Lurking behind the big banks is a mess of unregulated finance that could trigger the next financial blowup.
AlterNet-
Most people now realize big banks aren’t their friends. Only in the fairy tale movie world of It’s a Wonderful Life does banker George Bailey lend a helping hand to friends and neighbors to build a prosperous Bedford Falls.
But many people have no idea that the regulated banking system is only one part of a gigantic problem. Lurking behind regulated banks is the shadow banking system. And it’s from out of these shadows that the next big shock to the global financial system, threatening everyone’s nest egg, might come.
What is shadow banking? Different writers mean different things when they use the term. But the fact that it’s hard to explain only makes it more difficult to constrain.
As real estate investment heats up and the El Paso County Public Trustee’s foreclosure auctions overflow with anxious bidders, ethics have become a bigger issue.
Those closest to the action say there are regular stories of investors breaking into houses to check them out before the sale, trashing houses after lien holders redeem them, banks sending eviction notices on properties they don’t own yet, and investors going into homes to start remodeling them before they have the title.
That last scenario is actually getting out of hand, said Public Trustee Tom Mowle.
“We’ve had a rash lately of what I would characterize as burglaries,” Mowle said. “We’ve had a couple cases lately where people have bought property at sale and immediately go to the house, lock people out and take their stuff.”
While Obama is campaigning, these citizens are losing their home. Wrong is many levels.
TruthOut-
San Francisco – Robert Moses is 92, an African American and a World War II Navy veteran.
Don Baird is a couple of weeks shy of his 90th birthday, is scheduled for heart surgery next week, and is also a World War II veteran.
Aside from being former servicemen, both men also share one other thing: they are about to lose the homes they owned, each for more than four decades, to foreclosure.
“We were granted loans we should not have been given because we were not financially capable,” asserted Baird’s wife, Tina, 81, a former teacher.
Ronni and George Mandell won’t go out with a whimper in the fight to keep their home. And they say because of that, Bank of America won’t modify their mortgage terms to a payment they can afford.
Bank of America offered the couple a chance to modify the loan on the Jones Street house they’ve owned for 10 years in order to make payments more manageable, but only with conditions that include essentially agreeing to a gag-order when it comes to the deal and the financial institution. That means keeping quiet about opinions of the bank on Facebook, blogs, websites and in the media, and taking down any existing postings — something that may be unexpected in a document relating to a financial matter.
The Mandells rejected the settlement.
“I cherish my rights to free speech,” George Mandell said. “We’re prepared to lose the house if we have to, but we’re going to fight it. We’re standing firm not just for ourselves, but hopefully for the rest of the people in the country. Because it’s gotta be cleaned up.”
One of the reasons Moyers & Company frequently returns to the theme of money and politics is because it’s absolutely necessary to do so. Nothing corrupts our political system more than the ability of the rich and influential to spend limitless amounts of money — often in secret — with the intention of creating preferred political outcomes. And far from being a regulator of campaign finances, our political funding laws — aided by a corporate-friendly Supreme Court and self-interested politicians — only facilitate the process of empowering the few while subjugating the many.
Few understand how money moves in and out of our political system better than campaign finance reform advocate Trevor Potter. A former chairman of the Federal Election Commission and founding president of the Campaign Legal Center, Potter was Stephen Colbert’s chief advisor when Colbert formed his own super PAC and 501 (c)(4) in a clever effort to expose the potential for chicanery behind each.
The Pinellas County mother whom authorities say killed her two young boys before taking her own life Friday night had financial problems and was facing a welfare fraud charge, according to the Tampa Bay Times.
Dawn Brown, 34, was due to go before a judge on the fraud charge next week. She and her husband, Murphy Brown, also had a looming foreclosure on their home on Sidney Street in unincorporated Clearwater, and their electricity had been shut off for weeks, the Times said.
The family had begun cooking meals on a charcoal grill and was running an extension cord to a neighbor’s outlet to heat up frozen meals in a microwave.
A neighbor, Rob Petryszak, told the Times that Dawn Brown “fell into a depression” years ago after dropping out of college.
Lanny A. Breuer, Assistant Attorney General for the Criminal Division, U.S. Department of Justice, addressed the New York City Bar Association on September 13, 2012.
President Barack Obama didn’t plan to meet with the public during his trip to Tampa today, but a woman is hoping a sign on her roof got his attention anyway.
Angela Agrippa says she’s in danger of losing her home and is hoping Obama or his Republican rival Mitt Romney, who was also in the Bay area today, saw the sign and reach out to help her.
Agrippa sent an email to News Channel 8 describing her dilemma: Her husband James Martino Jr. died of a heart attack in March. They had fallen into foreclosure, she said, because of medical bills from his heart problems and her rheumatoid arthritis, which had relapsed after she had given birth.
She wants to stay in the home to raise her 6-year-old daughter and has applied for loan modification with Chase Bank five times over the past four years, but has been unsuccessful. She has filled binders with her financial records.
“I wrote so many letters begging them,” she said through tears. “It’s been a nightmare.”
The Shuman Law Firm announces that it is investigating potential claims against certain officers and directors of Lender Processing Services, Inc. (“LPS” or the “Company”) (NYSE: LPS).
LPS provides integrated technology and outsourced services to the mortgage lending industry in the United States.
The firm’s investigation primarily concerns allegedly illegal activity that occurred at LPS’s subsidiary, DocX LLC (“DocX”) from 2007 through 2010. On August 2, 2012, the Missouri Attorney General’s office announced a settlement with LPS of criminal charges of forgery and making false statements by DocX and DocX’s former president. These charges arose out of the mortgage document surrogate signing scandal (robo-signing) which became public in 2010. As a part of the settlement, LPS agreed to pay the state of Missouri $2 million.
The cost of the bailouts seems never-ending and more of the mounting evidence that it didn’t work, like a bailout recipient laying off 16,000 workers this year, continue to make the news.
Tied to the root cause of the financial meltdown of 2007-2008, are mortgage giants Freddie Mac & Fannie Mae in light of their penchant for bundling sub-prime mortgage securities in the years preceding the collapse. Since those dark times, they have continued to be the recipients of multiple bailouts and government assistance even as taxpayers and critics pleaded for an end to their long overdue folding.
On Aug. 17, 2012, the Treasury Department announced it was changing the terms of its bailout agreement with Freddie & Fannie in a way that will shrink the holdings of the two mortgage giants more quickly and will require payment to the government of all quarterly profits the companies earn.
Here’s the translation: the government is pretending that they are helping the taxpayers out by taking all of the profit generated by Freddie & Fannie, rather than continuing with the fixed 10% dividend that had been written into the tax bailout. Instead, they are guaranteeing that we won’t get paid back nearly as much from the bailouts as we could’ve been.
The Federal Housing Finance Agency has decided to raise guarantee fees from Fannie Mae or Freddie Mac on mortgages in states that respect the rule of law.
Really, that’s about the size of it.
As Shahien Nasiripour points out today, the g-fees will go up in five states that have slowed the foreclosure process by either mandating mediation before eviction, or created laws that seek to ensure proper documentation in the foreclosure process.
US borrowers in states where home foreclosures are costly and time-consuming will have to pay more for their mortgages, the top housing regulator has proposed.
Lenders originating new loans in New York, New Jersey, Illinois, Florida and Connecticut will be forced to pay US-backed mortgage giants Fannie Mae and Freddie Mac up to 30 basis points extra for their credit guarantee, the Federal Housing Finance Agency said in its proposal.
The fee would probably be passed on to borrowers. The agency said the surcharge would compensate for the increased cost of repossessing homes in the five states, costs ultimately borne by US taxpayers […]
“If those states were to adjust their laws and requirements sufficiently to move their foreclosure timelines and costs more in line with the national average…?the fees imposed under the planned approach would be lowered or eliminated,” the FHFA said.
So the federal conservator of Fannie and Freddie wants to put its thumbs on the scale in favor of faster…
A bank has filed a lawsuit in Benton County to foreclose on the Springdale home of Lt. Gov. Mark Darr, but the northwest Arkansas Republican disputes that he is in arrears.
Darr told the Arkansas Democrat-Gazette (http://is.gd/KDbJoJ ) Friday he hadn’t missed payments on either of two loans on the $275,800 home. The house is in a part of Springdale that extends into Benton County.
The lawsuit says Darr has missed payments for four consecutive months on two loans from Signature Bank of Arkansas. The suit claims Darr owes $256,074 on one loan and $29,771 on the other.
Darr told the newspaper he wasn’t aware of the lawsuit and that’s it’s inaccurate to claim he missed the four loan payments. Darr told the paper he’d give the bank a call.
Once again a major lender, originator, servicer, and securitizers are attempting to sell loans free and clear and whitewash their liabilities. GMAC, RESCAP and affiliated entities are currently in over 1900 prepetition litigation cases nationwide, and it is too early to determine if they will abide by the nationwide settlement agreement.
There have been countless efforts since the subprime fiasco, to get a bankruptcy cram down bill passed. The effort has been defeated every time. Ironically, the lenders and servicers have gone bankrupt and in those Chapter 11 processes basic homeowner rights have been taken away.
One such protection that was added to the BACPA in 2005 is 363(o) which has been largely ignored in all these cases – a provision that seems to limit “free and clear” sales of assets that are consumer credit transactions subject to the Truth in Lending Act or consumer credit contracts. Although much fun has been poked at including the phrase “Consumer Protection” in BAPCPA, Congress may have anticipated the problems being raised by the bankruptcies of subprime lenders by adding 363(o) to the Bankruptcy Code.
Homeowners have earned the right to have a seat at the table in this matter.
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
MONIQUE SYKES et al., Plaintiffs,
– against –
MEL HARRIS AND ASSOCIATES, LLC, -et al., Defendants
APPEARANCES: (See last page) CHIN, Circuit Judge
In this case, four plaintiffs allege that a debt-buying company, a law firm, a process service company, and others engaged in a scheme to fraudulently obtain default judgments against them and more than 100,000 other consumers in state court. Defendants allegedly acted in concert to defraud these consumers in violation of the Fair Debt Collection Practices Act (the “FDCPA”), 15 U.S.C. § 1692 ~, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et~, New York General Business Law (IIGBL”) § 349 1 and New York Judiciary Law § 487. Plaintiffs seek injunctive relief, declaratory relief, and damages on behalf of themselves and other similarly situated individuals. They move for class certification.
The motion is granted. The record before the Court establishes that defendants obtained tens of thousands of default judgments in consumer debt actions, based on thousands of affidavits attesting to the merits of the action that were generated en masse by sophisticated computer programs and signed by a law firm employee who did not read the vast majority of them and claimed to, but apparently did not, have personal knowledge of the facts to which he was attesting. The record also shows that on hundreds of occasions the defendant process servers purported to serve process at two or more locations at the same time. As discussed more fully below, defendants’ unitary course of conduct purportedly to obtain default judgments in a fraudulent manner presents common questions of law and fact that can be resolved most efficiently on a class-wide basis.
The mortgage task force formed by President Barack Obama to probe misconduct that contributed to the financial crisis will soon take legal action, New York Attorney General Eric Schneiderman said on Thursday.
Schneiderman, a co-chair of the task force, would not say whether cases would be brought against individuals or financial institutions. He also would not comment on whether criminal charges would be filed.
But he said his office would take action and that he expected his federal counterparts on the task force to do so as well.
“We’ll see actions being taken sooner rather than later,” said Schneiderman, speaking in an interview at his office in New York.
The Residential Mortgage-Backed Securities Working Group was formed in January, to probe the pooling and sale of risky mortgages in the runup to the 2008 financial crisis. Obama said he was creating the group to “hold accountable those who broke the law” and “help turn the page on an era of recklessness.”
We want a real Wall Street investigation before time runs out, or none at all. No fig-leafs, no tokens – it’s time to indict the biggest banks for historic fraud before statues of limitations run out, or tell the world why not.
For the last 5 years, everyone in America has been asking the same question: “When are the Wall Street bankers responsible for crashing the global economy going to be prosecuted?” There have been zero indictments, and now the statute of limitations is running out. We want to know why AG Eric Schneiderman, the latest lawyer assigned to investigate the financial crisis, has yet to produce any indictments of major Wall Street fraud – even though the clock to prosecute megabank crimes is running out.
When Eric Schneiderman, Attorney General of New York, was appointed to lead the investigation into large-scale Wall Street fraud, America got its hopes up. Finally, here was a crusading progressive with a record of taking Wall Street crime seriously and making the right enemies who would, after 5 years of zero indictments, finally deliver results. He even promised when he was appointed in January that we wouldn’t have to wait six months to start seeing results. It’s now *eight* months later, and there has barely been a peep from Schneiderman or his Financial Crisis Task Force.1
But it gets worse. Much of the financial fraud that led to the Great Crash happened in 2007 – and has a five-year statute of limitations to bring forward indictments.2 Which means Schneiderman either needs to start bringing forth indictments *now* to have any hope of getting the American people justice – or watch as the worst criminals on Wall Street go unpunished, letting the next crisis happen without any disincentive to change their ways.3
Meanwhile, the Task Force has been pursuing indictments for all manner of low-level financial crime – be it individual traders who played with LIBOR, or aftermath from the Madoff case – but virtually nothing having to do with the worst global financial crisis in modern memory.4This has to change. No token indictments, no distractions: we need indictments on the worst offenders right now.
There are other ways for Schneiderman to proceed with the investigation – but they either involve the banks agreeing to delay the investigation through a “tolling agreement” (fat chance), or proceeding with what’s called a FIRREA investigation, which takes criminal charges off the table. Neither of these is acceptable – there can’t be one set of laws for the financial elites and another for everyone else.
AG Schneiderman: You’re one of the few public officials who has talked the talk on holding Wall Street accountable. Now it’s time to walk the walk. Indict Wall Street – or step down in public protest.
The county accused national mortgage giants Freddie Mac and Freddie Mae of lying to evade real estate transfer fees, in a federal lawsuit filed Monday.
Macomb County and county Treasurer Ted Wahby claim in the complaint filed in U.S. District Court in Detroit that the pair of entities failed to pay the fee as both the “grantor” and “grantee” on deed transfers and mortgage transactions here.
The county contends the two entities falsely claimed they were exempt from the transfer tax because they’re part of the federal government, sometimes citing state law and other times citing federal law. However, “Fannie Mae and Freddie Mac are federally chartered private corporations and not government entities,” the county says in the lawsuit.
Education is key. If you know the market is being manipulated by controlling the shadow inventory, then you know people are paying attention.
Market Watch-
A housing recovery may be under way, but there’s an obstacle that appears to be slowing down the rebound: the unusually high number of buyers who walk away from their contracts.
An average of nearly 18% of signed contracts on existing home sales were canceled during the three months ending July, according to data released this month by Capital Economics, an independent research firm. That’s the highest all year and the most since May 2010, when that figure reached 23%; in the five years before the housing slump started, the average never went higher than 10%. Separately, 36% of Realtors are reporting some kind of problem with a contract, including cancellations, delays and renegotiations of the sales terms, according to August data by the National Association of Realtors. That’s up from 30% earlier this year.
The latest setback comes as home sales are rising. Existing-home sales increased 7.8% in August from a month earlier and rose 9.3% from a year prior, according to data released this morning by the NAR.
More than 50 boxes of cremated human remains have been found at a house in southwest Ohio along with documents from a funeral home, police said Tuesday.
The 56 plastic boxes are used by funeral homes as temporary containers for cremated remains, said Dayton police Lt. Wendy Stiver. She said a contractor called police Tuesday after finding the boxes stacked in a closet.
“He said the house is in foreclosure and he was hired to remove remaining items from the house,” Stiver told The Associated Press.
Stiver said police notified the Montgomery County coroner’s office, which collected the remains. Documents from the McLin Funeral Home in Dayton also were found in the house, she said.
This just in…more as it develops…[update] see below
State AGs are Michigan, Oklahoma and South Carolina.
CEI-
Washington, D.C., September 20, 2012 – The states of Oklahoma, South Carolina, and Michigan today joined a lawsuit challenging the constitutionality of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The states are asking the U.S. District Court for the District of Columbia to review the constitutionality of the Orderly Liquidation Authority, established under Title II of Dodd-Frank. The three states are joining the original plaintiffs in the lawsuit: State National Bank of Big Spring, Texas; the 60 Plus Association; and the Competitive Enterprise Institute.
“We must challenge Dodd-Frank to protect Oklahoma taxpayers and our financial stability. The law puts at risk the pension contributions and tax dollars that the people have entrusted us to protect,” Oklahoma Attorney General Scott Pruitt said. The Orderly Liquidation Authority (OLA) gives the Treasury Secretary the power to liquidate any financial company as along as the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve are in agreement.
Vote for Romney if you want to add more to this same.
HuffPO-
More than two-thirds of Americans are now living paycheck to paycheck, according to a survey released on Wednesday by the American Payroll Association. The survey of 30,600 people found that 68 percent said it would be somewhat difficult or very difficult if their paychecks were delayed for a week. These results show Americans are still struggling with the recession’s effects, the association said.
“This study clearly shows that Americans are finding it hard to save,” said Dan Maddux, executive director of the San Antonio-based association of payroll managers.
In 2006, 65 percent of respondents reported living paycheck to paycheck, a figure that shot up to 72 percent in 2010 in the wake of the recession.
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