Category Archives: Banking industry

Quelle Surprise! Mortgage Settlement Monitor Advocates Going Easy on Servicers Since We Don’t Dare Ask Them to Spend Money to Meet Their Contractual Obligations

The mortgage settlement looks to be every bit as bad as cynics predicted. The most exacting and detailed reporting on the settlement terms came from attorney Abigail Field, who undertook the painful process of reading the entire agreement and making sense of what the detailed terms meant. And the latest word from the settlement monitor Joseph Smith is yet another confirmation of the settlement process as enforcement theater.

Did Scott Brown Have Patient Zero of the Foreclosure Fraud/Robosigning Scandal, Lender Processing Services, as a Client?

Established Naked Capitalism readers may have noticed that I’ve avoided commenting on the Elizabeth Warren/Scott Brown race in Massachusetts. That’s largely because this is a finance and economics blog, and aside from the fact that the Warren candidacy has led lots of out of state financial firms to pour money into the Brown campaign, the discussion of issues in that particular race hasn’t entered into terrain that would merit a stand-alone post (and Lambert’s able campaign coverage has chronicled their noteworthy dust-ups). And we criticized her decision to run for the Senate; we’ve said repeatedly that there were better uses for her talents and access to media if she wanted to help ordinary Americans.

But in a new post, Adam Levitin raises an issue that warrants more disclosure from Brown.

Robert Jenkins: Puncturing Bankers’ Myths

In this speech,Robert Jenkins of the Bank of England blows apart the self-serving myths that ‘old guard’ bankers and their lobbyists have been peddling since the financial crisis ripped apart the global financial system in 2007.

On FICO’s Dubious Explanation of Why it Treats Short Sales the Same as Foreclosures

April Charney sent me a link to a post which had a condescending explanation of a recent piece by FICO that warrants further discussion. The FICO article attempted to justify its position that someone who enters into a short sale gets his credit score dinged as badly as for a foreclosure. Yes, you read that correctly. One of the reasons many borrowers go to the effort to arrange a short sale, as opposed to the faster and easier process of “jingle mail” is that they assume that the damage to their credit score will be lower.

Here is the rationale….

Sheila Bair Gives Her Account of the Crisis, and (Quelle Surprise!) the Bailouts and Geithner Do Not Look Pretty

Sheila Bair’s new book Bull by the Horns is out and based on early reports, it looks like it skewers the bailouts in general and Tim Geithner in particular. But it also gets a lot into the weeds in what still needs to be fixed in bank-land, which is a part of these crisis post-mortems and retrospectives that too often get short shrift.

Bank of America Offers Mods with a Gag Order to Buy Silence

It’s hard to tell whether the situation described in an article the New Haven Register is very unusual, or just under the radar by design. But either way, it does not pass the smell test.

Michael Hudson: QE3 – Another Fed Giveaway to the Banks

In this Real News Network interview, Michael Hudson gives a high level discussion of why the Fed’s claim that QE3 will help employment needs to be taken with a fistful of salt.

FHFA to States that Uphold the Rule of Law: Drop Dead

If you had any doubt that the ongoing coup by bankers and their allies was proceeding apace, the latest story from Shahien Nasiripour of the Financial Times should settle all doubts.

Yes, Really, Truly, No Joke, That Schneiderman Mortgage Task Force is Gonna Get Someone….Soon!

I’m sure the banksters are quaking in their boots. Eric Schneiderman, the New York state attorney general whose joining a heretofore moribund mortgage fraud task force and withdrawing from opposition to the horrid mortgage settlement allowed the Administration to push the bank-friendy deal across the line, is now making noises that really, truly, he and his Federal best buddies are gonna nail some baddies really soon. From Reuters:

Mirabile Dictu! Bloomberg Finally Notices Deposit Flight, a Major Threat to the Eurozone

On the one hand, given that the Eurozone remains a major economic and financial flashpoint, it is good to see a major news service like Bloomberg provide a lengthy report on a continuing existential threat, that of deposit flight, or as we have described it, a slow motion bank run. But it’s a bit surprising it has taken them this long to take notice.

Mirable Dictu! Has Someone Noticed the IRS isn’t Enforcing Tax Laws in the Mortgage-Industrial Complex?

Reader Deontos highlighted a post on Reuters by two Brooklyn Law School professors, Bradley Borden and David Reiss, on a subject near and dear to our hearts, the abject failure of the IRS to take interest in widespread, probably pervasive, violations of REMIC, the part of the Federal tax code that governs mortgage securitizations.

The reason this matters is that this situation belies on of the Administration’s pet claims, that its hands were tied as far as addressing the foreclosure mess was concerned because it had no leverage over servicers. As we’ll discuss, in fact the Administration has a nuclear weapon in its hands that it is simply refusing to use.

Ian Fraser: UK Bank Regulator, FSA, Protects Powerful Cronies and Undermines Proper Bank Reform

By Ian Fraser, a financial journalist who blogs at his web site and at qfinance. His Twitter is @ian_fraser.

The UK’s failed regulator, the Financial Services Authority, is up to its old tricks again. Last week, it sought to scapegoat just one of the 16 directors who drove the awesomely badly managed British bank Halifax Bank of Scotland into the ground. And all he received was a £500,000 fine and a lifetime ban from working in the financial sector.

Michael Hudson on How Finance Capital Leads to Debt Servitude

This edited transcript is expanded from a live phone interview with Michael Hudson by Dimitris Yannopoulos for Athens News. It summarizes some of the major themes from Hudson’s new book, The Bubble and Beyond: Fictitious Capital, Debt Deflation and Global Crisis, which is available on Amazon.

Q: How has the financial system evolved into the form of economic servitude that you call “debt peonage” in your book, implying a negation of democracy as well as free-market capitalism as classically understood?

Is QE3 Yet Another Stealth Bank Bailout?

It’s difficult to puzzle out what Bernanke thinks he is accomplishing with QE3. The level of bond buying, as various commentators have pointed out, is much lower than in the earlier QE programs. And pulling out bigger guns in the past was not terribly productive. As we wrote in April 2011 in a post titled “Mirabile Dictu! Economists Agree All the Fed Has Done is Goose Financial Markets!“: