More
than 25% of foreclosure review funds went to grossly overpaid consultants - (www.ochousingnews.com) The
relationship between corporations and the government is closer than any time
since the late 19th century. Perhaps we could use a little Teddy Roosevelt type
trust-busting to clean up our broken financial system. Until the next TR comes
along, we get to watch scandal after scandal were former government officials
go to the private sector to peddle their influence and get outsized paydays
(like Robert Rubin at Citibank). The latest abuse of power and influence comes
from the independent foreclosure review mandated by the bank settlement
agreement. A company run by a former government official ended up with almost
25% of the money earmarked for former homeowners “harmed” by foreclosure. I’m
torn on this issue. First, nobody was “harmed” by foreclosure proceedings. All
the borrowers who lost their homes were not making payments, and the banks
processed foreclosures per the mortgage agreement signed by the borrowers. Any
irregularities or problems with paperwork and processing do not override the
fact that these people weren’t paying their mortgages. In my estimation, they
deserve nothing. However, since there were so many delinquent borrowers who
were forced to vacate their former houses after a foreclosure auction,
political pressure mounted to placate these “aggrieved” former loan-owners. As
a result, the banks agreed to pay a few pennies in guilt money to former
loan-owners,
mostly to get these complainers and their politically opportunistic supporters
off their back.
Landlords
from hell accept prison terms for terrorizing tenants - (www.latimes.com) A
software engineer and his real estate agent wife who terrorized their tenants
in a twisted attempt to force them to move are back after fleeing to Italy,
and each has accepted a four-year prison sentence and two strikes rather than
face trial, Dist. Atty. George Gascon announced Wednesday. Nicknamed the
"landlords from hell," Kip and Nicole Macy employed tactics "so
outlandish and brazen" in attempting to clear their building of renters
that "it sounds like the plot of a horror movie," Gascon said. They
each pleaded guilty to two felony counts of residential burglary, one felony
count of stalking and one felony count of attempted grand theft. In custody on
$2-million bail apiece, they are scheduled to be sentenced Aug. 22.
Mortgage-Bond
Auction Failures Reach Most in 2013 as Prices Drop - (www.bloomberg.com) U.S. home-loan bonds without
government backing are failing to trade at investor auctions at the fastest
pace this year as prices tumble after a rally. The share of non-agency bonds
reported by dealers as not trading after being included in widely marketed
auctions rose to 44 percent in the first half of June, up from 18 percent last
month, according to data from New York-based Empirasign
Strategies LLC,
which tracks the information. A total of $9.5 billion of the debt was offered,
about the same pace as in the first four months this year, after $32.3 billion
in all of May. Typical prices for senior securities backed by option
adjustable-rate mortgages dropped to 68 cents on the dollar last week from 74
cents a month earlier, as concern that the Federal
Reserve will
curb its bond buying roils financial markets, Barclays Plc data show. Such declines are
slowing trading as potential buyers offer bids that sellers consider too low,
and Wall Street banks fail to take up the slack.
Detroit
has muni market on edge - (www.marketwatch.com) Detroit's
restructuring plan by its state-appointed emergency manager is drawing some
criticismin the municipal-bond industry. Just before the small Rhode Island
city of Central Falls filed for bankruptcy in 2011, the state legislature
quietly passed a law that gave holders of the bonds backed by a municipality’s
taxing power first pick of the city’s revenues in a restructuring. It was an unprecedented move, assuring that bondholders would have a
so-called statutory lien on revenues, ultimately giving them full repayment
during Central Falls’ since-concluded Chapter 9 bankruptcy. “That was, in my
opinion, the best orchestrated series of events ahead of a bankruptcy filing to
clarify bondholder priorities,” said Lisa Washburn, managing director at
Municipal Market Advisors. When the city of Detroit unveiled its restructuring
plan 10 days ago, prepared by state-appointed emergency manager Kevyn Orr in an
effort to avoid a bankruptcy filing, the messiness that ensued served as a
stark contrast to the Central Falls case. The proposed plan is
drawing ire across the municipal-bond industry and at the center of the dispute
is the classification of a similar type of bond as in the Central Falls case.
76%
of Americans live paycheck to paycheck - (www.money.cnn.com) Roughly
three-quarters of Americans are living paycheck-to-paycheck, with little to no
emergency savings, according to a survey released by Bankrate.com Monday. Fewer
than one in four Americans have enough money in their savings account to cover
at least six months of expenses, enough to help cushion the blow of a job loss,
medical emergency or some other unexpected event, according to the survey of
1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month
cushion and 27% had no savings at all.m"It's disappointing," said
Greg McBride, Bankrate.com's senior financial analyst. "Nothing helps you
sleep better at night than knowing you have money tucked away for unplanned
expenses."
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