KeNo's Housing and Economic Portal: Sunday March 13 Housing and Economic stories

Saturday, March 12, 2011

Sunday March 13 Housing and Economic stories

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TOP STORIES:

Bell Salary Scandal: Bell Police Department Baseball Game Exposed - (www.ktla.com) A memo uncovered in Bell police files reportedly outlines a baseball game of sorts in which police officers competed to issue tickets, impound cars and arrest motorists. The memo titled the "Bell Police Department Baseball Game," assigns "singles," "doubles," "triples" and "home runs" to increasingly more serious infractions, starting with parking tickets and moving on to vehicle impounds and felony arrests of drivers, said the Los Angeles Times. The memo reads "Non-performers," are "sent for minor league rehab stint." To view the court document click here: http://documents.latimes.com/bell-police-baseball/ The unearthing of the memo comes as the U.S. Department of Justice investigates Bell police and whether or not they violated the civil rights of residents through these aggressive acts of enforcement.

Goldman Sachs Estimates Possible Losses From Legal Cases at $3.4 Billion - (www.bloomberg.com) Goldman Sachs Group Inc., the fifth- biggest U.S. bank by assets, said “reasonably possible” losses from legal claims against the company may amount to as much as $3.4 billion. Goldman Sachs hasn’t set aside a “significant” amount of money against the possible losses, the New York-based bank said today in a 10-K filing with the U.S. Securities and Exchange Commission. The estimate, the first of its kind disclosed by the firm, is the “upper end” of losses in matters where the risk is “more than remote but less than likely,” the firm said. Banks are releasing possible-loss estimates after the SEC said in an October letter to corporate finance chiefs that they should disclose such losses “when there is at least a reasonable possibility” that they may be incurred, even if the risk is too low to require reserves.

BofA Mortgage-Bond Investors Hold $84 Billion Connected to Buyback Dispute - (www.bloomberg.com) A bondholder group seeking reimbursements from Bank of America Corp. over soured home-loan securities said the amount of debt it holds grew to $84 billion after more investors joined the dispute. The number climbed from about $46 billion in October, according to the group’s lawyer. The investors have had “enough progress” in negotiations with Bank of America and Bank of New York Mellon Corp., which acts as trustee of the debt, to warrant continued talks, Kathy Patrick, a partner at Houston-based Gibbs & Bruns LLP, said today in a telephone interview. Bank of America said Feb. 25 there were 225 mortgage deals in dispute, up from 115 in October. It didn’t provide a dollar value for the securities. Investors challenging the bank include Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York, people familiar with the matter said in October.

Fannie, Freddie Stuck In a Dividends Circle - (online.wsj.com) For the first time since the financial crisis, Fannie Mae and Freddie Mac are showing glimmers of profitability. But the two mortgage behemoths still ask the Treasury Department every quarter for billions of dollars in cash, most of it going right back out the door to pay dividends to the same U.S. agency. The requirement that both companies pay a 10% dividend on preferred shares—which the U.S. government receives for its infusions after taking over Fannie and Freddie in 2008—costs them about $15 billion a year at the current rate. In the last two quarters, the firms have paid $7.5 billion in total dividend payments, while receiving injections of $5.7 billion to help keep them in business. The dividends could force Fannie Mae and Freddie Mac to keep asking the Treasury Department for more money even after the companies get back into the black, helped by lower losses on mortgages and profits from newer loans. U.S. officials have said those payments are an appropriate way to repay taxpayers.

U.S. Repositions Military Units Near Libya, Freezes Qaddafi Family Assets - (www.bloomberg.com) Secretary of State Hillary Clinton said the Pentagon is positioning military units near Libya to support humanitarian relief efforts, while the U.S. Treasury announced the freeze of $30 billion in assets of Libyan leader Muammar Qaddafi, his family and the Libyan government. In the strongest rhetoric so far against Qaddafi from the Obama administration, Susan Rice, the U.S. ambassador to the United Nations, called the Libyan leader “delusional.” Qaddafi insisted in a television interview yesterday that “my people love me” and pledged to stay in power, while suggesting the U.S. wants to occupy Libya. “When he can laugh in talking to American and international journalists while he is slaughtering his own people, it only underscores how unfit he is to lead and how disconnected he is from reality,” Rice told reporters at the White House yesterday. Qaddafi’s attitude to the bloody crackdown on his people highlights the necessity of U.S., European and United Nationssanctions that have been imposed on Libya in recent days, she said.