NO PRESIDENT IN HISTORY HAS TAKEN MORE LOOT FROM
CRIMINAL BANKSTER DONORS THAN OBAMA. HE PROMISED HIS BANKSTERS NO CRIMINAL
PROSECUTION, AND NO REAL REGULATION.
PROFITS FOR BANKSTERS HAVE SOARED UNDER OBAMA, JUST
AS FORECLOSURES HAVE. DURING HIS FIRST 2 YEARS THE BANKSTERS MADE MORE LOOT
THAN ALL 8 UNDER BUSH!
WHAT DOES THAT TELL YOU?
*
"In general,
these are professional prognosticators," said Ritsch. "And they may
be putting their money on the person they predict will win, not the candidate
they hope will win."
Records show that
four out of Obama's top five contributors are employees of financial industry
giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207)
and Citigroup ($358,054).
*
HERE’S A GREAT EXAMPLE OF CRIMINAL BANKSTERS. WELLS
FARGO HAS HAD THEIR CA MORTGAGE LICENSE REVOKED SINCE 2003. YES, THEY STILL
SCAM PEOPLE WITH THEIR MORTGAGE PRODUCTS WITHOUT A LICENSE. THE CRIMINAL
BANKSTER SIMPLY DECLARED ITSELF ABOVE THE LAW, AND WENT ON FUCKING OVER A
NATION WITH THEIR MORTGAGE PRODUCTS. THE TAX PAYERS BAILED THEM OUT WHEN THE
FIGURES NO LONGER LOOKED GOOD!
WELLS FARGO IS A MAJOR DONOR TO THE MEXICAN FASCIST
PARTY of LA RAZA, AND HAS PAID STAGGERING FINES FOR BEING THE BANKSTERS TO THE
MEXICAN DRUG CARTELS!
IF YOU’VE EVER BEEN IN A WELLS FARGO, YOU WILL BE
UNLIKELY TO FIND AN AMERICAN BORN EMPLOYEE. YOU WILL FIND LINES OF ILLEGALS
WAVING THEIR PHONY MEX CONSULATE I.D.
WELLS FARGO IS ALSO THE BIGGEST FINANCIERS OF PAY
DAY LOAN SHARKS!
Latimes.com
Mortgage-aid revisions paying off for lenders and some borrowers
Changes to streamline the Home Affordable Refinance Program are helping some underwater homeowners get lower-interest loans. Those still-above-market rates, meanwhile, are boosting banks' profits.
By E. Scott Reckard, Los Angeles TimesMay 9, 2012
The revisions to the Obama administration's 3-year-old Home Affordable Refinance Program have yielded mixed results for homeowners, analysts and mortgage professionals say.
Some responsible homeowners are indeed getting lower-interest loans despite owing far more than their homes are worth. But others have loans that don't qualify, or must jump through hoops the plan was supposed to eliminate, such as on-site appraisals and extensive paperwork.
What's more, critics say, homeowners who get new loans are being stuck with higher rates than necessary, often half a percentage point or more. That's because banks are refinancing only their own borrowers, instead of competing against one another, which would drive rates down.
"The banks should charge lower than the market interest rate because the new version of the program means less work and less risk for them. Instead, they are charging more," said Amherst Securities analyst Laurie Goodman, who titled a recent report on the program "And the Winner Is ... the Largest Banks."
The program is a key part of President Obama's efforts to bolster the ravaged housing market. Administration officials including Housing and Urban Development Secretary Shaun Donovan are pressuring Congress to pass a law enabling the program to be used to help more homeowners.
"There's a real urgency here because interest rates today are at the lowest level they have ever been," Donovan testified Tuesday before the Senate Banking Committee. "But as the economy continues to improve, the expectations are this window of record low interest rates may not last for a long time."
In response, Sens. Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) said Tuesday that they would introduce legislation this week to extend streamlined refinancing to all underwater Fannie and Freddie borrowers and eliminate appraisal and upfront fees for homeowners using the program to obtain new loans.
The Home Affordable Refinance Program is less controversial than relief plans for delinquent borrowers. Few have objected to its goal of helping homeowners who pay their loans on time but can't refinance at today's record low rates because their home values have plummeted.
To qualify, borrowers must owe more than 80% of the current home value. They can't have missed a payment for the last six months and are allowed to have been late by 30 days only once in the last year.
As this year began, nearly 1 million loans had been replaced using the program, but only 1 in 10 had balances higher than 105% of the home value. The changes, phased in during the first quarter, aim to encourage refinances no matter how far underwater the loan is.
The program is for loans owned or backed by Fannie Mae and Freddie Mac, the government-supported mortgage buyers that handle 60% of U.S. home loans. It works by having mortgage customer-service providers, which are mainly arms of banks, refinance borrowers into new loans that are sold to Fannie or Freddie.
Because Fannie and Freddie already are stuck with the losses if the existing loans go bad, the thinking goes, substituting lower-interest new mortgages actually reduces everyone's risk. The homeowners have hundreds of dollars more each month, which makes them less likely to default — a boon to their local housing markets and a lift for the economy when they spend their extra cash.
The problem, Goodman said, is that the streamlined program minimizes processing costs for the existing loan servicers but not for competitors, who must collect nearly as much information about borrowers as though they were writing new loans.
The program also exempts existing servicers from having to reimburse Fannie and Freddie for losses on certain flawed mortgages — a multibillion-dollar problem these last few years for the big banks — while requiring competitors to bear that same risk.
President Obama envisioned a different scenario when he announced the revised program last fall.
"These changes are going to encourage other lenders to compete for that business by offering better terms and rates," he said. "And eligible homeowners are going to be able to shop around for the best rates and the best terms."
That wasn't the experience of Johnny James, who bought a Gardena condominium with a 20% down payment during the housing bubble and now owes $414,000 on a home Fannie Mae says is worth $266,000.
James and his wife, Yolanda Hatcher, have full-time jobs with Los Angeles County and excellent credit ratings. Since they hadn't missed payments on their Fannie Mae loan, they thought they were good candidates for a lower-interest refi.
But their servicer, Seterus Inc., said it was just a bill collector, not a lender. Their original lender, JPMorgan Chase & Co., said it would refinance only loans it is currently servicing. Wells Fargo & Co. said the same, and online mortgage specialist Quicken Loans said the condo was too far underwater to refinance.
"There's not a lot of help out there for folks like us," James said.
The couple turned to mortgage broker Jeff Lazerson, who said he submitted applications to eight lenders and found only one that would refinance them. The pending deal, which would cut their rate to 4.63% from 6.25%, was made after they fully documented their income and assets and paid for an on-site appraisal.
"This program has been billed as a worry-free way for responsible people to get a break on rates even if they're way underwater," said Lazerson, president of Mortgage Grader in Laguna Niguel. "From where I sit, it's a disaster."
James Parrott, senior advisor on housing at the White House's National Economic Council, said that even in its imperfect current version, the program would aid many of the half million or so borrowers who have applied to refinance since the latest revisions were made.
"Those people get dropped from 6% or 7% loans to somewhere around 4%," he said. "They will have hundreds of dollars more for themselves every month and thousands of dollars a year."
While proponents say the program makes winners out of all hands, it is not without detractors.
Alexandria, Va., banking consultant Bert Ely said easy-qualifier loans "are what got us into this mess in the first place" and that waiving legal liabilities for banks could result in another round of mortgage headaches in 2013 and beyond.
"What the government is sanctioning is kicking the can down the road, again," he said.
Like other administration plans to bolster housing, the voluntary Home Affordable Refinance Program had underperformed until recently. Lenders rarely refinanced loans bigger than 105% of the home's value even though they were permitted to go to 125%.
But that changed as the new rules loosened restrictions and did away with the 125% cap. Applications for these refinances rocketed from less than 5% of the mortgage market in December "to close to 25% and rising," Nomura Securities analyst Brian Foran wrote in a recent report.
The loans are more profitable as well. In the past, Foran said, lenders typically made 2% of the loan amount when selling a loan to Fannie or Freddie, so a $350,000 loan might yield $7,000 in revenue.
Because the banks are charging higher than market interest rates for loans made under the program, the mortgages are more valuable to investors and sell for more. The banks are typically making an extra 2% of the loan amount, Foran said — another $7,000 on the $350,000 loan, money that drops to the bottom line.
By Foran's calculations, writing more loans at higher profit could yield $12 billion in additional revenue for lenders.
All the big banks showed unexpected jumps in their first-quarter mortgage profits, in large part because of the revised government program, said Keefe, Bruyette & Woods research director Frederick Cannon.
"Interesting that [the program] would be so good for banks," he said.
October 10, 2009
Talking Business
Have Banks No Shame? No,
they have obama!
A few months ago, I
asked Simon Johnson, the former International Monetary
Fund economist, now a
prominent critic of the banking industry, what he thought the banks owed the
country after all the government bailouts.
“They can’t pay what
they owe!” he began angrily. Then he paused, collected his thoughts and started
over: “Tim Geithner saved them on terms extremely favorable to the banks. They should
support all of his proposed reforms.”
Mr. Johnson continued,
“What gets me is that the banks have continued to oppose consumer protection.
How can they be opposed to consumer protection as defined by a man who is the
most favorable Treasury secretary they have had in a generation? If he
has decided that this is what they need, what moral right do they have to
oppose it? It is unconscionable.”
I couldn’t have said it
better myself.
•
Starting on Wednesday,
the House Financial Services Committee will take up a number of reforms
proposed by the Obama administration, hoping to push them through the committee
so they can be voted on the House floor as part of a larger financial reform
package. Among the proposals the committee will tackle is, yes, the
establishment of a new consumer financial protection agency.
The administration’s
outline for this new agency — which would regulate mortgages, credit cards, debit cards, installment loans and any other product issued by a
financial institution — was sent up to Capitol Hill in July. Since then, Barney Frank, the committee chairman, has made a number of substantial
changes, none of which, I have to say, have strengthened the proposed
legislation. He stripped the bill of the much-promoted “plain vanilla”
provision, which would have forced, say, mortgage brokers to offer customers a
30-year fixed mortgage alongside any exotic option A.R.M. mortgage they wanted
to push.
He has changed the
nature of an oversight panel, so that it would consist of the top bank
regulators — the very same regulators who did such a miserable job looking out
for consumers during the housing bubble. He has tinkered with the way the
agency will be financed, making it less onerous for the banking industry and
more onerous for nonbank financial institutions that will come under the
agency’s purview.
Saddest of all — at
least from where I’m sitting — he abandoned the so-called reasonableness
standard, which would have forced bankers to make sure their customers both
understood the products they were buying and could afford them. Mr. Frank has
said that such a provision would put bankers in an “untenable position.” Yet
that is precisely what brokers are required to do when they sell a stock or a
bond to their customers. Why shouldn’t the same standard apply to a banker
making a mortgage loan?
Part of the reason Mr.
Frank made those changes is that he needs the support of conservative Democrats
if he hopes to turn this bill into law. But it is also because he felt a need
to mollify, at least to some extent, the bank lobby, especially the community
bankers who populate every Congressional district in the country. Indeed, in a
recent missive to its members, the American Bankers Association trumpeted its
success in helping make the bill more palatable to the banking industry.
Yet even now, despite
its success in reining in the proposed agency, the banking industry is still
lobbying fiercely against it. Edward L. Yingling, the president of A.B.A.,
borrowed a line from “Casablanca” to describe the impulse behind the proposed
consumer agency. “They’re rounding up the usual suspects,” he complained to me
the other day. “We’re the usual suspects.”
Not long ago, the A.B.A.
sent an “action alert” to its member banks, pleading with them to call their
congressman in a last-ditch effort to stop the bill. (“Passing more laws that
will overly complicate and restrict the products our customers need is
detrimental to our banks,” the note read in part.) And even if the bill does
pass, the industry is hoping to pervert its purpose, so that it will become a
means to stifle competition from nonbank financial institutions.
To which one can only
ask: Have they no shame?
•
“There needs to be more
focus on consumers,” Mr. Yingling insisted. “We agree with that.”
Whenever you talk to
bankers or their lobbyists about the proposed agency, you hear some variation
of what I’ve come to think of as the party line. It’s not that they’re against
consumer protection, they say. (Heaven forbid!) Rather, they say, this new
agency — larded as it will surely be with thousands of newly deputized bureaucrats,
each one eager to impose burdensome new regulations — is simply not the way to
go about it.
The current bank
regulators, they point out correctly, already have consumer protection as part
of their portfolios. “All they need to do is enforce the regulations already on
the books,” one top banker told me recently. (Like all top bankers these days,
he would speak only anonymously, fearing the wrath of the Treasury.)
What’s more — and this
is the part that is really unbelievable — they insist that bankers weren’t the
cause of the financial crisis. The entities that were peddling all those
awful subprime mortgages were the nonbanks — the mortgage originators and
mortgage brokers — who were almost entirely unregulated. “We have no objection
to them regulating the nonregulated firms,” said Camden R. Fine, the president
of the Independent Community Bankers of America.
Well, of course, he
doesn’t. If the bankers can persuade Congress to change this agency’s mission
so that it only regulates the nonbanks — something they are trying to do, and
which Mr. Frank insists will not be successful — they will have succeeded in
putting sand in the engine of their nonbank competitors.
In fact, nonbank
financial institutions do need to be regulated; they weren’t exactly the good
guys during the housing bubble. But neither were the bankers, something they’ve
conveniently forgotten.
Who do you think was
creating all those subprime mortgages that the brokers and originators were
peddling? The banks, that’s who. I’ve had mortgage brokers tell me how bank
salespeople put enormous pressure on them to ratchet up their sales of, say,
option A.R.M., no-doc mortgages —mortgages the banks were offering, through the
brokers — so they could make the loans and then bundle them to Wall Street for
a hefty fee. Bankers were every bit as complicit in pushing mortgages on customers
who lacked the means to pay them back.
Even now, banks are
engaged in practices that are, at best, dubious, and at worst deceptive. How
about, for instance, those rapacious debit card overdraft fees? My colleagues
Ron Lieber and Andrew Martin have pointed out in recent articles that a decade
ago, such fees barely existed; instead, the card was routinely rejected when a
consumer tried to make a purchase with an empty bank account. Now, whether
customers want overdraft protection or not, most banks cover the purchase and
charge an absurdly high fee for the “privilege.”
No one can doubt that
these fees hurt the very people who can least afford to pay them. (If you have
college-age children, as I do, you know this firsthand.) But none of the
regulators who are now supposed to be looking out for consumers were the least
bit concerned. Only after the articles exposing these practices ran on the
front page of The New York Times did several banks agree to abandon the fees
for small overdrafts. But should it really require newspaper exposés to get
banks to do the right thing?
Alas, without a consumer
agency, that is pretty much what it takes. The real reason current regulators
don’t pay more attention to consumer problems is not that they are evil (well,
mostly they’re not), but that they have another mission that takes priority.
They are charged with insuring the safety and soundness of the banking system.
And safety and soundness means making sure that banks have enough capital — and
are compensating for loan losses. When a bank decides to raise a customer’s
credit card interest rate to 35 percent to make up for losses elsewhere in the
credit card portfolio, that believe it or not, is a good thing from the
perspective of safety and soundness. Even though it is a terrible thing for
consumers.
Which is also why the
bankers’ line about having their current regulators look out for consumers is
so bogus. At the Federal Reserve, consumers will never come first; Alan Greenspan had the power to curb abusive subprime loans,
but he just wasn’t interested. Nor is it any different over at the Office of the Comptroller of the Currency, the nation’s other big bank regulator. Not
long ago, John C. Dugan, the comptroller, gave a speech in which he said —
channeling Mr. Yingling — that the banks had not been responsible for the
financial crisis. Regulators who take their talking points from the American
Bankers Association don’t exactly inspire confidence that they’re looking out
for consumers.
A consumer protection agency,
on the other hand, wouldn’t have that dual mission; its sole goal would be to
try to keep bank — and nonbank — customers from being gouged, deceived or
otherwise taken advantage of. Without question, it would occasionally come into
conflict with the safety and soundness regulators. But that is why that
oversight panel exists: to hash out such conflicts.
There are those who
believe that Mr. Frank’s changes have essentially gutted the bill. John Taylor,
the chief executive of the National Community Reinvestment Coalition, told me
that he now opposed the bill because it had been so watered down.
But most others still
think it is a strong bill. Michael Calhoun, the president of the Center for
Responsible Lending, called it “a reasonably strong bill,” despite the changes.
And although I was worried at first when I saw provisions like plain vanilla
and the reasonableness standard falling by the wayside, I’m now convinced that
the new agency, as currently conceived, can still do a lot of good. It will have
the authority to outlaw unfair products, and to force financial institutions
treat their customers like, well, customers — and not lambs to be slaughtered.
Who could possibly be
against that? Oh, right. The bankers are against it. And just a few days ago, The
Wall Street Journal editorial page, that knee-jerk defender of corporate
interests, came out against it as well.
That clinches it for me.
The sooner we can pass the thing, the better.
*
Foreclosures
Are Often In Lenders' Best Interest
Numbers Work Against Government Efforts To Help Homeowners
Numbers Work Against Government Efforts To Help Homeowners
By
Renae Merle
Washington Post Staff Writer
Tuesday, July 28, 2009
Washington Post Staff Writer
Tuesday, July 28, 2009
Government
initiatives to stem the country's mounting foreclosures are hampered because
banks and other lenders in many cases have more financial incentive to let
borrowers lose their homes than to work out settlements, some economists have
concluded.
Policymakers
often say it's a good deal for lenders to cut borrowers a break on mortgage
payments to keep them in their homes. But, according to researchers and
industry experts, foreclosing can be more profitable.
The
problem is that modifying mortgages is profitable to banks for only one set of
distressed borrowers, while lenders are actually dealing with three very
different types. Modification makes economic sense for a bank or other lender
only if the borrower can't sustain payments without it yet will be able to keep
up with new, more modest terms.
A
second set are those who are likely to fall behind on their payments again even
after receiving a modified loan and are likely to lose their homes one way or
another. Lenders don't want to help these borrowers because waiting to
foreclose can be costly.
Finally,
there are those delinquent borrowers who can somehow, even at great sacrifice,
catch up without a modification. Lenders have little financial incentive to
help them.
These
financial calculations on the part of lenders pose a difficult challenge for
President Obama's ambitious efforts to address the mortgage crisis, which
remains at the heart of the country's economic troubles and continues to upend
millions of lives. Senior officials at the Treasury Department and the
Department of Housing and Urban Development have summoned industry executives
to a meeting Tuesday to discuss how to step up the pace of loan relief. The
administration is seeking to influence lenders' calculus in part by offering
them billions of dollars in incentives to modify home loans.
Still,
foreclosed homes continue to flood the market, forcing down home prices. That contributed
to the unexpectedly large jump in new-home sales in June, reported yesterday by
the Commerce Department.
"There
has been this policy push to use modifications as the tool of choice,"
said Michael Fratantoni, vice president of single-family-home research at the
Mortgage Bankers Association. But "there is going to be this narrow slice
of borrowers for which modifications is the right answer." The size of
that slice is tough to discern, he said. "The industry and policymakers
have been grappling with that."
The
effort to understand the dynamics of the mortgage business comes as the
administration is prodding lenders to do more to help borrowers under its
Making Home Affordable plan, which gives lenders subsidies to lower the
payments for distressed borrowers. About 200,000 homeowners have received
modified loans since the program launched in March, while more than 1.5 million
borrowers were subject during the first half of the year to some form of
foreclosure filings, from default notices to completed foreclosure sales,
according to RealtyTrac.
No
doubt part of the explanation is that lenders are overwhelmed by the volume of
borrowers seeking to modify their mortgages. Rising unemployment and falling
home prices have added to the problem.
But a
study released last month by the Federal Reserve Bank of Boston was downbeat on
the prospects for widespread modifications. The analysis, which looked at the
performance of loans in 2007 and 2008, found that lenders lowered the monthly
payments of only 3 percent of delinquent borrowers, those who had missed at
least two payments. Lenders tried to avoid modifying the loans of borrowers who
could "self-cure," or catch up on their payments without help, and
those who would fall behind again even after receiving help, the study found.
"If
the presence of self-cure risk and redefault risk do make renegotiation less
appealing to investors, the number of easily 'preventable' foreclosures may be
far smaller than many commentators believe," the report said.
Nearly
a third of the borrowers who miss two payments are able to self-cure without
help from their lender, according to the Boston Fed study. Separately, Moody's
Economy.com, a research firm, estimated that about a fifth of those who miss
three payments will self-cure.
When
Adrian Jones fell behind on the mortgage payments for her Dallas home earlier
this year, her lender asked her to cut other expenses. Jones said she
eliminated movies and coffee breaks. She turned to family members for loans.
When that failed to raise enough, she sold her second car.
"It
hurt, but it also made sense. The debt was my responsibility," Jones said.
But
six months later, after catching up on the mortgage, Jones is again feeling
pinched after her hours as an office assistant at an architecture firm were
cut. This time, she's not sure she can fix the problem herself.
"I
am going to try, obviously," she said. "But it is getting harder and
harder."
Like
Jones, those who are most determined to meet their obligations are often
unlikely candidates for loan modifications.
"These
are the people who will get a second job, borrow from their family to keep
up," explained Paul S. Willen, a senior economist at the Federal Reserve
Bank of Boston and an author of its report. ". . . From a cold-blooded
profit-maximizing standpoint, these are the people the banks will help the
least."
Lenders
also worry that borrowers may re-default even after receiving a loan
modification. This only delays foreclosure, which can be costly to the lender
because housing prices are falling
throughout
the country and the home's condition may deteriorate if the owner isn't
maintaining it. In some cases, lenders lose twice as much foreclosing on a home
as they did two years ago, said Laurie Goodman, senior managing director at
Amherst Securities.
American
Home Mortgage Services, based in Texas, was willing to modify Edward Partain's
mortgage on his Tennessee home last April after business at his beauty salon
slowed and a divorce stretched his budget. But after months of negotiating with
his lender, Partain said he was surprised to learn that it would only lower his
payments by $90 a month, instead of the $250 decrease he expected.
"At
$250, I would have had a chance, but after they added in late fees and
payments, I couldn't do it," he said.
Partain
soon fell behind on his payments again and went back to American Home Mortgage
Services seeking a more affordable payment. Partain said he was told that he
was ineligible for another modification because it had been less than a year
since his last. A foreclosure sale was scheduled for late July.
After
American Home Mortgage Services was contacted by The Washington Post about the
case, the company said Partain would be considered for the federal
foreclosure-prevention program and it delayed the sale by three months. Partain
is relieved but anxious about the details.
"You
want to wait and see what figures they come up with," he said.
Administration
officials have not said publicly how many borrowers they expect to re-default
under Obama's program.
But
the experience of a separate program run by the Federal Deposit Insurance Corp.
could be instructive. After taking over the failed bank IndyMac last year, the
FDIC began modifying troubled mortgages held or serviced by the company.
Richard Brown, the FDIC's chief economist, said the agency expects up to 40
percent of those borrowers to re-default.
Even
at that rate, he said, the modification program is more profitable than doing
nothing. "The idea that 30 to 40 percent re-default is a failure to a
program is false," Brown said.
The
administration has estimated that its foreclosure-prevention program would help
3 million to 4 million borrowers by 2012. But lenders' reluctance could limit
the impact to less than half that, said Mark Zandi, chief economist for Moody's
Economy.com. Coupled with re-defaults, this would mean that the number of
people losing their homes to foreclosure could reach nearly 5 million by 2011,
he said.
Mark
A. Calabria, director of financial-regulation studies at the Cato Institute,
warned that political rhetoric is driving the policy discussion. "What we
really need to do is have an honest debate about what are the magnitudes of people
we really can help," he said. But administration officials defended their
program's progress, reporting that it has surpassed an initial goal of offering
20,000 modifications a week. These officials said they have taken into account
the re-default risk and possibility for self-cure in designing the effort.
Michael
S. Barr, assistant Treasury secretary for financial institutions, noted that
the report by the Boston Fed does not cover the period since the administration
launched its initiative. "We will continue to refine the program as new
data becomes available," he said. "We are committed to studying the
effectiveness and efficiency of the program, and we welcome outside
analysis."
Willen,
of the Boston Fed, said the government program could boost several-fold the
number of seriously delinquent borrowers receiving modifications. But so few
people had been getting their loans modified that even a dramatic increase in
the percentage would still touch only a small fraction of troubled borrowers,
he said.
"We're
still not talking about a program that will stop a large number of
foreclosures," he said. "We're talking about a program that, at the
margins, will assist more people. It is unlikely we will see a sea
change."
*
February 11, 2009
Op-Ed Columnist
Trillion Dollar Baby
WASHINGTON
So
much for the savior-based economy.
Tim
Geithner, the learned and laconic civil servant and financial engineer, did not
sweep in and infuse our shaky psyches with confidence. For starters, the
47-year-old’s voice kept cracking.
Escorting
us over the rickety, foggy bridge from TARP to Son of TARP by way of TALF —
don’t ask — Geithner did not, as the president said when he drew on the wisdom
of Fred Astaire, inspire us to pick ourselves up, dust ourselves off and start
all over again.
The
Obama crowd is hung up on the same issues that the Bush crew was hung up on
last September: Which of the potentially $2 or $3 trillion in toxic assets will
the taxpayers buy and what will we pay for them?
Despite
the touting, the Treasury chief unveiled a plan short on illumination,
recrimination, fine points and foreclosure closure. The Dow collapsed on its
fainting couch as Sports Illustrated swimsuit models rang the closing bell.
It
wasn’t only that Geithner’s own tax history — and his time as head of the New
York Fed when all the bad stuff was happening on Wall Street, and when he left
with nearly a half-million in severance — makes him a dubious messenger for the
president’s pledge to keep the haves from further betraying the have-nots.
It
wasn’t only that Americans’ already threadbare trust has been ripped by Hank Paulson’s
mumbo-jumbo and the Democrats’ bad judgment in accessorizing the stimulus bill
with Grammy-level “bling, bling,” as the R.N.C. chairman, Michael Steele,
called it.
The
problem is that the “lost faith” that Geithner talked about in his announcement
Tuesday cannot be restored as long as the taxpayers who are funding these
wayward banks don’t have more control.
Geithner
is not even requiring the banks to lend in return for the $2 trillion his
program will try to marshal, mostly by having the Fed print money out of thin
air, thereby diluting our money, or borrowing more from China. (When, exactly,
can China foreclose on us and start sending us toxic toys again?)
There’s
a weaselly feel to the plan, a sense that tough decisions were postponed even
as President Obama warns about our “perfect storm of financial problems.” The
outrage is going only one way, as we pony up trillion after trillion.
Geithner
is coddling the banks, setting it up so that either we’ll have to pay the banks
inflated prices for poison assets or subsidize investors to pay the banks for
poison assets.
As
Steve Labaton and Ed Andrews wrote in The Times on Tuesday, Geithner won an
internal battle with David Axelrod and other Obama aides who wanted to impose
pay caps on every employee at institutions taking the bailout and set stricter
guidelines on how federal money is spent. Geithner prevailed over those who
wanted to kick out negligent bank executives and wipe out shareholders at
institutions receiving aid.
In a
move that would have made his mentor, Robert Rubin, proud, Geithner beat back
the populists and protected the economic royalists. The new plan offers
insufficient meddling with Wall Street, even though Wall Street shows no sign
that the hardscrabble economy has pierced its Hermès-swathed world.
Wells
Fargo, for instance, which has leeched $25 billion in bailout money, bought an
inadvertently hilarious full-page ad in The Times to whinge about the junkets
to Las Vegas and elsewhere it was forced to cancel because of public outrage.
(The ad in The Times on Sunday could have cost up to $200,000, which may count
as a bailout for our industry.)
“Okay,
time out. Something doesn’t feel right,” John Stumpf, the president and chief
executive of Wells Fargo wrote in an open letter defending their two decades of
four-day employee recognition “events.” Calling them junkets or boondoggles is
“nonsense,” he protested, adding about his employees: “This recognition energizes
them.”
In
this economy, simply having a job should energize them.
Geithner
is wrong. The pay of all the employees in bailed-out banks, not just top
executives, should be capped. And these impervious, imperial suits who squander
taxpayers’ money after dragging the country over the cliff should all be fired
— preferably when they come to D.C. on Wednesday in a phony show of populism on
Amtrak and the shuttle to testify before Barney Frank.
Wall
Street cannot be trusted to change its culture. Just look at the full-page ads
that Bank of America (which got $45 billion) and Citigroup (which got $50
billion) are plastering in newspapers, lavishing taxpayer money on preening
prose.
We
don’t want our money spent, as Citigroup did, to pat itself on the back “as we
navigate the complexities together.” Bank of America cannot get back our trust
by spending more of our cash to assure us that it’s “getting to work” on
getting back our trust.
Just
get back to work and start repaying us.
*
Lou Dobbs Tonight Tuesday July 29,
2008
Despite countless hearings about
manipulative and abusive practices by credit card companies, Congress has
failed to enact a proposed Credit Card Holders Bill of Rights. Rep. Carolyn
Maloney, who has championed the bill, has been told that despite the necessity
of passing the legislation, support is evaporating rapidly, as many are
unwilling to take on the banks.
Lenders Fighting Mortgage Rewrite
Measure Targets Bankrupt Homeowners
1.
By Jeffrey H. BirnbaumWashington Post Staff WriterFriday,
February 22, 2008; D01
The nation's largest lending
institutions are lobbying hard to block a proposal in Congress that would give
bankruptcy judges greater latitude to rewrite mortgages held by financially
strapped homeowners.
The proposal, which could come
to a vote in the Senate as early as next week, is being pushed by Democratic
congressional leaders and a large coalition of groups that includes labor
unions, consumer advocates, civil rights organizations and AARP, the powerful
senior citizens' lobby.
The legislation would allow
bankruptcy judges for the first time to alter the terms of mortgages for
primary residences. Under the proposal, borrowers could declare bankruptcy, and
a judge would be able to reduce the amount they owe as part of resolving their
debts.
Currently, bankruptcy judges
cannot rewrite first mortgages for primary homes. This restriction was adopted
in the 1970s to encourage banks to provide mortgages to new home buyers.
The Democrats and their allies
see the plan as an antidote to the recent mortgage crisis, especially among
low-income borrowers with subprime loans. The legislation would prevent as many
as 600,000 homeowners from being thrown into foreclosure, its advocates say.
"We should be giving
families every reasonable tool to ensure they can keep a roof over their
heads," said Sen. Richard J. Durbin (Ill.), the Senate's second-ranking
Democrat and author of a leading version of the legislation.
But the banks argue that any
help the proposal might provide to troubled homeowners in the short run would
be offset by the higher costs that borrowers would have to pay to get mortgages
in the future. The reason, banks say, is that they would pass along the added
risk to borrowers in the form of higher interest rates, larger down payments or
increased closing costs.
If banks were unable to pass
on the entire cost, they could be forced to trim their profits.
"This provision is
incredibly counterproductive," said Edward L. Yingling, president of the
America Bankers Association. "We will lobby very, very strongly against
it."
The Durbin measure is part of
a larger housing assistance bill being pushed by Democrats in the Senate. A
separate version of the measure was approved late last year, mostly along party
lines, by the House Judiciary Committee. The Bush administration has said that
it opposes both provisions as overly coercive and potentially detrimental to
the already strained mortgage market.
Lobbyists for major banks have
made the proposal's defeat a top priority. They have been meeting at least
weekly to coordinate their efforts and have fanned out on Capitol Hill to meet with
lawmakers and their staffs.
At least a dozen industry
associations have banded together to fight the proposed legislation. They
include the American Bankers Association, the Financial Services Roundtable,
the Consumer Bankers Association and the Mortgage Bankers Association. These
groups and others have signed joint letters to lawmakers on the issue.
In one of their letters, sent
to Senate leaders last week, the groups wrote that the legislation would
"have a very negative impact in the financial markets, which are
struggling in part because of difficulties in valuing the mortgages that
underlay securities [and] would greatly increase the uncertainty that already
exists."
Bank lobbyists have also gone
online to make their case. The mortgage bankers have set up a Web site, http://www.mortgagebankers.org/StopTheCramDown, that can calculate how much
mortgage costs might increase by state and by county if the Durbin measure were
to become law. "Cram down" is the industry term for a forced easing
of mortgage terms.
Supporters of the measure are also
sending letters and meeting with lawmakers. A letter urging a quick vote on the
proposal was delivered to Senate Majority Leader Harry M. Reid (Nev.) last
week. It was signed by 19 organizations, including the Consumer Federation of
America, the AFL-CIO, the National Council of La Raza, the U.S. Conference of
Mayors and AARP.
The letter said, "The
court-supervised modification provision is a commonsense solution that will
help families save their homes without any cost to the U.S. Treasury, while
ensuring that lenders recover at least what they would in a foreclosure."
The Center for Responsible Lending,
a pro-consumer watchdog group that backs Durbin's effort, is trying to
instigate voter e-mails to lawmakers on the subject. The group's Web site
includes a page that allows people to send electronic notes supporting the
measure to their elected representatives with just a few clicks of a mouse.
AARP spokesman Jim Dau said his
group will also ramp up its efforts. It may soon ask its activists to urge
lawmakers to back the mortgage-redrafting legislation. AARP, which is the
nation's largest lobby group, has a list of 1.5 million volunteers whom it says
it can call upon to contact lawmakers on legislative matters.
Wells Fargo Discrimination (San Francisco)
Reply to: info@wellsfargoinjustice.com
Date: 2008‑04‑16, 6:16AM PDT
Discrimination, Customer Data Privacy & Security at
Wells Fargo
Several former employees of Wells Fargo have created a
website and blog at www.wellsfargoinjustice.com to document real and perceived
employment discrimination or disability discrimination at Wells Fargo and to
discuss customer data privacy and security issues at Wells Fargo. Several
people have submitted their stories to the site, but more narratives are needed
and requested. Your contribution is welcome!
Contributors' names and contact information will be kept
confidential and will not be disclosed on this website or through any other
means. For privacy and legal reasons, contributors are encouraged to disguise
or mask any information which might identity themselves or any other
individuals. However, please include a current email address so we may directly
contact you if further information or clarification is needed.
We appreciate your input and support!
Contact Information
Team Member
info@wellsfargoinjustice.com
Links
Wells Fargo Injustice
www.wellsfargoinjustice.com
January 8, 2008
Baltimore Is Suing Bank Over Foreclosure Crisis
By GRETCHEN MORGENSON
Baltimore’s mayor and City Council are suing Wells Fargo
Bank, contending that its lending practices discriminated against black
borrowers and led to a wave of foreclosures that has reduced city tax revenues
and increased its costs.
The recent surge in homeowner defaults nationwide,
generated by lax lending practices during the real estate boom, has officials
bracing for a range of problems that often accompany foreclosures. Some
municipalities, including Cleveland and Buffalo, are trying to make lenders
responsible for abandoned properties to ward off crimes like arson, drug use
and prostitution.
But the civil suit that officials in Baltimore are filing
in United States District Court may presage another type of litigation against
lenders by municipalities facing shortfalls in their budgets.
In the suit, Mayor Sheila Dixon joined with the City
Council to ask that the court bar Wells Fargo from charging higher fees to black borrowers. Many of
these borrowers paid more under the bank’s subprime lending program, designed
for less creditworthy consumers, and are more likely to default on their loans.
In 2006, Wells Fargo made high-cost loans, with an interest
rate at least three percentage points above a federal benchmark, to 65 percent
of its black customers in Baltimore and to only 15 percent of its white
customers in the area, according to the lawsuit. Similarly, refinancings to
black borrowers were more likely to be higher cost than to white ones and to
carry prepayment penalties.
The complaint requests unspecified damages to cover the
diminished property tax revenues and higher costs that the city said it had
incurred. Additional costs include those for fire and police protection in hard-hit
neighborhoods and expenditures to buy and rehabilitate vacant properties.
Kevin Waetke, a Wells Fargo spokesman, rejected the
contention that race was a factor in the bank’s pricing of mortgage loans. “We
do not tolerate illegal discrimination against or unfair treatment of any
consumer,” Mr. Waetke said. “Our loan pricing is based on credit risk. We are
committed to serving all customers fairly — our continued growth depends on
it.”
But Suzanne Sangree, chief solicitor for the Baltimore City
Law Department, said: “This wave of foreclosures in minority neighborhoods
really threatens to undermine the tremendous progress the city has made in
developing distressed neighborhoods and moving the city ahead economically.
Wells Fargo could do a lot, as well as other banks that have engaged in similar
practices, to help to curb the flood of foreclosures that the city is
experiencing now.”
Among the practices cited by the city, Wells Fargo allowed
mortgage brokers to charge higher commissions when they put borrowers in loans
with higher interest rates than the customers qualified for based on their
credit profiles. The bank also failed to underwrite mortgage loans to
traditional criteria, the suit said, setting up the borrowers for default. Such
practices were common at many lenders during the boom.
Now, Baltimore is a city in a foreclosure crisis, according
to the complaint. Citing figures from the Maryland Department of Housing and
Community Development, the suit said foreclosure-related events in the city,
including notices of default, foreclosure sales and lenders’ purchases of
foreclosed properties, rose more than five times between the first and second
quarters of 2007.
Wells Fargo has been the largest or second-largest provider
of mortgage loans to Baltimore borrowers since 2004, according to the lawsuit.
From 2004 through 2006, Wells Fargo made at least 1,285 mortgage loans a year
to area residents with a total value of more than $600 million. Wells Fargo now
has the largest number of foreclosures in Baltimore of any lender, the suit
stated.
Half of the Wells Fargo foreclosures in 2006 occurred in
census tracts with populations that were more than 80 percent black, the suit
said. Meanwhile, only 16 percent of the foreclosures were found in tracts with
populations that are 20 percent or less black. Figures for 2007 were similar,
the city said.
John P. Relman, a lawyer at Relman & Dane in
Washington, represents the City of Baltimore in its case against Wells Fargo.
“Foreclosures have a more profound effect in minority communities because they
are closest to the line of distressed neighborhoods in many cities,” Mr. Relman
said. “That causes big problems for the cities, not just the lost income from
taxes but also the long-term social costs. Programs are going to be needed to
stabilize the communities to be rebuilt.”
The Baltimore complaint cited a 2005 study showing that
foreclosures required more municipal services and higher costs. The study,
commissioned by the Homeownership Preservation Foundation of Minneapolis,
identified 26 different costs incurred by government agencies responding to
foreclosures in Chicago and in Cook County, Ill., in 2003 and 2004. The
analysis concluded that total costs reached $34,199 for each foreclosure. @
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