The same people who were present at the creation of the original bubble are driving the boat in this second incarnation.
|By: David Dayen Tuesday December 11, 2012 1:50 pm|
|By: David Dayen Monday December 10, 2012 9:02 am|
Forgive me if I slip into a cliff metaphor, but the employment of the tool actually makes more sense in this context. The fact is that the expiration of the Mortgage Forgiveness Debt Relief Act, as explained by Adam Levin of Credit.com, represents a real threat to a nascent housing recovery, because it will put a deep freeze on a very large chunk of current US home sales.
|By: David Dayen Friday December 7, 2012 10:16 am|
Lots of people must be credited with getting to the bottom of this scam, but perhaps nobody is more responsible than Thomas Cox. He was the former bank lawyer – he specialized in foreclosures – who volunteered to help Pine Tree Legal Assistance in Maine, a nonprofit just starting up a foreclosure defense project. Cox ended up doing the now-famous deposition of Jeffrey Stephan, the GMAC robo-signer, that exposed this practice of having affidavits filled out by people with no underlying knowledge of the loan data. This was the string that, when pulled, showed the fraud and rot at the heart of the largest consumer market in the world.
|By: David Dayen Friday December 7, 2012 5:54 am|
I’ve had more than a few assurances that Congress would get its act together and pass an extension of the Mortgage Forgiveness Debt Relief Act, so that underwater homeowners who get some debt relief won’t have a big tax bill staring them in the face to make their financial situation even worse. But if that’s the case, you have to wonder why lenders are packing in so many short sales as we near the expiration date.
|By: David Dayen 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.
|By: David Dayen Tuesday December 4, 2012 5:30 pm|
On both sides of the Capitol, there was news on the committee that holds oversight responsibilities over Wall Street today. In addition to Elizabeth Warren getting her spot on the Senate Banking Committee, Maxine Waters assumed the spot of ranking member on the House Financial Services Committee.
|By: David Dayen Monday December 3, 2012 2:52 pm|
Late last week, the Justice Department issued a filing that attempts to reinforce the release limitations set by the foreclosure fraud settlement, stopping Wells Fargo from reimagining the deal as a broader release of liability on various mortgage claims. However, a judge will have to make the final decision.
The US sued Wells Fargo in late October over issuing insurance claims on FHA loans while knowing that the loans did not meet underwriting requirements set by the agency. Wells charged in court that these specific charges were covered under the foreclosure fraud settlement. I actually thought Wells made a fairly compelling case on that front, but the DoJ disagrees.
|By: David Dayen Thursday November 29, 2012 4:00 pm|
It’s not often that the homeowner advocates at the Center for Responsible Lending and the bank lobbyists at the Financial Services Roundtable agree on anything. But they’re teaming up on urging Congress to extend the Mortgage Forgiveness Debt Relief Act, which would continue the foreclosure crisis-era policy of forgiving payment of taxes on debt forgiveness like a principal reduction or a short sale.
In letters to the Senate Finance Committee and the House Ways and Means Committee, which have jurisdiction over tax law, CRL and the FSR describe the debt relief law as “critical to helping homeowners and communities struggling with the ongoing foreclosure crisis.” They also note that failing to extend the law would threaten a housing recovery.
|By: David Dayen Monday November 26, 2012 11:15 am|
Geithner’s protestations about employing the “best feasible solutions” are really disingenuous. Unless by “feasible” he means the “solutions which hold banks the most harmless.” The truth is that Geithner wanted to protect banks and their bondholders at all costs, and that didn’t match with delivering debt relief to borrowers. Period.
|By: David Dayen Tuesday November 20, 2012 7:33 am|
Morgan Stanley continues to predict a weak 1.4% growth for the US in 2013. I assume some of this pessimism has to do with the potential for a nasty fiscal slope. But this forecast mirrors their previous forecast in September, so nothing has changed in their analysis in the two months where policymakers crept closer to the slope. In other words, there’s something more structural at work. You can see that in the sharp pullback in investment at the corporate level