The Mortgage Lender Implode-O-Meter (main list & news)
Mortgage Settlement Yields $50B of "Aid"; But Not All Aid Dollars Equal
The latest figures shifted that equation, with the banks more often giving homeowners principal or interest reductions on their loans or refinancing them into new loans, enabling them to stay in their homes. Those benefits totaled $29.2 billion to 387,420 homeowners since the program began in March 2012, according to Smith's tally of the bank reports. By comparison, aid in the form of short sales totaled $20.1 billion to about 175,000 borrowers. One prominent critic, Kevin Stein of the California Reinvestment Coalition, said the assistance still involved too little reduction of first-mortgage balances -- the action, he said, that was "meant to be the heart of the agreement." In California, Stein said, relief skewed too heavily toward short sales and writing off second liens -- delinquent credit lines and second mortgages that would be worth little or nothing if an underwater home went through foreclosure. Stein gave Bank of America, which is required to deliver by far the most assistance to borrowers, good marks during the latest quarter, saying its assistance was delivered almost entirely by reducing principal on first mortgages. Wells Fargo, by contrast, continued to use short sales heavily, Stein said. It dispensed aid about equally through short sales and principal reductions, he said.
EU Committee Approves Bail-In Law
``On Monday, a group of European lawmakers in the house's economics committee voted that, from 2016, large depositors in the European Union might suffer losses if a bank gets into serious trouble, echoing a deal in Cyprus where wealthy depositors were hit hard at two banks to save the country from bankruptcy.''
Abe's Resurgent Japan Hurt by Lack of Business Spending
``"Stocks and the yen may have come back, but the state of the real economy is very different," said Watanabe, 49, who has no plans to raise wages for his 17 employees and hasn't paid a bonus since 2008. "It's impossible for me to be optimistic." ''
Richard Russell on the Bizarre Market; Crude Manipulations
``I've never seen so much money being sloshed about. Nor have I ever seen so much news of corruption and criminal activity.... I think the gold miners will fly once gold gets over 1500. This crunch job on gold is the crudest manipulation job I've ever seen.''
Updated Consumer Relief - The Office of Mortgage Settlement Oversight
``"Since the Settlement was announced, I have released three prior progress reports that detailed the banks' self-reported consumer relief data on a quarterly basis," said Smith. "I believe it is important to continue to share this data with the public, and, accordingly have done so on my website. However, I have not prepared a full report on this data because I am focusing my time testing the banks' year end consumer relief claims and giving them appropriate credit as outlined in the Settlement. This allows me to provide the public with credited reports as soon as possible. "The four banks that have not yet been credited have requested that I determine their consumer relief progress through the end of 2012," said Smith. "I will release my review of their work in the coming weeks to the Court and the public. At that time, I look forward to engaging in a public conversation about their progress."''
Monitor Checking Into Violations of Mortgage Settlement
``The announcement that Smith is looking into potential violations comes a week after New York State Attorney General Eric Schneiderman said he would sue BofA and Wells over complaints they did not provide fair and timely service to homeowners seeking relief. Smith and others attorneys general have been looking into the same issues. Illinois Attorney General Lisa Madigan said Tuesday her office found "an alarming pattern of potential violations of ?servicing standards.'" For example, she said that in 60% of files surveyed, banks failed to notify borrowers within five days of missing documents in their applications.''
Washington Signals Deep Dollar Concerns -- Paul Craig Roberts
``What does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse. ''
This Time, Gold Bugs May Have a Point - Barron's
``These improbable moves have made gold bugs suspicious, which isn't unusual... They point to bursts of selling on Friday, April 12, which resulted in prices plunging by more than 5%, and to dumping that resumed the following Monday in Asia, early in the day when markets are illiquid. That culminated in a 9% collapse by the time the New York market had settled. But a seller who wanted to unload a large position at the optimal price would have done precisely the opposite--liquidate as discreetly as possible. Instead, sellers dumped the equivalent of more than 300 tons of the metal in staccato-like blasts during those sessions.''
Caterpillar North America Sales Collapse Suggests US Economy Back To 2010 Levels
``US machine retail sales just saw the biggest tumble in three years, falling 18% Y/Y: the most since early 2010. ''
Rickards: Bernanke Has No Exit Plan
``"There's a good possibility I may never see another rate hike in my lifetime," says Rickards.''
Federal COA Rulings Could Make 5 Years Of Non-Judicial Fannie/Freddie Foreclosures Unconstitutional
2 Federal Appellate Courts have ruled Fannie Mae and Freddie Mac are government entities and the ruling could create a constitutional crisis in non-judicial foreclosure states.
Alabama Slamma' -- Not for Better, Far Worse... As Foreclosures we Chart
``We seem to be having a national recovery in much of the media, but in the states themselves the numbers are refusing to cooperate. I guess if you can have a "jobless recovery," then you can probably have a national recovery without states being involved. According to a wonderfully dizzying article on AL.com -- All Alabama, the southern state is facing some roadblocks to the recovery of its housing market. According to words used in the article's headline, "foreclosures are crippling the state's housing market, despite a national trend." Ready to have some fun? Here goes... ''
Mt. Gox accused of violating US money transfer regulations as Bitcoin Crackdown Begins
The warrant alleges that Mt. Gox failed to register as a "money transmitting business" in accordance with 18 U.S. Code 1960. Violators can be fined and sentenced up to five years in prison....How bitcoin exchanges fall under U.S. federal and state law had been somewhat in question. But in March, FinCEN issued guidance specific to virtual currencies, stating that exchanges are required to register but users are exempt. Which apparently makes them retroactively in violation...
Former FHLB Prez: Fed Should Be Broken Up
``Pollock said the Fed's current operating status could be accurately characterized by the following: It's too big, with over $3.3 trillion in assets, it's too leveraged at 60 to 1, it's extremely short-funded and it's "a frequent contributor through its interest rate and money-printing action of gigantic systemic risk." "Therefore, it follows pretty clearly from the same logic that we should break up the Fed," said Pollock... [who] noted that when Congress was setting the foundation for the modern Federal Reserve in 1913, lawmakers "thought they were creating a 'federal' structure of 12 regional 'reserve banks,' not a monolithic central bank."
Exiting QE could 'undermine the recovery', IMF warns
Central banks, including the Bank of England, strayed into "unchartered waters" by cutting interest rates to near-zero and launching billions of pounds of quantitative easing, and they will find the exit "difficult to control", the IMF said. "The market response [to a rise in interest rates] will be less predictable ... possibly for several months or even years."...The IMF also confirmed earlier work by the Bank that warned of large losses on central bank balance sheets. In a shock scenario, under which rates would need to rise by six percentage points, losses on the current £375bn QE programme in the UK could reach 4.5pc of GDP -- or £70bn. Even under a "likely case" scenario where rates rose by four percentage points, the loss would be £50bn.
JPMorgan Must Face Dexia s Mortgage Suit, Judge Rules
``The nation's biggest bank will have to face allegations by Dexia, which says it lost hundreds of millions of dollars after buying $1.6 billion in residential mortgage-backed securities from JPMorgan Chase, Judge Jed Rakoff of the U.S. District Court in Manhattan ruled Friday.''
As Housing Markets Recover, Wall Street Beats Families To Homes
``These investment firms are acquiring vast quantities of homes, fixing them up, and then marketing them as rentals. They arrive at auctions or home sales bearing cash, which gives them a competitive edge on millions of ordinary would-be buyers like the Gilbertsons, who must finance their purchase using borrowed money. These cash buyers are also more likely to pay above asking price, local brokers say, which is contributing to the overall price increase. One company, Invitation Homes, funded by the hedge fund Blackstone, has over the past year spent $4.5 billion to purchase about 25,000 homes in formerly distressed housing markets, including 4,000 properties here in the Phoenix area. ''
The slow-going process of compensating victims of housing violations
``In 2011, Wells Fargo agreed to compensate up to 10,000 borrowers after the Federal Reserve found the bank was steering them into subprime loans even though they qualified for better mortgages. But no borrowers have received money yet. Last year, Bank of America agreed to pay some borrowers between $1,000 and $5,000 for what the Justice Department called lending discrimination. The agency said the bank illegally asked some would-be home buyers who relied on disability income to provide a doctor's letter verifying the severity of their ailment. But it's still unclear how many people will ultimately be paid. There isn't a full list of the victims.''
Dimon has little to lose in shareholder vote
``Much better, Dimon could cede a sliver of ego to regain the support of shareholders by accepting their decision. This would leave him with two options. He could relinquish the CEO's duties and just keep the title of chairman. That would clear the way for new blood running the bank day-to-day. Or he could remain as CEO under a new independent chairman.''
What Makes a Mortgage a "Bad Loan?" I'm Confused.
``What makes a loan a "bad loan?" I know there are lending practices defined as being predatory in nature that result in "bad loans," but that's not what I'm talking about. According to the Center for Responsible Lending, "Predatory lending describes unfair, deceptive, or fraudulent practices of lenders during the loan origination process." So, when we talk about predatory loans, we're talking about loans originated with any or all of the following being involved...''