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When the people fear the government, there is tyranny; When the government fears the people, there is liberty.  ~ Thomas Jefferson

 

Entries Tagged as 'Banking Industry'

Foreclosure freeze leads to uneasy politics for Democrats

October 19th, 2010 · Accountability, Banking Industry, Corruption, Deception, Democrats, Ethics, Federal Spending, Fraud Alert, Government Control, Greed, Housing Industry, Money Lost, Obama's Scheme, Selling Out the US, Tax Dollars, Taxes, Treasury

Another political factor: people struggling to keep paying their mortgages who are upset that deadbeat borrowers may get a break.

“I pay my mortgage every month; that was the deal I made,” Kevin McGrath, a Virginia realtor, wrote in an e-mail. “I know I am currently throwing money into a depreciating asset that every day feels more and more like the Black Hole of Calcutta, but that’s ok; I placed my bet, and I am willing to ride this pony until she breaks.

“But wait a minute; now I look over at my neighbor and I see he is in the same situation, upside down on his mortgage, except he has not made a payment in a year or so. He has multiple cars in his driveway, some of them newer than mine, he just got back from a trip to Best Buy, and he is still living in his house. There are all kinds of neat things to do with your money when your housing costs are zero. Where is my free rent?

By Steven Mufson Washington Post Staff Writer
Tuesday, October 19, 2010; 7:26 AM

The details of the foreclosure mess are ugly and complicated. The politics of it are even worse.

The calculus is clear for most Democratic incumbents, especially those in tight races like Senate Majority Leader Harry M. Reid: Nothing could be worse on the eve of elections than images of people being booted out of their homes by big banks that have relied on sloppy, if not fraudulent, paperwork.

But reviving the economy requires repairing the housing market, which won’t happen until foreclosed properties and delinquent mortgages are dealt with. So the White House, which is looking past the midterm elections, has been restrained. Housing and Urban Development Secretary Shaun Donovan wrote over the weekend that “a national, blanket moratorium on all foreclosure sales would do far more harm than good, hurting homeowners and home buyers alike.”

It’s a recipe for legislative inaction, especially with lawmakers busy campaigning. For a White House seen by Wall Street as too populist, and by many liberals as too close to Wall Street, that might not be a bad outcome. Democratic candidates can strike a populist note, letting the Obama administration take the economic high road while pressing banks to define the scope of the latest financial mess.

“There’s a problem here,” said one veteran Democratic political consultant, who spoke on the condition of anonymity because of the issue’s sensitivity. “The politics are very attractive to say, ‘Let’s have a moratorium.’ But shutting down foreclosures has the potential of shutting down the whole housing market, which isn’t helpful to anybody.”

For now, most of the biggest banks, sensitive to political winds, have voluntarily frozen foreclosure sales. Some analysts believe the freeze could last until January. That gives banks until the end of the quarter to figure out the extent of their problems, and it delays foreclosures until after the election as well as the Thanksgiving and Christmas holidays.

“I think that they’re trying to see how this is playing,” said one political consultant working for the financial services industry. “They’re trying to gauge the political intensity around the issue.”

Democratic pollster Peter Hart says intensity runs high. “There are two things of critical importance to American households,” he said. “One is their job and two is their house.”

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Government had been warned for months about troubles in mortgage servicer industry

October 11th, 2010 · Banking Industry, Deception, Democrats, Economy, Ethics, Federal Spending, Government, Government Control, Housing Industry, Obama's Scheme, Real Estate, Selling Out the US, Tax Dollars, Taxes, Unemployment

By Zachary A. Goldfarb Washington Post Staff Writer
Sunday, October 10, 2010; 12:45 AM

Consumer advocates and lawyers warned federal officials in recent years that the U.S. foreclosure system was designed to seize people’s homes as fast as possible, often without regard to the rights of homeowners.

In recent days, amid reports that major lenders have used improper procedures and fraudulent paperwork to seize properties, some Obama administration officials have acknowledged they had been aware of flaws in how the mortgage industry pursues foreclosures.

But the officials said they could take only limited action to address the danger. In part, this was because they wanted lenders’ help carrying out federal programs to modify mortgages that had fallen into default or were poised to do so.

New concerns about improper practices – such as those involving faked documents or “robo-signers” who signed tens of thousands of documents without reviewing them – have prompted the mortgage servicing arms of the country’s largest banks to freeze millions of foreclosures. As momentum builds for a national moratorium, the administration has begun assessing the potential impact, examining the threat it could pose for the ailing housing market and the wider financial system.

There is no evidence so far that the specific abuses made public in the past few weeks were known to government officials. Nor is it clear whether they were aware that the process of the selling and reselling of mortgages among financial firms – which became extremely common and highly profitable during the housing boom – was raising legal questions about who actually owned the loans and had the right to foreclose if they went bad.

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Momentum builds for nationwide freeze on foreclosures despite the grave impact on the nation’s housing market and economic recovery.

October 11th, 2010 · Banking Industry, Corruption, Deception, Democrats, Economy, Federal Spending, Government Control, Greed, Housing Industry, Obama's Scheme, Real Estate, Selling Out the US, Tax Dollars, Taxes, Terrorism from Within, Treason, Treasury, Unemployment

By Ariana Eunjung Cha, Steven Mufson and Jia Lynn Yang Washington Post Staff Writers
Saturday, October 9, 2010; 10:23 AM

Senior Obama administration officials said Friday that a nationwide moratorium on foreclosure sales may be inevitable, despite their grave reservations about the impact a broad freeze would have on the nation’s housing market and economic recovery.

Their remarks were made as pressure for a nationwide moratorium mounted Friday when Bank of America, the nation’s largest bank, halted foreclosure sales in all 50 states. Senate Majority Leader Harry M. Reid (D-Nev.), who is locked in a tight reelection campaign, called on other major lenders to follow suit.

The White House has so far resisted joining the election-season calls for action but convened two interagency meetings this week to discuss reports that banks filed fraudulent documents to evict delinquent borrowers and to deal with questions about whether banks are seizing properties without having clear ownership of the mortgages.

One meeting was made up mostly of groups that regulate the housing industry, including the Department of Housing and Urban Development, the Treasury Department and the White House. The other, which involved the U.S. Securities and Exchange Commission, the Internal Revenue Service and U.S. attorneys from across the country, was focused on the question of whether financial fraud was committed.

With foreclosed properties comprising one in every four homes sold in the United States, the spreading moratorium could disrupt real estate deals in progress, slow down the process of clearing the backlog of troubled home loans and prolong the economic recovery, analysts said.

A freeze would also strike at the financial sector, just two years after it suffered one of the worst crises in its history. One government official who has been in discussions with several big financial firms said the banks are bracing themselves for a wave of lawsuits from homeowners who are fighting to keep their homes and from investors who had bought mortgage loans on Wall Street. On Friday, while the Dow Jones industrial average crossed 11,000, most major bank stocks fell.

Bank of America is the first bank to put a moratorium on foreclosures in all states, extending its suspension to states such as California and Nevada, which have been hit hardest by the housing bust. Previously, Bank of America, J.P. Morgan Chase and others had announced that they were stopping foreclosures only in the 23 states where a court order is needed for an eviction.

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Obama won’t sign bill that would affect foreclosure proceedings

October 7th, 2010 · Banking Industry, Democrats, Economy, Housing Industry, Obama's Scheme, Selling Out the US

By Jia Lynn Yang Washington Post Staff Writer
Thursday, October 7, 2010; 2:34 PM

Amid growing furor over the legitimacy of foreclosure proceedings, White House officials said Thursday that President Obama will not sign a two-page bill passed by lawmakers without public debate after critics said the legislation could loosen standards for foreclosure documents.

The bill, named the Interstate Recognition of Notarizations Act, would require courts to accept document notarizations made out of state. Its sponsors intended the effort to promote interstate commerce. But homeowner advocates warn the new law could allow lenders to cut even more corners as they seek to evict homeowners.

White House press secretary Robert Gibbs said the president did not believe Congress meant to undermine consumer protections regarding foreclosure challenges. Still, Obama will use a “pocket veto,” which will effectively kill the legislation.

Democratic leaders on the Hill were scrambling to figure out how the bill managed to sail through both chambers of Congress without any objection. The episode may prove embarrassing for Democrats who in recent weeks have been calling for federal investigations into flawed paperwork, forged documents and other kinds of misconduct in foreclosure proceedings initiated by big lenders.

The House passed the bill in April by a voice vote, meaning there’s no record of who voted for or against the legislation. The Senate passed the bill on Sept. 27, just before recess, without any debate.

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In foreclosure controversy, problems run deeper than flawed paperwork

October 7th, 2010 · Banking Industry, Deception, Democrats, Economy, Housing Industry, Obama's Scheme, Selling Out the US, Tax Dollars, Unemployment

By Brady Dennis and Ariana Eunjung Cha Washington Post Staff Writers
Thursday, October 7, 2010; 12:01 AM

Millions of U.S. mortgages have been shuttled around the global financial system – sold and resold by firms – without the documents that traditionally prove who legally owns the loans.

Now, as many of these loans have fallen into default and banks have sought to seize homes, judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title.

These fundamental concerns over ownership extend beyond those that surfaced over the past two weeks amid reports of fraudulent loan documents and corporate “robo-signers.”

The court decisions, should they continue to spread, could call into doubt the ownership of mortgages throughout the country, raising urgent challenges for both the real estate market and the wider financial system.

For struggling homeowners trying to avoid foreclosure, it could mean an opportunity to challenge the banks they argue have been unhelpful at best and deceptive at worst. But it also threatens to leave them in prolonged limbo, stuck in homes they still can’t afford and waiting for the foreclosure process to begin anew.

For big banks, “there’s a possible nightmare scenario here that no foreclosure is valid,” said Nancy Bush, a banking analyst from NAB Research. If millions of foreclosures past and present were invalidated because of the way the hurried securitization process muddied the chain of ownership, banks could face lawsuits from homeowners and from investors who bought stakes in the mortgage securities – an expensive and potentially crippling proposition.

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Honey, I Shrunk My Approval Ratings

August 26th, 2010 · Auto Industry, Banking Industry, Deception, Democrats, Economy, Federal Spending, Government Control, Greed, Non-Transparency, Obama Exposed, Obama's Scheme, Reform, Tax Dollars, Taxes, Unemployment

The White House is having a disastrous ‘summer of recovery.’

By Karl Rove

In what will rank as one of the all-time presidential PR disasters, we’re now well over half way through what the White House called “the summer of recovery.” And what a recovery it’s been.

Earlier this month, first-time claims for unemployment hit a nine-month high. The unemployment rate remains at 9.5% and 18.4% of workers are out of a job, can only get part-time work, or have given up looking for a job altogether. Sales of existing homes dropped 27% from June to July, hitting the lowest point since data were first collected in 1999. The Conference Board’s Consumer Confidence Index fell to 50.4 in July, continuing a slide that started in February. And the stock market is down 11% from its peak in April.

All of this has helped shatter public confidence in the president. In early May, Mr. Obama’s approval on the economy in the YouGov/Polimetrix poll was 42%. By mid-August, it was 35%—a frightening number for Democrats less than 70 days from a midterm election. According to this week’s Reuters poll, 72% are “very” worried about jobs and 67% “very concerned” about government spending.

Mr. Obama’s credibility is crumbling, and for good reason: He and his people are saying things people don’t believe. At the start of his summer of recovery road show, the president flatly asserted that last year’s massive stimulus package had “worked.” Vice President Joe Biden, not to be outdone, promised monthly job gains of up to 500,000 and insisted that the recovery’s pace “continues to increase, not decrease” as stimulus spending was “moving into its highest gear.”

It’s slightly surreal. “Who are you going to believe,” as Groucho Marx once said, “me or your own eyes?”

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With their Jobs on the line, Dems want to fix the economy. Too little too late.

August 25th, 2010 · Accountability, Auto Industry, Banking Industry, Change of Power, Deception, Democrats, Economy, Ethics, Federal Spending, Government Control, Greed, Money Lost, Non-Transparency, Obama's Scheme, Reform, Selling Out the US, Tax Dollars, Taxes, Terrorism from Within, Treason, Treasury, Unemployment

As midterms loom, Democrats work to shore up faltering recovery

By Lori Montgomery – Wednesday, August 25, 2010

A rapidly weakening economy threatens to undermine President Obama’s assertion that he has set the nation on a path to prosperity and, with barely two months until congressional midterm elections, Democrats find themselves with few options for reviving the faltering recovery.

The latest sign that the economy is losing steam: Home sales fell 27 percent in July, the steepest one-month drop since figures were first compiled in 1968, according to a report released Tuesday. Analysts had expected sales to decline following the expiration of a federal tax credit for homebuyers this spring, but the drop was nearly twice as large as forecast.

The housing report punctuated a wave of bad news that has been building all summer. The number of jobless claims has risen in each of the past four weeks and last week hit its highest point in nine months. Private-sector job creation is trending well below the level needed to keep up with population growth. Retail sales have also been disappointing.

Economists generally do not expect a dip back into recession, although many say the risk has grown with each new piece of disheartening data.

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Budget analysts see 2010 deficit at $1.3 trillion

August 19th, 2010 · Auto Industry, Banking Industry, Deception, Democrats, Federal Spending, Government, Greed, Money Lost, Non-Transparency, Obama's Scheme, Reform, Selling Out the US, Tax Dollars, Taxes, Terrorism from Within, Treason, Unemployment

The Associated Press
Thursday, August 19, 2010; 12:22 PM

WASHINGTON — This year’s federal deficit will exceed $1.3 trillion, Congress’ official budget analysts projected Thursday in a report underscoring election year perils both parties face as they struggle to balance conflicting demands to trim budget shortfalls, spark the economy and cut taxes.

The nonpartisan Congressional Budget Office said this year’s budget gap would be $71 billion less than last year’s red ink, thanks to a reversal of recent trends that have seen years of steadily rising government spending and falling federal revenues.

Even so, that would leave this year’s deficit as the second largest ever in dollars, trailing only last year’s $1.4 trillion. To put those numbers in perspective, the shortfalls for 2009 and 2010 are each three times as big as the government’s annual deficit had ever been previously.

The report immediately became fodder for partisan finger-pointing over the deficit, a concern of voters in the shadow of this fall’s elections, which will determine control of Congress.

Sen. Judd Gregg of New Hampshire, top Republican on the Senate Budget Committee, said the report highlighted that a “spending spree” by Congress, including enactment of President Barack Obama‘s health care overhaul, was driving annual deficits and the cumulative federal debt skyward.

“Today’s CBO outlook only underscores what we already know – the current pace of U.S. spending is unaffordable and unsustainable, and without a change in direction, this country is headed for fiscal calamity,” Gregg said.

Senate Budget Committee Chairman Kent Conrad, D-N.D., said helping the economy recover must be the top priority. But he said to address long-term budget pressures like the retirement of baby boomers, “we must start now to enact deficit reduction policies that will kick in after the economy has more fully recovered.”

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Judge decries lenient treatment of banks but approves Barclays deal

August 19th, 2010 · Accountability, Banking Industry, Corruption, Deception, Democrats, Ethics, Greed, Non-Transparency, Obama's Scheme, Selling Out the US

 By Spencer S. HsuWashington Post Staff Writer
Thursday, August 19, 2010

A federal judge Wednesday denounced the Obama administration’s treatment of major global banks accused of violating U.S. laws, saying the government lets them off easy by declining criminal prosecution in exchange for payments of hundreds of millions of dollars.

“The public looks at this and says: ‘They get a free ride here. They are paying for their justice. . . . They don’t have to plead guilty,’ ” said U.S. District Judge Emmet G. Sullivan of the District, who nevertheless approved a $298 million forfeiture by Barclays Bank to settle criminal charges of violating U.S. financial sanctions against Cuba, Iran, Libya, Sudan and Burma. “Shareholders pay. The bank doesn’t suffer.”

In questioning the Barclays deal, Sullivan became the latest federal judge to criticize the Obama administration for being too lenient with giant banks. In recent months U.S. District Judges Ellen S. Huvelle of the District and Jed S. Rakoff of New York have balked at initial plans by the U.S. Securities and Exchange Commission to settle charges that Citigroup and Bank of America misled investors leading up to the 2008 financial crisis.

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Democrats passes financial reform bill before ousted.

July 17th, 2010 · Banking Industry, Congress, Deception, Democrats, Federal Spending, Finance, Government, Government Control, Non-Transparency, Obama's Scheme, Selling Out the US, Tax Dollars, Taxes

By Brady Dennis Washington Post Staff Writer
Friday, July 16, 2010

Congress gave final approval Thursday to the most ambitious overhaul of financial regulation in generations, ending more than a year of wrangling over the shape of the new rules and shifting the government’s focus to the monumental task of implementing them.

The final Senate vote, which came almost two years after the nation’s financial system nearly collapsed, was a significant legislative victory for President Obama, who had pledged to rein in the reckless Wall Street behavior behind the crisis and to right the government regulation that failed to prevent it.

The massive bill establishes an independent consumer bureau within the Federal Reserve to protect borrowers against abuses in mortgage, credit card and some other types of lending. The legislation also gives the government new power to seize and shut down large, troubled financial companies — like the failed investment bank Lehman Brothers — and sets up a council of federal regulators to watch for threats to the financial system.

Under the new rules, the vast market for derivatives, complex financial instruments that helped fuel the crisis, will be subject to government oversight. Shareholders, meanwhile, will gain more say on how corporate executives are paid.

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