Category Archives: Credit markets

Fannie Increases Restrictions on Lender Processing Services, Other Technology Middlemen; LPS Document Shows Degree of Influence Over Law Firms

We’ve discussed Lender Processing Services, which serves as an outsourcer to the mortgage servicing industry, primarily via a software platform, as well as other companies with similar business models.

One of LPS’s major activities is acting as a middleman in the foreclosure process, reportedly hiring and firing foreclosure mills in the name of servicers. LPS is under fire in two national class action lawsuits for alleged impermissible fee splitting with foreclosure firms. A recent story in Reuters confirmed details we supplied in late October as to how LPS works with foreclosure mills, in particular, the very tight control it exercises over them.

Fannie Mae issued a directive today which effectively eliminates the payment of certain types of fees to firms like LPS.

Is the Ireland Bailout About to Become Bear Redux?

Not being an expert in either the Lisbon Treaty or the rules governing the ECB, I’m restricted in my ability to interpret an article in the Financial Times and the underlying position paper at the ECB on the legality of the Irish bailout. The Irish finance minister asked for a reading on the “draft law”, which is the Credit Institutions (Stabilisation) Bill 2010. There is a certain amount of grumpy harrumphing in the ECB response, namely, that it should have been consulted earlier and its preliminary reading has been made in more haste than it would like.

Regardless, it does not take a lot of expertise to get the drift of this gist:

Joseph Mason on the Myth of Good Servicers

By Thomas Adams, an attorney and former monoline executive, and Yves Smith Joseph Mason, the Hermann Moyse, Jr./Louisiana Bankers Association Professor of Finance, Louisiana State University, has a post up at Housing Wire that not only struck both of us as more than a tad off beam, but even elicited critical e-mails from real estate […]

Mirabile Dictu! Ernst & Young Faces Fraud Charges in Lehman Collapse

had given up on the idea that anyone associated with Lehman would be charged with fraud, even though it was blindingly obvious even before the investment bank failed that it was up to no good. So tonight’s report in the Wall Street Journal, that the New York attorney general Andrew Cuomo is about to file a lawsuit against Lehman accountants Ernst and Young, is welcome news indeed.

The British Mess (III): Bank of England Tiptoes Around Sovereign Risk Worries

By Richard Smith The latest Bank of England Financial Stability Report is worth decoding. My last post on the UK sketched a scenario in which the very large 2011 funding programme for UK banks, discussed in the June BoE FSR (back issues all available here), could be quite problematic, in adverse markets. I hinted that […]

Florida Judge Cancels All Foreclosure Sales in His Division Through Year End

Per the order below (hat tip Matt Weidner) a judge in Broward County appears to have cancelled all foreclosure sales in one of the foreclosure division from December 20 to December 31: Broward County Judicial Order Canceling Foreclosure Sales One might think this has something to with the Fannie and Freddie foreclosure halts, with run […]

Arizona, Nevada Sue Bank of America Over Mortgage Fraud While Treasury Sits on Its Hands

The Administration’s po-faced insincerity on the mortgage crisis front is wearing thin now that other authorities are taking action against the worst abuses.

SEC Examining Role of Servicers, Whether Mortgages Transferred to Trusts

hhm, despite the breezy assurances of the American Securitization Forum that everything was handled properly when residential mortgage backed securitizations were created, the SEC does not seem completely convinced. Reuters reports it has expanded its ongoing probe into foreclosure practices

Some Foreclosure Mills Disregarding Post-Robo-Signing Requirements

As much as a whole bunch of bank executives and securitization industry types have given Congressional testimony in which they maintained that they were duly concerned about “technical” errors like robo signing and would clean up their act, it appears that follow-through has been less than stellar.

Another Day, Another Rating Agency Fail, This Time S&P

f you thought that the rating agencies had cleaned up their act in the wake of the crisis, think again. Our Richard Smith reported on a couple of black eyes by Moody’s, one a rather implausible 180 degree turn on its take on the US tax deal, the other a suspiciously flattering take on whether Countrywide had indeed transferred notes (retaining them, as an executive testified they did on a routine basis, would confirm our suspicions about widespread problems in the securitization industry.

Now we have a big blooper by S&P, this one in the form of mass rerating, based on an admitted faulty analysis. That is code for “big error in the model that everyone missed.”

Bank of America Discussing Settlement of Pimco/Fed/Blackrock Letter (Updated: Less Here than Meets the WSJ’s Eye)

The Wall Street Journal reports that Bank of America is in discussions with a group of investors headed by Pimco, Blackrock, and the New York Fed that sent a letter roughly 60 days ago that was setting the groundwork for possible litigation. The underlying issue is alleged breaches of representations and warranties in 115 Countrywide […]

Dylan Ratigan on Get America Working

Dylan Ratigan is leading town hall events in various cities to help spur the establishment of a job creation movement. The goal is to push for policies that foster higher employment than the ones we’ve seen over the last thirty years, which instead promoted financialization, the use of consumer debt to paper over lack of wage growth, asset inflation and speculation, and increasing income and wealth disparity.

Ratigan wants to create a dialogue among key political groups, including ordinary citizens, investors, small business operators, and corporate leaders. His sessions will focus on four issues, as he outlined in in the Huffington Post:

Republican Members of FCIC to Promote Crisis Urban Legends, Shift Blame From Banks

Lordie, the Big Lie is with us in force.

The New York Times reports that the Republican members of the Financial Crisis Inquiry Commission are going to pre-empt the report (due in mid-January) and issue their own 13 page screed later today focusing blame for the crisis on…Fannie and Freddie, and no doubt the CRA too.

Let’s look at a few inconvenient facts.

Iowa AG Miller Commits to Prosecution of Bank Execs, Seeking Principal Mods

We asked readers to sign a letter to Iowa attorney general Tom Miller, who is leading the 50 state probe into foreclosure and mortgage abuses. Here is the official report from National People’s Action, which was part of the group that met with Miller earlier today: Leader of 50 State Foreclosure Probe Tells Struggling Homeowners: […]