Thursday, August 15, 2013

Friday August 16 Housing and Economic stories


Overstock CEO: SAC Indictment is "Civilization Scraping Dog Sh-- Off Its Shoe" - (www.businessinsider.com) "Eight years ago I was roundly criticized by coming out publicly and saying, in brief: A network of dirty hedge funds were practicing all kinds of dicey practices, including insider trading and naked short selling (and being serial killers of firms in the process)," Byrne wrote. "The SEC was not doing its job protecting our markets because it is a captured regulator, and this combination was destabilizing the system." He continued: "Also that the mastermind, the Napoleon of crime, so to speak, was someone I initially identified as the "Sith Lord" of all that was evil and wrong on Wall Street. In the months after, I gradually dropped broader and broader public hints that I was talking about Stevie Cohen. Of course, through all of this my claims were spun, ridiculed, and mocked."

Boca Raton homeowner wins multi-million dollar foreclosure suit after legal misstep - (www.palmbeachpost.com) A Boca Raton homeowner whose waterfront mansion has been in foreclosure since 2008 had her case voluntarily dismissed by her lender Thursday in Palm Beach County court after a legal misstep during trial. Because the case is so old, homeowner attorney Roy Oppenheim said the bank may run into trouble trying to refile it. There is a 5-year statute of limitations on foreclosures. Homeowner Valerie Kaan bought the 13,000-square-foot home in 2003 for $8.4 million. Her loan was for $6.8 million from Washington Mutual Bank, which was later purchased by JP Morgan Chase. The outstanding balance as of Thursday was up to about $10 million with late fees, taxes and insurance, Oppenheim said. “I always tell my clients that a good settlement is usually in everyone’s best interest but in this case, for some reason, the bank did not recognize their own foibles,” Oppenheim said. “Maybe this will send a message to banks that when people come to the table in good faith with a reasonable offer, they should more seriously consider it.” Oppenheim said Kaan was in negotiations for a short sale and loan modification for two years before negotiations broke down. - See more at: http://blogs.palmbeachpost.com/realtime/2013/07/26/boca-raton-homeowner-wins-multi-million-dollar-foreclosure-suit-after-legal-misstep/#sthash.JnFjpZ9p.dpuf

American Dream Erased as Homeownership at 18-Year Low - (www.bloomberg.com) The U.S. homeownership rate, which soared to a record high 69.2 percent in 2004, is back where it was two decades ago, before the housing bubble inflated, busted and ripped more than 7 million Americans from their homes. With ownership at 65 percent and home values rising, housing industry and consumer groups are pressing lawmakers to make the American Dream more inclusive by ensuring new mortgage standards designed to prevent another crash are flexible enough that more families can benefit from the recovery. Regulators are close to proposing a softened version of a rule requiring banks to keep a stake in risky mortgages they securitize, according to five people familiar with the discussions.

Regulators Face Scrutiny on Banks’ Commodities at Senate Hearing - (www.bloomberg.com)  U.S. banks’ ownership and trading of physical commodities will face further scrutiny today when the heads of the Commodity Futures Trading Commission and Securities and Exchange Commission testify before lawmakers. Senator Sherrod Brown, the Ohio Democrat who led a hearing on the issue last week, said he plans to question the CFTC’s Gary Gensler and the SEC’s Mary Jo White on their oversight when the two chairmen appear before the chamber’s Banking Committee on implementation of Dodd-Frank Act reforms. JPMorgan Chase & Co. (JPM) is among lenders facing pressure after the Federal Reserve said it will review a decade-old decision letting them trade commodities seen as complementary to banking. JPMorgan, which agreed to pay $410 million to settle U.S. claims that it manipulated power markets, said on July 26 that it will sell or spin off holdings including warehouses, stakes in power plants and traders of gas and coal.

The National Debate Over Loan Modification Re-defaults is Stupid - Mandelman Matters - (www.ml-implode.com) It is apparently time for yet another national debate on whether loan modifications are an effective way to prevent foreclosures, and so far this one promises to be every bit as stupid as the last. TransUnion recently reported that after their loans were modified, only 40 percent of homeowners remained current on their mortgage payments 18 months later.  The study made headlines by reporting that after 18 months, 59.1 percent of modified loans had re-defaulted, meaning they went 60 or more days past due, and within 12 months, 42 percent had gone 60 or more days past due. Building on this report’s results, some have said that were we to look at re-defaults in 36 months, the percentage re-defaulting would be even higher.  I don’t have any way of knowing for sure whether that’s true or not, but I’d be willing to accept it as being the case. Adding to the headlines, a report by the Office of the Special Inspector General for TARP, more commonly known as “SIGTARP,” showed almost equally dismal performance for HAMP loan modifications.  In its April 24, 2013 Report to Congress, SIGTARP stated, among other things, “Of the 1.2 million HAMP participants, 306,000 have re-defaulted on their mortgages,” and went on to say that an additional “88,000 homeowners have missed payments and are at risk of re-default.”  






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