Victims of Mortgage Fraud: Credit Union

Showing posts with label Credit Union. Show all posts

Sunday, July 31, 2011

IT'S TIME TO SWITCH YOUR MONEY TO YOUR LOCAL BANK OR CREDIT UNION. DO NOT SUPPORT BIG BANKS.

THE INEVITABILITY OF THE BREAK-UP OF BIG BANKS

Posted on July 31, 2011 by Neil Garfield

MOST POPULAR ARTICLES

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

Once Unthinkable, Breakup of Big Banks Now Seems Feasible

EDITOR’S NOTE: Nothing can stop it because the fact remains and gets clearer every day that a large part of what these banks are calling their “assets” in reports to the public and to shareholders is pure fiction.
There are 7,000 community banks and credit unions around the country that are connected to the exact same backbone for electronic funds transfer and clearance as the Mega Banks. The only thing the Mega banks is a marketing advantage. They have done a pretty good job of raising barriers to entry in deployment of ATMs by manipulating the associations that provide network connections. That advantage is slipping away and ATM fees may well start falling soon as community banks use the old ATM Scrip terminal as Point of Banking.
It is a question of time. Will it happen sooner or later? I don’t know. But I will tell you that based upon historical events, when the big banks fail it will be with a bang and not with a whimper. Politicians will be looking for connections with an industry that is no longer the same.

by Jesse Eisinger
ProPublica, July 27, 2011, 3:50 p.m.

Note: The Trade is not subject to our Creative Commons license.

What was made can be unmade.

JPMorgan Chase and Wells Fargo may have venerable names, but they and the pseudo-venerable Citigroup and Bank of America are all products of countless mergers and agglomerations.

About The Trade

In this column, co-published with New York Times’ DealBook, I monitor the financial markets to hold companies, executives and government officials accountable for their actions. Tips? Praise? Contact me at jesse@propublica.org

There is no rule of markets that requires a financial system dominated by four cobbled-together, lumbering behemoths.

Lawmakers and regulators have failed to remake our system with smaller, safer institutions. What about investors?

Big bank stocks have been persistently weak, making breakups that seemed politically impossible no longer unthinkable.

Bank of America’s recent quarterly earnings were so weak that investors and commentators wondered whether the bank should sell off Merrill Lynch [1], the investment bank for which it foolishly overpaid at the height of the crisis. Bank of America trades at half of its book value (the stated value of its assets minus its liabilities), an indication that investors view its asset quality and prospects just a notch below abominable, as Jonathan Weil of Bloomberg News pointed out [2] last week.

For Bank of America, the question is whether it will have to raise capital. Selling shares at such depressed prices would be costly. Regulators won’t push for it. They just gave stress tests to the biggest banks and merely restricted the bank from paying out a dividend. The logical solution is that Bank of America shed business lines in a bid to improve its prospects in the eyes of Wall Street.

Citigroup’s stock, revenue and earnings have lagged for a decade.

“Look, if you can’t compete in the major leagues for over a decade, it’s time to go back to the minors,” said the always outspoken Mike Mayo, an analyst with CLSA. His chronicle of ruffling bank management feathers, “Exile on Wall Street” (Wiley), will be published in the fall.

JPMorgan Chase is as well managed as any gargantuan bank can be. But if you look at its businesses, it’s hard to see any area where it is clearly the best, something even its own executives concede. Not in credit cards, where the premier name is American Express. Not in money management, where you might offer up T. Rowe Price. Investment banking—Goldman Sachs (the last quarter notwithstanding). Back-office transactions, State Street.

Yet even JPMorgan is merely trading at book value. Put another way, the market regards the value that JPMorgan provides as a financial services conglomerate as zilch. How well do all of JPMorgan’s divisions work together? In presentations [3] toinvestors [4], JPMorgan executives show how much revenue they gain from existing clients. But these measures are hardly unbiased. Executives have an incentive to defend their empires. Who is to say that a certain division of JPMorgan wouldn’t have won that business anyway? And nobody measures how much a bank loses through conflicts of interest.

Even in the face of investor pressure, there are forces that would hold bank breakups back. Mainly pay.

“The biggest motivation for not breaking up is that top managers would earn less,” Mayo said. “That is part of the breakdown in the owner/manager relationship. That’s a breakdown in capitalism.”

Institutional investors—the major owners of the banks—are passive and conflicted. They don’t like to go public with complaints. They have extensive business ties with the banks. The few hedge fund activist investors who aren’t cowed would most likely balk at taking on such an enormous target.

Also, there are reasons to think that smaller banks wouldn’t necessarily make the system safer. A wave of small bank failures can have systemic effects, as was the case in the Great Depression. Focused companies like Washington Mutual and Bear Stearns failed in the recent crisis, worsening it.

Making a nuanced argument [5], John Hempton, a blogger, investor and former regulator in Australia, says that it’s better for shareholders—and societies—to have large banks with lots of market power. That makes them more profitable and leads them to take less risk, making them safer and more enticing for investors.

Another oft-trotted-out argument against breakups: The United States needs global banks to service its giant, multinational corporations and to preserve our position in world markets.

Color me unconvinced. When a giant corporation wants to do a major bond offering or a big company goes public, the banks, despite their size, don’t want to shoulder all the risk themselves, preferring to share the responsibility.

If the stocks continue to lag for quarters upon years, these arguments will seem less convincing, while institutional reluctance will begin to erode.

Investors don’t care about size, they care about performance. It’s undeniable that smaller banks are easier to manage. And they are easier for regulators to unwind—and therefore less terrifying to trading partners—when they fail.

One of the most remarkable aspects of the debate about overhauling the financial system after the great crisis was the absence of serious contemplation of breaking up the largest banks.

It’s not a perfect solution. Banks responding to investor pressure would react haphazardly. But it’s a good start.

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor,Mortgage, securities fraud Tagged: | bankruptcy, borrower, countrywide, disclosure,foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee,WEISBAND

« Price Sheets Continue to State Services for “Correcting” Official Records

Be the first to like this post.

2 Responses

Jan van Eck, on July 31, 2011 at 5:47 am said:
Specifically as to Bank of America, any bank that trades at one-half of book value is not going to “raise capital” by selling new shares; the dilution would provoke an uproar with the existing shareholders (and lawsuits against managers). It is not going to sell Merrill Lynch, as that would require booking a huge loss. Besides, Merrill is now turning a small positive cash flow. It cannot “down-size” as there is no market for assets such as retail bank branches. So it can do nothing.
In effect, BofA and Citigroup are the American version of the Japanese “zombie” corporations, entities that can never pull themselves out of the mud and cannot be either broken up or resuscitated, so they continue indefinitely as the walking dead. They survive only because of the disguised largess of the taxpayers – in this case, by a Fed discount rate of 1/4 point allowing the Banks to float the federal money back out at whatever it will fetch, and using the difference to pay for operating expenses.
The only way I can see that they would be broken up is through the bankruptcy courts. The managers will never do that, as then they will be out of a job. So they will be the zombie banks, forever.
Geanette, on July 31, 2011 at 5:08 am said:
Any business entity that has gotten to big to fail is too big to exist and must be broken down as these business structures are detremental to the health, survival and existence of the American and as well as world economy!

Tuesday, March 8, 2011

Dear God, Please Help Hurting Homeowners.

Kelly,

After the torture of 14 months of trying to get any concession from WFHM, on
Thursday last week a FEDEX truck pulled up and gave me an offer from WFHM to
reduce the percentage of our loan by ONE PERCENTAGE POINT. But they charged
us 15,000. For the reduced interest rate. I about flipped my lid. They took
my payments all throughout 2010 and didn't apply any of the 15,000+ payments
to the principal. Choosing to put the funds in a FROZEN account that wasn't
applied to our loan, only partial payments to the arrearages in the TAX
ESCROW account.

[Editors Note: I've been receiving A LOT of complaints about these "frozen account" games played by Wells Fargo, where Wells ends up foreclosing and keeps all the payments that were put into the "frozen" account.]

I have been working on getting the offer from our bank since July
2010 and I finally got their offer letter in time for the Congressman's
workshop. I thought that was the best place to submit it.

It was surreal at the conference because the 200 or so troubled homeowners
were sitting looking at a table of 8 speakers who all spouted all the things
the government is doing to help us. Treasury, The IRS, Consumer Affairs and
the Department of Corporations all spoke of their programs to help
homeowners in distress. The Congressman and Assemblyman were also there.

Behind us were a blue line of cops. (perhaps 12-16 in total) I can only
assume they were protecting the speakers from the homeowners. Then behind
the cops were the bank representatives. WFHM, BofA and CHASE were there with
computers and fax machines.

Oddly, the banks weren't offering ANY of the programs the panel spoke of.
Troubled homeowners were taken one by one to the reps. No person from the
banks was over 25. A bunch of kids that never bought a home or signed a loan
doc. were standing in judgment of us. The one that helped me said that WFHM
wouldn't even consider a principal reduction. She said I had to refuse the
current mod offer before she would submit the another offer, so I
agreed to refuse the only offer WF had given to us. I got so upset that I
almost passed out from spiking blood pressure. My health has really been
suffering from the hardships over this last year and I became very wobbly
when I got upset. I started to have a panic attack right there. I was able
to keep it together and get the offer submitted, but I almost flipped out
all over the little girl attempting to assist me. My hand shaking as I
handed her the paperwork and tears welling up in my eyes, my papers were
faxed to WFHM. I retreated to my home for a long cry.

Now I may need to proceed with litigation if they refuse my offer. I'm not
sure I can hold up to all this. This problem has almost killed me. I
contacted an attorney to warn him of the damages and potential deadly
outcome from WFHM pain. They are fiddling with peoples lives and they don't
care one wit about us, they only want our money and assets.

I saw the doctor yesterday and confirmed my Hypertension. (BP 160/120) I'm
on meds but I need to keep my emotions under control before I explode.

The banks are killing people and robbing their homes. Isn't it a crime to
kill someone for money and property? Isn't it usury to charge 19,000. For a
ONE POINT reduction in interest after 14 months of begging?

I feel like a gladiator, but I'm so wounded from this battle I wonder what
will the final outcome be? Modification or death? If I die I want the
lawsuit to continue because people shouldn't have to pay with their lives to
keep their home.

Thanks for caring and listening.

[name removed]

Dear Kelly,

It is a river of tears the banks are creating in this country. There was one homeowner who was extremely ill and had to leave with police assistance. It’s really scary. We really need genuine help now, but what we’re getting is hyperbole and posturing. Then the banks do whatever they want with us. I feel like a flea inside the endless stomachs of a giant beast that doesn’t even know I’m there.

[Editors Note: I really need to hear some good news. The Attorneys General decision sucks.]

http://livinglies.wordpress.com/2011/03/08/taking-justice-off-the-table-2-cent-settlement/

TAKING JUSTICE OFF THE TABLE - 2 CENT SETTLEMENT
Neil Garfield | March 8, 2011 at 8:51 am | Categories: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | URL: http://wp.me/p7SnH-3fS

NO SEATS FOR HOMEOWNERS AT BARGAINING TABLE
And because Wall Street controls the message, drowning out the facts, most people are going to believe that this is just too complicated to resolve and that $20 billion is better than nothing. Actually it isn't. By going that low, we are assuring the mutual destruction of virtually every state and local budget for decades to come. We are assuring the impossibility of a jobs recovery. We are finally giving Wall Street our unconditional surrender to their supreme right of governance.-- Neil Garfield

EDITOR'S NOTE:
The talk is a settlement of $20 billion. They don't want to correct the principal balances to fair market value, which would be taking 15%-75% of every loan out of Wall Street's pocket when they misrepresented the value of the property. The reason they say is that it would be windfall reward for stupid greedy homeowners who simply made a bad deal and now can't or won't pay for it.

But they WILL take a total of .01% out of their pockets and call it a day. So for every $20,000 they stole the "big" settlement is going to be that they have to put 2 cents on the table. So the windfall reward for being stupid, fraudulent, and greedy goes to and stays with Wall Street.

Collectively we have all lost around $20 trillion when you put pencil to paper and figure out the losses to the taxpayers, homeowners, pensioners, federal, state and local governments. And the AG's think that 2 cents is enough because when you do the multiplication $20 billion sounds like a big number. Well, it doesn't sounds big to me. It may be good politics and PR but it doesn't do anything for the housing market, the consumer, the economy, or our standing in the world of finance.

If there was any doubt in your mind about who is running the show, think about how the attorneys general of all 50 states could agree for all the states to accept the bankruptcy of their citizens, and their federal, state and local governments. Seems to me that the Tobacco company settlement was more than 10 times that amount and the computed losses were much lower to the states --- because they didn't have the clout. The banks have the edge here not because of unequal bargaining but because there wasn't any bargaining at all. The whole script, like everything else, was choreographed and carefully written by Wall Street.

And because Wall Street controls the message, drowning out the facts, most people are going to believe that this is just too complicated to resolve and that $20 billion is better than nothing. Actually it isn't. By going that low, we are assuring the mutual destruction of virtually every state and local budget for decades to come. We are assuring the impossibility of a jobs recovery. We are finally giving Wall Street our unconditional surrender to their supreme right of governance.

Foreclose Deal Near, State Officials Say
By NELSON D. SCHWARTZ

NY Times

WASHINGTON — A broad agreement could be struck within two months to overhaul how millions of foreclosures are handled by the nation’s biggest banks and to expand the use of home loan modifications, according to Tom Miller, the attorney general of Iowa.

All 50 state attorneys general, along with federal regulators, have been stepping up pressure on the mortgage servicers over their foreclosure lapses in recent days and presented them with an outline of a settlement late last week. But when Mr. Miller made his comments at a press conference here on Monday, it was the first time officials have said when an agreement might come.

“I’m hoping we can wrap it up in a couple of months,” he said. “That’s a hope, but we’re going to move as fast as we can.”

There have been reports that a broad settlement with the banks was imminent, but Mr. Miller played down that prospect, citing thorny issues like the question of just which homeowners should benefit from the proceeds of any settlement.

The attorneys general and federal government agencies are pressing for a financial settlement that could total over $20 billion. When asked about these estimates, Mr. Miller and three other attorneys general declined to comment on Monday.

While the attorneys general and the newly created Consumer Financial Protection Bureau support such a fund for homeowner relief, there has been growing criticism of the government’s existing program to modify mortgages, known as the Home Affordable Modification Program. Last week, Republicans in the House pushed to kill the program, which has helped far fewer homeowners than promised.

A fund with at least $20 billion would represent a sharp expansion of modification efforts for the more than four million Americans facing the loss of their homes.

Many more Americans have mortgage loans that exceed the value of their homes because of falling housing prices, and critics warn that if an aid program is too generous, it could encourage borrowers to walk away from their homes.

Mr. Miller said the attorneys general were “very concerned of people taking advantage” of any program intended to help people facing the loss of their homes.

What is more, determining exactly who to help will be a “hot point” as various government regulators and the attorneys general try to reach a settlement with the banks, according to Roy Cooper, the attorney general for North Carolina.

“We don’t want to stop foreclosures on homes that should be foreclosed,” Mr. Cooper added, a tacit acknowledgement that too broad a modification effort could cause the housing market to grind to a halt, and delay any broad recovery in home prices for several years.

Major servicers, including Bank of America, Citigroup, Wells Fargo and JPMorgan Chase, all declined to comment last week. However, in recent financial filings with the Securities and Exchange Commission, several big banks warned that the continuing regulatory investigations could have a significant effect on their results.

As expensive as a settlement could be for the big banks, industry lobbyists in Washington privately say that they are eager to put the issue behind them, especially given the public relations fallout from a protracted fight with the government.

And though the banks have said that the number of actual victims of foreclosure abuses is small, it is likely that any settlement will force them to acknowledge broader problems with their procedures.

“The servicers themselves acknowledge there have been very serious problems in foreclosure servicing,” said John Suthers, the attorney general of Colorado. “They know there are problems.”

Since last fall, the nation’s biggest mortgage servicers have been under investigation by all 50 state attorneys general, after a nationwide furor was set off by revelations that documents in many foreclosure cases were signed with only a cursory review, a practice known as robo-signing.

Settlement talks are running on two tracks. The attorneys generals, backed up by a host of federal agencies, last week presented the five biggest mortgage servicers with a 27-page draft settlement proposal that could profoundly change how homeowners in default are treated.

The attorneys general, the federal consumer bureau and the Federal Deposit Insurance Corporation are also pushing for a large monetary settlement from the servicers. Much of that money would be used to modify the loan terms for borrowers who are delinquent or facing foreclosure, perhaps reducing the interest rate or the principal to lower monthly payments.

But regulators disagree over how big that settlement should be. The Office of the Comptroller of the Currency and the Federal Reserve do not favor as large a penalty as the attorneys general and the consumer bureau do.

In addition, Mr. Miller admitted that it was not always clear who had final say in the negotiations. “Nobody’s driving the bus,” he said. “Nobody really has the lead or is in control of this. It’s a real joint effort.”

Under the blueprint presented last week, banks would be prohibited from starting foreclosure proceedings while a borrower was actively trying to lower the interest rate or ease other terms of the home loan.

Any borrower who successfully made three payments in a trial loan modification would be given a permanent modification. When a modification was denied, it would be automatically reviewed by an ombudsman or independent review panel. In addition, banks would have to reward their employees for pursuing modifications over foreclosures, while late fees would be curtailed.