The Federal Reserve Board (Board) and the Federal Deposit Insurance Corporation (FDIC) on Monday announced the release of additional guidance, clarification and direction for the first group of institutions filing their resolutions plans pursuant to the Dodd-Frank Act.
In particular, the revised instructions include requests for more detailed information on, and analysis of, obstacles to resolvability under the Bankruptcy Code including global issues, financial market utility interconnections, and funding and liquidity, as well as to provide analysis to support the strategies and assumptions contained in the firms' resolution plans.
The case of a Brooklyn state senator charged this week with embezzling $440,000 in escrow funds has exposed a stunning flaw in how sales of foreclosed properties are handled.
Lawyers appointed by judges to oversee foreclosure cases are handling millions of dollars, with no oversight.
Stunned by the indictment of state Sen. John Sampson (D-Brooklyn), charged with embezzling $440,000 from sales of foreclosed properties, the state Office of Court Administration launched a review Tuesday of how foreclosure sales are handled.
In the hearing, as Think Progress reports, Warren refers to a settlement made in January between federal regulators and several major banks in which regulators "abandoned a case-by-case review of foreclosure fraud conducted by some of the nation’s largest banks in favor of a $9.3 billion settlement," letting big banks off the hook.
Regulators are now withholding information about how frequently the banks actually broke the law—a number which far exceeds what was originally agreed upon in the watered down January settlement.
The Fed is responsible for overseeing individual banks to ensure their safety and soundness, but in recent years it has ramped up its monitoring of an increasingly complex web of financial services. Bernanke said it is now conducting regular stress tests on banks, tracking credit availability among nonbank financial institutions, evaluating asset prices for overheating and monitoring the health of households and businesses.
“Systemic risks can only be defused if they are first identified,” Bernanke said during a a speech at the Chicago Fed’s annual conference.
Nearly 100,000 troubled borrowers were shortchanged on payments from Goldman Sachs Group Inc. and Morgan Stanley & Co., the Federal Reserve said — money intended to compensate for possible errors and abuses during foreclosure proceedings in 2009 and 2010.
The company hired to distribute the money, Rust Consulting, sent checks to about 96,000 borrowers on May 3 that “were smaller than the amounts that the Federal Reserve had specifically instructed Rust to send,” the central bank said Wednesday.
There is evidently no idea bad enough and no failure severe enough to stop the government from trying it once again. In myopia remarkable even by abysmal government standards, the White Houseis pushing for policies that fueled the housing bubble, which burst a mere five years ago. Reintroducing those policies at this stage of a nascent recovery in the housing market will set the stage for repeating history, and very likely leave taxpayers on the hook once again for another bailout.
Instead, the Fed has kindled speculation. Investors are desperate for yield and are paying up for riskier assets. In areas like real estate, structured finance and equities, the markets are ahead of the fundamentals. It doesn’t look to me like a bubble yet. But I would call it the Dysplasia Stage, abnormal growth that looks precancerous.
It’s not just an economic or financial issue, it’s cultural and psychological. We seem to have unlearned what real growth is and simply substituted speculative bubbles. Policy makers are either paralyzed or barrel forward because this is all they know how to do.
Watt, a longtime friend of the financial industry, might make a terrible FHFA director, and he might make a fine one. It doesn’t much matter because he’s unlikely to be confirmed by the Senate. The real story here is how the Obama administration has used the FHFA director position as a convenient distraction from their disastrous housing policies.
Watt’s record is decidedly mixed. His district includes Charlotte, home to Bank of America, and the largest retail banking industry hub outside of New York City.
Borrowers with mortgages backed by Fannie Mae (FNMA) or Freddie Mac (FMCC) will have until the end of 2015 to obtain new loans under the Home Affordable Refinance Program, the Federal Housing Finance Agency said today.
HARP previously was scheduled to expire at the end of 2013. The program allows borrowers to cut their loan payments by refinancing at lower interest rates even if they are stuck in homes that have lost value.
Senate Banking, Housing and Urban Affairs Committee Financial Institutions and Consumer Protection Subcommittee Hearing: Outsourcing Accountability? Examining the Role of Independent Consultants Thursday, April 11, 2013, 10 AM - 12 PM
Panel 1 Daniel P. Stipano, Deputy Chief Counsel, Office of the Comptroller of the Currency Richard Ashton, Deputy General Counsel, Board of Governors of the Federal Reserve Panel 2 Konrad Alt, Managing Director, Promontory Financial Group, LLC James F. Flanagan, Leader, U.S. Financial Services Practice, PricewaterhouseCoopers LLP Owen Ryan, Partner, Audit & Enterprise Risk Services, Deloitte & Touche LLP
Mortgage bond investors in Fannie Mae and Freddie Mac securities fear the replacement of current acting director Ed DeMarco of the Federal Housing Finance Agency will devestate the secondary market, given the fact that he's held off principal reduction programs that likely would have accelerated prepayments.
That possible fear reared its head Wednesday as Wall Street felt the ground shake when reports from Rep. Elijah Cummings office noted that Congressman Mel Watt, D-N.C., is said to be President Barack Obama’s pick to lead the FHFA.
On September 27, 2010, Congress created the Small Business Lending Fund (“SBLF”) as part of the Small Business Jobs Act of 2010, which permitted Treasury to invest up to $30 billion in eligible small banks to increase “the availability of credit for small businesses.” Unlike the Troubled Asset Relief Program (“TARP”), SBLF incentivized lending by rewarding increases in lending with lower rates that a bank would pay the Government for the use of the money (known as the dividend rate).
When federal regulators announced the abrupt ending of the Independent Foreclosure Review in place of a new agreement, the conclusion to the review process led to more questions than answers.
To identify challenges in the foreclosure review process, the Government Accountability Office (GAO) undertook its own investigation. In a report, the GAO identified three hurdles that prevented the Office of the Comptroller of the Currency (OCC) and Federal Reserve from achieving their goals through the foreclosure review: complexity of the reviews, overly broad guidance, and limited monitoring.
Wells Fargo (WFC) and Citigroup (NYSE:C) have halted the vast majority of their foreclosure sales in multiple states following the release of new guidance by the Office of the Comptroller of the Currency.
The abrupt slowdown came in response to the OCC's April release of minimum standards for foreclosure sales, which are usually the final act in the foreclosure process. The Federal Reserve issued identical guidance to the banks it oversees, making the guidelines universal for the industry.
Warren sent a letter to the Justice Department, as well as to the Securities and Exchange Commission and the Federal Reserve, asking them for evidence on how a settlement that doesn't require a bank to admit guilt would be better policy than taking the bad apple to trial. If regulators at least show that they are willing to play tough, she argued, it will help deter bad behavior and allow regulators to negotiate bigger fines in the event of a later settlement. Here are a few snippets:
There is no question that settlements, fines, consent orders, and cease and desist orders are important enforcement tools, and that trials are expensive…But I believe strongly that if a regulator reveals itself to be unwilling to take large financial institutions all the way to trial…the regulator has a lot less leverage in settlement negotiations and will be forced to settle on terms that are much more favorable to the wrongdoer…If large financial institutions can break the law and accumulate million in profits, and if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law.
This "Streamlined Modification Initiative" needs a better name, better branding, and at least so far, better publicity. But overall, I am very encouraged that FHFA is adopting this kind of program. It's what I call a "push program," requiring the servicers to deliver relief. We've seen at least two servicers roll out similar push programs as part of the National Mortgage Settlement. Bank of America sent letters to over 100,000 homeowners stating that if the borrower literally did nothing that their second mortgage would be forgiven and released, and the debt reported to credit bureaus paid in full.
For more than a decade, four of the nation’s largest mortgage insurers paid millions of dollars in kickbacks to home lenders in exchange for business, raising insurance prices for consumers, the Consumer Financial Protection Bureau said Thursday.
The consumer watchdog agency fined Genworth Mortgage Insurance Corp., United Guaranty Corp., Mortgage Guaranty Insurance Corp. and Radian Guaranty Inc. a total of $15.4 million for an alleged scheme that the bureau said was a common practice in the lead-up to the nation’s housing meltdown.
The Federal Reserve approved a final rule Wednesday that brings the government closer to placing large nonbank companies that were at the heart of the financial crisis under stricter supervision.
The rule leaves a strikingly wide swath of companies on the table as potentially falling under tougher oversight, including private-equity firms and hedge funds. Yet industry officials and others following the process say it’s unlikely that officials will ultimately single out more than a handful of firms.
Upon request from Congress, the CBO studied the mortgage and foreclosure market and concluded that principal reduction should be the keystone of policy for Fannie and Freddie because it is a win-win that will return money to the taxpayers, spur the economy with an fiscal stimulus with a program that costs nothing, increasing GDP and employment. The CBO unequivocably recommended immediate implementation of large-scale reductions in mortgage principal.
In making the announcement that Andrew Ceresney of Debevoise & Plimpton will share the post with the Acting Director, George Canellos, White called Ceresney a “former prosecutor.” That hardly does justice to the cozy ties between Ceresney and Wall Street. (Ceresney worked for the U.S. Attorney’s office in the Southern District of New York in a prior career but has been employed at Debevoise since 2003.)
This time last year, Ceresney was basking in the glow of a herculean accomplishment for JPMorgan Chase, Citigroup, Wells Fargo, Bank of America and Ally.