatever the loss that burdened its CIO unit, irrespective of the “element of surprise” that the bank may allege, the firm as a whole made much, much more money through the event. The senior executives knew their actions were border line though since 2010 at the latest. Some events in 2009 and early 2010 are important clues to that: the VAR reports changed in September 2009, Bill Winters was fired abruptly next, a “cushion/reserve” of $300 million was ignored by CFO in December 2009, the book had to be “killed” on the follow in January 2010, Dimon and Cavanagh came to visit CIO London but not Iksil in early March 2010, new liquidity reserve rules were enacted in late March 2010 but were next not enforced, Cavanagh the then CFO suddenly changed cap in June 2010, the CFO of CIO left 4 months later for undisclosed reasons in November 2010, right when Iksil got a “chocolate medal” promotion. Regulators sent warning letters precisely then….
2. The senior executives chose indeed “Iksil” to work as a “screen” for them in late 2010. It was a complete setup manufactured around RWA projective but pointless modeled reductions and misleading risk reports about stress test limits breaches. The executives promoted “Iksil” without changing his role and responsibilities. They gave him quite specific paradoxical orders despite his alerts all along 2011 and 2012. They finally left his name being relentlessly placated through the media starting on April 6th 2012 as things were just getting worse and worse for them.
3. Some authorities have not performed their duty, far from it as the public reports show for those who know the case in depth. The “screen guy” complains against the UK regulator today, namely the FCA with good reasons. It may not stop at the FCA…
4. At the end of the day about $50 bln changed hands in the second quarter 2012 between a mass of investors and some “happy insiders”. Jp Morgan made about $25 billion or more on the event for itself as its public accounting reports show through the generation of what is called “tangible capital” or “hard capital” (10-Q and 10-K reports filed with the SEC).
5. One may summarize the trading scandal as: when the CIO of JP Morgan had lost $1 billion dollar, Jp Morgan as a whole had made $4 billion for itself net of its CIO loss. The Jp Morgan CIO lost in whole $6.3 billion which led to an ultimate profit at Jp Morgan of more than $25 billion in 2012.

AIG breaks into mortgage securitization big-time with high quality first offering

When American International Group sold its mortgage-guaranty unit United Guaranty to Arch Capital Group last year, the company said that it planned to turn to residential mortgages to make up for the loss in revenue from the sale of United Guaranty.

But AIG didn’t start originating new loans. Rather, the company has been buying up high-quality jumbo mortgages, and now plans to securitize those loans.

According to a presale report from Fitch Ratings, AIG is preparing to bring its first residential mortgage-backed securitization to market – a $511.98 million offering backed by 850 jumbo mortgages.

And while AIG is new to the securitization game, the quality of the RMBS deal itself is one of the strongest since the crisis.
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Sen. Warren calls on Federal Reserve to boot 12 Wells Fargo board members over fake accounts

The fallout from Wells Fargo’s fake accounts scandal has been rightfully significant, but if Sen. Elizabeth Warren, D-Mass., has her way, the fallout will extend to a place it’s barely touched so far – Wells Fargo’s boardroom.

Back in September, the bank was fined $150 million by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city and county of Los Angeles for more than 5,000 of the bank’s former employees opening as many as 2 million fake accounts in order to get sales bonuses.

At the time, the bank said that those 5,000+ employees had already been let go. But since then, the bank agreed to pay at least $142 million to the affected customers, several states and cities cut off their business dealings with the bank, the bank’s CEO and a number of senior executives stepped down, and more executives were terminated by the bank.

But, in Warren’s eyes, all those responsible for the bank’s actions have not yet been held accountable.

On Monday, Warren sent a letter to the Federal Reserve Board of Governors, asking the Fed to remove all 12 of Wells Fargo’s board members who served on the board from 2011 through 2015, the time period that the fake account scandal took place.

Wells Fargo’s board has 15 members, 12 of which were on the board during when the scandal took place.
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Trump Wedding Planner, Recommended by Ben Carson, Appointed to Oversee HUD in NY, NJ

Amazing, the inexperience HUD head recommends an inexperience HUD candidate…

Lynne Patton, a Trump Organization employee and Eric Trump’s wedding planner, might be the next head of the Department of Housing and Urban Development for New York and New Jersey.

Patton does not have a background in public housing, but was recommended by Ben Carson, the head of the national Housing and Urban Development department.

The Trump administration appeared to be backing away from the appointment later on Friday, but by then news had already spread through the streets of New York.

“I think it’s a joke. Is she going to bring more weddings to the housing?” said Omar Perez, a Manhattan resident.

Source: Trump Wedding Planner Appointed to Oversee HUD in NY, NJ | NBC New York http://www.nbcnewyork.com/news/politics/trump-wedding-planner-public-housing-new-york-new-jersey-lynne-patton-428938723.html#ixzz4kQA8OyDJ
Follow us: @nbcnewyork on Twitter | NBCNewYork on Facebook

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45th anniversary of the Watergate scandal

In the paper #OTD in 1972. Five men are arrested for breaking into the DNC offices at the Watergate Hotel. #nytimes pic.twitter.com/Pid5GZOpYe

— New York Times OTD (@OnThisDayNYT) June 18, 2017

 

TRUMP OFFICIALS OVERSEEING AMAZON-WHOLE FOODS MERGER MAY FACE CONFLICTS OF INTEREST

The blockbuster deal by Amazon to purchase Whole Foods rocked financial markets on Friday. Grocery and retail outlet stocks were in a tailspinanticipating how the online shopping giant may move to swallow up the supermarket industry, particularly in the booming online sales market.

The massive $13.7 billion Amazon-Whole Foods merger may also invite government oversight regarding antitrust concerns, a dynamic complicated by potential conflicts of interest from officials tied to the merger.

Officials from both the Justice Department and the Federal Trade Commission, the two agencies charged with enforcing antitrust law, have financial ties to the law firms expected to play a major role in managing the deal.

President Donald Trump’s pick to lead the Justice Department’s antitrust division, Makan Delrahim, has worked since 2005 as a lawyer and lobbyist at Brownstein Hyatt Farber Schreck, a firm that is registered to lobby on behalf of Amazon.

Delrahim, who has worked on merger deals for over a decade and is viewed by legal observers as less likely to pursue aggressive antitrust enforcement as the previous administration, will be in office to review the Amazon-Whole Foods deal soon. He was nominated in March and was been cleared by the Senate Judiciary Committee this month, making his appointment imminent.

Delrahim, however, isn’t the only official with ties to the merger. Abbott Lipsky, appointed in March as the new acting Director of the FTC’s Bureau of Competition, which oversees antitrust, previously worked as a partner in the antitrust division of the law firm Latham & Watkins. Lipsky’s former law firm has been tapped by Whole Foods’ financial adviser, Evercore, to help manage the merger with Amazon, according to Law360.

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Trump’s Personal Lawyer, Not a Member of the DC Bar, Hit With Ethics Complaints in NY, DC Over White House Advice

According to Kasowitz’s homepage at his law firm, Kasowitz is only admitted in New York.

Law.com:

Marc Kasowitz, President Donald Trump’s personal lawyer, is facing two ethics complaints with the New York and Washington, D.C., bars over his reported advice to White House staffers.

Both complaints cite an article in The New York Times on Sunday reporting that Kasowitz advised White House staff that it was “not yet necessary” for the president’s aides to hire their own lawyers, amid investigations by Congress and special counsel Robert Mueller into whether members of the Trump campaign colluded with Russia.

The ethics complaints contend Kasowitz, managing partner of Kasowitz Benson Torres, violated attorney ethics rules in New York and Washington by giving such advice to unrepresented individuals.

Mark Corallo, a spokesman for Kasowitz, said in statement that the ethics complaints are meritless, calling them “obviously politically motivated complaints based on press reports, which were based on anonymous sources.”

Campaign for Accountability, a nonprofit government watchdog group formed in 2015, filed its ethics complaint with the Washington, D.C., Office of Disciplinary Counsel, Board on Professional Responsibility on Thursday.

Separately, Neal Goldfarb, senior attorney and litigator at corporate law firm Butzel Long, lodged acomplaint Tuesday with the Appellate Division, First Department, disciplinary committee in New York.

When Trump’s lawyer needs a lawyer, you have to know something’s crooked somewhere

MIAMI — Michael Cohen, who for years has served as President Trump’s personal attorney, has hired a lawyer of his own to help him navigate the expanding Russia investigation.

Cohen confirmed Friday to The Washington Post that he has retained Stephen M. Ryan, a Washington-based lawyer from the law firm McDermott, Will & Emery who has experience prosecuting criminal cases as an assistant U.S. attorney.

Cohen’s hiring of Ryan as his personal lawyer was first reported by Katy Tur of NBC News.

Cohen’s decision is the latest indication that the Russia probe overseen by special counsel Robert S. Mueller III is intensifying and could end up focusing on a number of Trump associates, both inside and outside the White House.

Michael Caputo, a New York-based political operative and radio commentator who served as a senior communications adviser on Trump’s campaign, also has hired a lawyer of his own to navigate the Russia probe.

Caputo has retained Dennis C. Vacco, a former New York state attorney general and a partner at the law firm Lippes Mathias Wexler Friedman. His hiring also was first reported by NBC’s Tur.

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CenturyLink Is Accused of Running a Wells Fargo-Like Scheme

A former CenturyLink Inc. employee claims she was fired for blowing the whistle on the telecommunications company’s high-pressure sales culture that left customers paying millions of dollars for accounts they didn’t request, according to a lawsuit filed this week in Arizona state superior court.

The company’s shares fell the most in six weeks on the news, while the shares of merger partner Level 3 Communications Inc. also dropped sharply.

The plaintiff, Heidi Heiser, worked from her home for CenturyLink as a customer service and sales agent from August 2015 to October 2016. The suit claims she was fired days after notifying Chief Executive Officer Glen Post of the alleged scheme during a companywide question-and-answer session held on an internal message board.

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