Eminent Domain Threat May Force Banking Practices Into Full View

By: Saturday August 10, 2013 9:06 am

The city of Richmond, California, is faced with a mountain of homes where the owners are seriously underwater in their mortgages. The banks and investors who hold the mortgages have refused to adjust the terms of the loans in any meaningful way, and Richmond is worried that a wave of either foreclosures or walkaways will result in Richmond becoming Detroit West. Their solution: they want to buy the loans and then rework the terms for the owners to something more realistic. The banks, as you might guess, don’t want to sell.

Richmond is threatening to invoke eminent domain, to force the sale, and the banks are filing suits to block this. But the banks ought to be careful about what they are wishing for. Why? I’ll give you the answer in a single word . . .

 

Preet Bharara Picks on Small Fry Again

By: Sunday February 3, 2013 10:40 am

Preet Bharara can’t figure out how to sue a Wall Street CEO, let alone investigate and indict one.

FHFA’s Christmastime Moral Relativism and the New New Housing Market

By: Wednesday December 5, 2012 9:45 am

FHFA has situational ethics here. They rail against states with long foreclosure timelines, even increasing their guarantee fees. But when faced with headlines about foreclosures during Christmas, they become beneficent, and act to increase foreclosure timelines.

White House Promises to Dump Ed DeMarco if They Only Get the Chance in a Second Term

By: Wednesday October 24, 2012 2:00 pm

In one of the more cynical campaign promises I’ve seen in a while, the Obama Administration has apparently been running around to housing advocates telling them they will fire Ed DeMarco as head of the Federal Housing Finance Agency… after the election.

Big Banks Whining That Fannie and Freddie Won’t Accept Their Toxic Loans Blindly Anymore

By: Saturday October 6, 2012 7:00 pm

Mitt Romney’s comments attributing the difficulty of getting a mortgage to Dodd-Frank QRM rules was really way off base. The rule is on track to be completed by the Consumer Financial Protection Bureau on the timeline set out in Dodd-Frank, by 2013. As it’s not in place now, it places no penalty on lenders to hand out loans below the Qualified Residential Mortgage standards. And there isn’t a look-back function in the rules. If anything, you’d think lending would go FASTER to get negative amortization or adjustable-rate loans in under the wire. To the extent that there’s any delay, it’s because banks and mortgage lenders are trying to expand the rule to get themselves legal immunity on the loans they write.

FHFA Bullying States Into Making Foreclosures Faster

By: Friday September 21, 2012 9:05 am

The federal conservator of Fannie and Freddie wants to put its thumb on the scale in favor of faster foreclosures and diminished due process. The Federal Housing Finance Agency wants to be able to foreclose on lenders in Illinois, New York, New Jersey, Connecticut and Florida without concern for whether the documents are legitimate, without concern for whether the bank and the borrower can come to a resolution on a modification.

A Look at the Housing Plank of the GOP Platform

By: Wednesday August 29, 2012 9:40 am

The housing plank comes in the “Restoring the American Dream – Economy and Jobs” section of the document. It’s five paragraphs long, and much of it is explanatory and flowery. Most of the first paragraph goes on and on about the importance of homeownership. It concludes, “Homeownership is best fostered by a growing economy with low interest rates, as well as prudent regulation, financial education, and targeted assistance to responsible borrowers.” Beyond that, there’s not much here; they blame government for the housing market collapse, citicize Obama for not fixing it even though it happened in 2006-07, and have no discussion of the current foreclosure and servicing crisis except to say that the government shouldn’t help homeowners with principal writedowns.

Treasury Could Force Principal Reductions at the GSEs

By: Thursday August 9, 2012 11:25 am

Last week, when Ed DeMarco rejected principal reductions on Fannie and Freddie loans, Treasury Secretary Timothy Geithner pronounced himself disappointed. Housing advocates called for DeMarco to be fired; I explained why that won’t happen. And here’s another reason, courtesy Joseph Cotterill. The truth is that the Treasury Department has all the tools it needs to [...]

FHFA Threatens Localities on Eminent Domain Solution for Foreclosures

By: Wednesday August 8, 2012 12:03 pm

Ed DeMarco is really feeling his oats, no doubt thanks to projections of profits at Fannie and Freddie paradoxically spurred by a housing shortage. (Those profits are at least partially derived from Fannie and Freddie evading local government transfer taxes, by the way, not DeMarco’s “responsible stewardship.”) He rejected principal reductions as a means to solve the foreclosure crisis. And now, he’s going after another potential solution floated by some local governments: eminent domain.

Fraud Pays: Regulators Slow to Prosecute, Focused on Civil Rather Than Criminal Penalties

By: Wednesday August 8, 2012 10:00 am

The question that many of us asked in the wake of the revelations about money laundering at Standard Chartered Bank is why the federal regulators did apparently nothing, and that this had to get revealed by New York’s Department of Financial Services.

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