Category Archives: Banking industry

For Once, Maybe Lying Does Not Pay: DoJ’s Lanny Breuer Resignation Leaked After Frontline Appearance

I am delighted to be proven to be wrong on the premise of the last post, which is that lying pays and it has become so routine that an op-ed writer for a liberal newspaper can point that out without being concerned about the broader ramifications. But this is almost certain to fall into “the exception that proves the rule” category.

Lanny Breuer, former Covington & Burling partner and more recently head of the criminal division at the Department of Justice, resigned abruptly today.

The Persistent Power of Finance, Um, JP Morgan

By C.P. Chandrasekhar, Professor of Economics, School of Social Sciences, Jawaharlal Nehru University, New Delhi. Cross posted from Triple Crisis

In a move that went contrary to what is expected of regulators, the Securities and Exchange Commission of the US approved in mid-December a controversial JP Morgan-created exchange-traded fund (ETF) backed by physical supplies of copper.

Bank of America Foreclosure Reviews: Whistleblowers Reveal Extensive Borrower Harm and Orchestrated Coverup (Part II)

In the executive summary to this series, we provided an overview of OCC/Federal Reserve foreclosure reviews which were abruptly settled at the beginning of January. Critics anticipated that the flawed design, of having supposedly “independent” review firms hired by the banks themselves, meant the reviews were highly unlikely to find much if any damage to homeowners. Leaks during the course of the reviews confirmed these concerns, revealing that the review process at many of the major servicers was chaotic and the reviews were designed and scored so as to make a finding of harm virtually impossible.

As bad as that sounds, the reality is even worse.

Bank of America Foreclosure Reviews: Whistleblowers Reveal Extensive Borrower Harm and Orchestrated Coverup (Part I – Executive Summary)

After extensive debriefing of Bank of America whistleblowers, we found overwhelming evidence that the bank engaged in certain abuses frequently, in some cases pervasively, in its servicing of delinquent mortgages. This is the first in a series of posts discussing our findings and providing support for these charges.

Schadenfreude Alert: Has Departing SEC Enforcement Chief Robert Khuzami Become Damaged Goods?

Reader Mrs. G. took note of how Khuzami’s effort to defend his record in the National Law Journal backfired.

Will New Consumer Financial Protection Bureau New Rules for Struggling Homeowner Stop Predatory Servicing?

The Wall Street Journal gives a teaser, in the form of excerpts from a speech to be made later today, on new rules the Consumer Financial Protection Bureau will be implementing to regulate how servicers treat homeowners who become severely delinquent on their mortgages.

Marcy Wheeler: Once Again, Jamie Dimon Gets Special Treatment

By Marcy Wheeler. Cross posted from emptywheel

Yesterday, the Office of the Comptroller of the Currency issued two orders to JP Morgan Chase, one related to its London Fail Whale, the other related to failures in its Bank Secrecy Act/Anti-Money Laundering compliance.

More Whistleblower Leaks on Foreclosure Settlement Show Both Suppression of Evidence and Gross Incompetence

No wonder the Fed and the OCC snubbed a request by Darryl Issa and Elijah Cummings to review the foreclosure fraud settlement before it was finalized early last week. What had leaked out while the Potemkin borrower reviews were underway showed them to be a sham, as we detailed at length in an earlier post. But even so, what actually took place was even worse than hardened cynics had imagined.

The Incredible Shrinking HBOS Fraud

Reviewing the press coverage of the HBOS fraud charges, and asking some questions.

The CFPB’s New Stealth Usury Law on Mortgages and Why It’s Desirable

With the looming debt ceiling pigfight consuming a lot of financial media bandwidth, some important stories are not getting the attention they warrant. One is on the hard fought and finally settled qualified mortgage rules just finalized by the Consumer Financial Protection Bureau. Georgetown law professor Adam Levitin in a new post describes how the new QM rules are a defacto usury law for the 21st century. Despite his good discussion of the QM and the history of usury laws, however, he peculiarly does not explain why usury laws are a good thing. Perhaps it seems obvious, given the explosion of economically unproductive consumer debt since they’ve effectively been eliminated.

Let me give you the reason why well designed usury laws are desirable, then I’ll turn the mortgage-related issues specifically.

Another Nightmare, “Zombie Title” Shows How Servicer Refusal to Foreclose Hurts Stressed Homeowners and Communities

One of the popular conservative memes is to fulminate that lots of Americans have been living “rent free” in homes slotted for foreclosure, taking advantage of the fact that court dockets are crowded. An important Reuters piece documents the flip side of this picture: what happens when the servicer starts foreclosure but keeps the property in limbo-land, and the homeowner has decamped, on the mistaken assumption that foreclosure was imminent? The Reuters tag phrase for this syndrome, “zombie title” doesn’t begin to do justice to the horrorshow that borrowers experience.

Schadenfreude Alert: With or Without AIG’s Help, Hank Greenberg Plans to Torture Treasury and Geithner

Never underestimate the greed of a billionaire. But I have to say separately that I will thoroughly enjoy the pigfight between former AIG chief Hank Greenberg’s C.V. Starr (now the biggest shareholder in AIG) versus the Federal government over the rescue of AIG. Any cost and embarrassment that the Administration suffers will be the direct result of the Bush-Obama policies of being concerned only about saving financial players rather than meting out any punishments, and for being incompetent negotiators.

$8.5 Billion Foreclosure Fraud Settlement: Yet Another Loss for Homeowners Touted as a Victory

It’s bad enough to see long suffering homeowners take it once again in the chin, thanks to the way the bank regulators prostrate themselves before their supposed charges. It adds insult to injury to see this type of ritualized sellout yet again presented as a boon for consumers.

The latest case study is the $8.5 billion foreclosure fraud settlement announced today.

Ian Fraser: Corruption allegations, major fraud inquiries, links to pornographic magazines … and a luxury yacht. Welcome to the world of banking

Police are (still) poised to press charges against several HBOS bankers and consultants after a two-year investigation into large-scale fraud, money laundering and corruption involving the Edinburgh-based bank.