Category Archives: Credit markets

Trojan Horse in Tax Compromise: GOP Plan to Bankrupt States, Break Unions (Updated)

This alert came via James Pethokoukis of Reuters:

Congressional Republicans appear to be quietly but methodically executing a plan that would a) avoid a federal bailout of spendthrift states and b) cripple public employee unions by pushing cash-strapped states such as California and Illinois to declare bankruptcy.

This report has serious, and apparently unrecognized implications:

Mirabile Dictu: The Treasury Flexes Some Muscle on the Volcker Rule?

As readers know, this blog has LOOONG been a critic of the Treasury Department’s stance towards big dealer banks, both in the Paulson era and from the very get-go of Geithner’s tenure. So on those all-too-rare occasions when Treasury seems willing to meddle in a real way with the “heads we win, tails you lose” arrangement the financial services industry has managed to devise with broader society, it’s important to applaud those efforts.

Admittedly, it is premature to declare victory, but the fact that Treasury is even taking a serious stance on the so-called Volcker rule is a surprise.

Some Lenders Sell Foreclosed Homes Without Obtaining Title

When you thought you’d seen every possible stuff-up in mortgage land, a new one comes to light.

When the housing market correction started, most savvy observers pointed out that prices needed to revert to long-term relationships with rentals and income levels. And many have also pointed out that it is reasonable to expect prices to overshoot on the downside.

Evidence of the latest self-inflicted wound comes via e-mail from Lisa Epstein of ForeclosureHamlet.org…

Lender Processing Services Produced More Bogus Foreclosure Documents Than It ‘Fessed To

Readers may recall that this site broke the story of litigation against Lender Processing Services, the biggest player in foreclosure management on behalf of mortgage servicers. These cases, launched earlier in the fall, accused the company of taking impermissible legal fees. These class action lawsuits were joined by the US bankruptcy trustee for the Northern District of Mississippi, both for herself and on behalf of all US bankruptcy fees, which meant she felt the issues set forth in the case had merit and were serious. In November, an additional class action case was filed against LPS, this time securities litigation, charging the company with making false and misleading statements to investors from July 29, 2009 to October 4, 2010, including “deceptive and improper document execution and preparation related to foreclosure proceedings.”

Subsequently, as our Richard Smith detailed earlier today, Housing Wire’s Paul Jackson attacked critics of LPS, including this blogger, of going off half baked in accusing the company of engaging in document fabrication. A Reuters investigation published today supports the critics’s case, revealing that document creation was far more extensive that the company has suggested.

Guest Post: All together now? Arguments for a big-bang solution to Eurozone problems

By Daniel Gros, Director of the Centre for European Policy Studies, Brussels. Cross posted from VoxEU. Muddling through isn’t working. This column argues that troubled Eurozone nations should simultaneously open restructuring talks while continuing to service their debts normally. Germany, France, and other core Eurozone nations would have to stand ready to recapitalise the banks […]

Ireland About to Give Another Sop to the Banks, a Bad Assets Fire Sale?

Reader Swedish Lex, who was involved in the famed and generally well regarded Swedish banking industry cleanup of the early 1990s, read an innocuous-sounding Financial Times story the same way I did. Not only are the banks who lent recklessly to Ireland’s overheated property sector being shielded from most of the consequences of their stupidity […]

Adam Levitin Shreds American Securitization Forum Defenses

It isn’t clear why the American Securitization Forum decided to walk into a buzzsaw, but the carnage is proving to be an amusing spectacle. For readers who have not followed this wee saga, mortgage securitization abuses are increasingly looking to be a mess of Titanic proportions. The securitization industry created complex and specific procedures for […]

Will Thousands of Foreclosures Be Voided Because Non-Lawyers Prosecuted Them?

If you thought robo signing was bad, you ain’t seen nothin’ yet. The website 4ClosureFraud presents the gory details of a potential major new front in the foreclosure mess. A Pennsylvania foreclosure mill, Goldbeck McCafferty & McKeever, is accused by Patrick Loughren of allowing non-attorneys to file and prosecute foreclosures. A DailyFinance story gives the […]

New York Judge’s Testimony Contradicts American Securitization Forum Assertions on Mortgage Mess

Maybe the American Securitization Forum ought to do its homework before making emphatic and not very well founded claims. Right before Thanksgiving, the ASF released its long-awaited white paper, which argued, basically, that industry standard practices for conveying notes (the borrower IOUs) to securitization trusts were sound. Curious readers new to this can read the […]

Debunking the Myth That Bigger Banks are More Efficient and Necessary

A very good op ed by Thomas Hoenig in the New York Times, “Too Big to Succeed” provides a solid recap of why the business of reining in the too big too fail banks is crucial. It isn’t simply that this is yet another version of “Mission Accomplished”; the bailouts actually made industry concentration worse, […]

Fed Thumbs Its Nose at Audit the Fed; Withholds Data Required on $885 Billion of Collateral

Well, even under the compulsion of law, the Fed chooses not to comply. Should we be surprised that it continues to refuse to make mandated disclosures? In this case, as reported by Bloomberg, the Fed has withheld information that was of the collateral posted by borrowers to secure $885 billion of loans. Without this information, […]

The man with the magic words

…turns out to be Trichet, this week, anyway; the bond markets are soothed. Two key comments: We have got a monetary federation. We need quasi-budget federation as well. a statement which ought to have all the Eurosceptics, and many others, chorussing “told ya”; then Mr Trichet also hinted that the ECB could extend its purchase […]

American Securitization Forum Tells Monstrous Whoppers in Senate Testimony on Mortgage Mess

Well, I suppose one can defend the lies testimony offered by American Securitization Forum executive director Tom Deutsch before the Senate Banking Committee yesterday if one subscribes to the Through the Looking Glass theory of usage: ` When I use a word,’ Humpty Dumpty said, in rather a scornful tone, `it means just what I […]