Former Mortgage Officer Admits to Fraud
The former treasurer of Taylor, Bean & Whitaker Mortgage Corporation, once one of the largest mortgage lenders in the country, admitted to helping run a $1.9 billion fraud scheme that was directed at the government’s Troubled Asset Relief Program and contributed to the failure of Colonial Bank. The former treasurer, Desiree Brown, 45, pleaded guilty on Thursday in federal court in Alexandria, Va., to wire fraud, securities fraud, and conspiring to commit bank fraud. She also agreed to cooperate with prosecutors in the trial of Lee Farkas, former chairman of Taylor, Bean, on April 4. Ms. Brown also settled civil charges with the Securities and Exchange Commission, the S.E.C. said. http://www.nytimes.com/2011/02/25/business/25mortgage.html?src=buslnFormer NJ Credit Union CEO McGrath Gets 14 Years in Prison
Michael McGrath, the former CEO of CU National Mortgage, was sentenced to 14 years in prison today for his part in a scheme which saw some credit union mortgages fraudulently sold on the secondary market…According to an FBI release, McGrath admitted in court he “conspired with several others” over a five-year period to fraudulently sell credit union loans, using the proceeds to address cash flow problems created by losses on investments in mortgage-backed securities. At first, McGrath began pilfering funds from credit union mortgages authorized to be sold to Fannie Mae. However, as U.S. Mortgage’s financial condition continued to deteriorate, McGrath admitted to selling hundreds of mortgage loans to Fannie Mae without the knowledge and consent of owning credit unions. http://www.cutimes.com/News/2011/2/Pages/Former-Mortgage-CEO-McGrath-Gets-14-Years-in-Prison.aspx
Treasury Names Five CFPB Leaders
During a week of financial regulation funding discussions prompted by the release of President Obama’s proposed 2012 budget, the U.S. Treasury Department announced hires for the leadership of the CFPB implementation team on Thursday. Elizabeth Warren…outlined the team: Raj Date as Associate Director for Research, Markets and Regulations; Patricia McCoy to lead the Mortgage and Home Equity Markets team; and Cory Stone as leader of Credit Information Markets. Other team members announced were Zixta Martinez, who will serve as assistant director for community affairs and Elizabeth Vale as assistant director for community banks and credit unions. http://reversemortgagedaily.com/2011/02/23/treasury-names-five-consumer-financial-protection-bureau-leaders/
Stay-at-Home Moms at Fed’s Door as Rule Tightens Card Access
Charged with writing rules implementing the 2009 law designed to curb credit-card abuses, the Fed late last year proposed that card companies consider “individual” rather than “household” income or assets when issuing cards. The change, say lawmakers who worked on the measure, is meant to prevent banks from issuing credit cards to college students who then run up thousands of dollars in debt and have no ability to pay… In its November proposal, the Fed said those without an income could get a credit card if a spouse co-signed the application. Some Fed critics say the proposal makes the central bank look like it is stuck in the 1950s, when women needed their husbands’ signatures even to open bank accounts. http://www.bloomberg.com/news/2011-02-24/stay-home-moms-at-fed-s-door-as-rule-tightens-credit-card-access.html?cmpid=msnmoney
U.S. foreclosure deal slowed by infighting: sources
U.S. regulators’ efforts to settle with banks over improper mortgage foreclosures are being hampered by disagreements among the groups involved over the size and shape of an accord, according to sources familiar with the matter. Officials at the Federal Deposit Insurance Corporation, the Federal Housing Administration, and those now creating a fledgling consumer financial protection bureau are inclined to seek as much as $30 billion in fines, making those funds available to provide relief to borrowers at risk of losing their homes. http://www.reuters.com/article/2011/02/24/us-usa-foreclosures-settlement-idUSTRE71N54B20110224
GOP wants to axe taxpayer funds for troubled homeowners
A top House Republican has announced plans Thursday to begin efforts to dismantle a package of Obama administration programs seeking to help troubled homeowners avoid foreclosure, an effort that is unlikely to become law any time in the near future because of staunch Democratic opposition. House Financial Services Committee Chairman Spencer Bachus, (R., Ala.) said he plans to hold a vote on March 3 on legislation to terminate the Home Affordable Modification Program, the Neighborhood Stabilization Program and other programs. http://blogs.marketwatch.com/election/2011/02/24/gop-wants-to-axe-taxpayer-funds-for-troubled-homeowners/
Buffalo Firm Dominates Foreclosures, but Faces Growing Criticism
Attorneys who represent lenders bringing foreclosures are “an easy target for criticism” in the current economic climate, says Steven J. Baum, who runs by far the largest New York state firm offering services to what its website calls the “default industry.” Indeed, Baum and his firm, Steven J. Baum, P.C., have faced increasing criticism with a surge in foreclosures sought by client lenders, who have been struggling to mop up the financial debris from the burst housing bubble. The once-obscure Buffalo-area firm has become a fixture in courthouses throughout the state. Last year, it sought judicial action in 17,620 foreclosure cases, nearly 40 percent of the 46,572 reported by the court system. (The statewide total has more than doubled from the 22,601 recorded in 2005). While Baum’s business has soared, however, his firm has been reviled as a “foreclosure mill” that tramples on the rights of homeowners. http://www.law.com/jsp/article.jsp?id=1202482932807&Firm_Dominates_Foreclosures_but_Faces_Growing_Criticism&slreturn=1&hbxlogin=1
Brooklyn mortgage biz for MetLife
MetLife’s push into the mortgage origination business is taking it to Brooklyn. The New York business known for insurance, annuities and employee benefit programs is opening a Park Slope office that will have 10 to 15 mortgage representatives…MetLife has a Manhattan office it opened last year with 35 to 40 representatives. Overall, it still has a small city residential mortgage presence, which funded 229 area sales in 2010, a company spokesman said. Last year, MetLife hired former Countrywide retail chief Brian Hale in an effort to become one of the top mortgage originators in the country. http://www.nypost.com/p/news/business/klyn_mortgage_biz_for_metlife_sQjwE3HnpeXffVFzpPIp0I
Regulators Decry Proposed Cuts in C.F.T.C. Budget
Top regulators of the derivatives markets are fighting back against a Congressional assault on their budget, arguing that funding cuts will derail a much-needed overhaul of the $600 trillion industry. The Republican-led House of Representatives passed a federal spending plan on Saturday that would cut the Commodity Futures Trading Commission’s budget by a third. http://dealbook.nytimes.com/2011/02/24/regulators-decry-proposed-c-f-t-c-budget-cuts/
SEC to reexamine proposal on clearing voting curbs
The U.S. Securities and Exchange Commission announced its plans on its website on Thursday. In addition to reexamining the clearinghouse conflicts rule, the SEC will take action on a meaty list of other agenda items, including proposals on incentive-based compensation practices at Wall Street firms, the operation and governance of clearing agencies and stripping more references to credit-ratings from U.S. regulations. The public meeting is slated for March 2. http://www.reuters.com/article/2011/02/24/us-financial-regulation-sec-idUSTRE71N5NE20110224
Freddie Mac Executive Receives Wells Notice
Securities regulators may soon file civil charges against a top executive at the mortgage finance company Freddie Mac, according to a public filing released on Thursday. Donald J. Bisenius, an executive vice president at Freddie Mac, recently received a so-called Wells notice from the Securities and Exchange Commission, the filing said. The agency sends the notices when it is considering an enforcement action against someone. http://dealbook.nytimes.com/2011/02/24/freddie-mac-executive-receives-wells-notice/
How dictators stash their cash 101: Swiss freeze Qaddafi assets
Despite its reputation for banking secrecy – and precisely because the government has tried to challenge its stereotype as a financial refuge for ex-dictators and war criminals – Switzerland has among the most progressive anti-money-laundering laws. Indeed, Swiss law is today a model for other nations. Its 1983 Federal Act on International Mutual Assistance in Criminal Matters was first used 25 years ago to freeze the assets of the Philippines’ Ferdinand Marcos, ousted in a 1986 coup. Another 1998 law required banks to ascertain the “beneficial owner” of accounts – that is, the man behind the lawyers. On the basis of those laws, the Swiss government recently froze accounts belonging to Egypt’s Hosni Mubarak, Tunisia’s Zine El Abidine Ben Ali, Ivory Coast’s Laurent Gbagbo, and now Libya’s Muammar Qaddafi. And thanks to Switzerland’s new Return of Illicit Assets Act, which took effect Feb. 1 and allows the Swiss government to determine the legality of funds of any person hailing from a “failing state,” the account of Haiti’s Jean-Claude “Baby Doc” Duvalier is now under investigation. http://www.csmonitor.com/World/Global-Issues/2011/0225/How-dictators-stash-their-cash-101-Swiss-freeze-Qaddafi-assets
Ireland Winding Down 2 Banks With Deposit Shift
Ireland took a major step Thursday to bring the curtain down on two of its most troubled banks — Anglo Irish Bank and Irish Nationwide Building Society — by transferring 12.2 billion euros in deposits to two larger institutions. The Finance Ministry said that the country’s High Court had approved the transfer of the assets, which is required under the loan deal that Ireland struck with the International Monetary Fund and the European Union last autumn. Anglo Irish, the bank that had led the real estate lending frenzy in Ireland before it had to be nationalized, will transfer 8.6 billion euros worth of deposits held by its branches in Ireland, Britain and the Isle of Man to Allied Irish Banks, another effectively nationalized, but much larger, institution. Irish Nationwide Building Society, or I.N.B.S., is transferring 3.6 billion euros worth of deposits in 160,000 accounts to Permanent TSB, the banking arm of the insurer Irish Life and Permanent. http://dealbook.nytimes.com/2011/02/25/ireland-winding-down-2-banks-with-deposit-shift/
Korea Exchange Imposes Record Fine on Deutsche Unit
Korea Exchange said Friday that it had decided to impose a record fine of 1 billion won on the local subsidiary of Deutsche Bank for breaching the rules of the bourse during an enormous stock sell-off last November. The fine, worth $887,000, is four times the previous record imposed by the exchange, a measure of the gravity of the bank’s offense, which involved filing a report on its trades one minute late. The exchange, known as KRX, has called on the the subsidiary, Deutsche Securities Korea, to fire or suspend from duty one unidentified employee, and demote or reprimand two others. http://dealbook.nytimes.com/2011/02/25/korea-exchange-imposes-record-fine-on-deutsche-unit/
Private Hiring and Government Layoffs
In my column this week, I mention that government employment and private sector employment have both fallen during the last two years. Over just the last year, private employment has risen — though more slowly than the population has been growing — while government employment has continued falling. These numbers make clear that a surge of government hiring can’t be the economy’s problem right now — because there has been no surge. Here are the changes in government and private employment since January 2009, stated in thousands: http://economix.blogs.nytimes.com/2011/02/22/private-hiring-and-government-layoffs/
Budget Division says M/Cs not in current step pie
We reported Wednesday that the state budget includes $140 million to cover step increases for 50,000 PEF and CSEA members, as well as longevity payments to workers who have labored at their job rate for at least five years. Those unions’ contract expires April 1, and under the Triborough Amendment, the steps will go through, despite Gov. Andrew Cuomo’s call for a wage freeze. M/Cs, however, get no such protection. Budget Division spokesman Jeffrey Gordon told me the $140 million pot is now devoted to the unionized workers. Asked if M/Cs will also get their steps, he said only, “All workforce issues are still under discussion.” Gov. David Paterson denied M/Cs their step increases in 2009, but paid them (at the 2008-09 level) in 2010. Joseph Sano, leader of the Organization of Management Confidential Employees, said he believed the M/C steps could be paid using the $140 million, and it was his understanding that they would.
http://blog.timesunion.com/capitol/archives/58295/budget-division-says-mcs-not-in-current-step-pie/
State Proposal Would Limit Annual Medicaid Rise
Foregoing a planned second day of discussion, Gov. Cuomo’s Medicaid Redesign Team beat its deadline by a week and approved a slate of 79 proposals designed to save $2.3 billion in the 2011-2012 fiscal year. http://www.nytimes.com/2011/02/24/nyregion/24medicaid.html?src=me&ref=nyregion
Andrew Cuomo and the unions | The governor’s showdown is more subtle
IN 1975, when New York City teetered toward bankruptcy, Hugh Carey, then the governor of the state of New York, convinced the teachers’ union to invest a significant amount of its pension funds in bail-out bonds. He also persuaded District Council 37 to shelve pay increases for its municipal workers. The unions played a crucial role in saving the city and probably the state with it. Thirty-five years later, during his gubernatorial campaign, Andrew Cuomo gave copies of “The Man Who Saved New York”, an account of Mr Carey’s role in the crisis, to labour leaders. Seymour Lachman, the book’s co-author, reckons that, like Mr Carey, Mr Cuomo wants and needs the unions’ help in surviving the current crisis. http://www.economist.com/node/18231506?story_id=18231506&fsrc=rss
Editorial | Gov. Cuomo’s Friend
Gov. Andrew Cuomo of New York has promised “zero tolerance” of ethical lapses. His close ties with Jeffrey Sachs, a longtime friend and health care adviser, are raising questions about that commitment. As Nicholas Confessore wrote in The Times this week, Mr. Sachs runs a health care consulting business. Since Mr. Cuomo was elected, some of Mr. Sachs’s clients have found Albany to be particularly welcoming. After The Times’s article was published, a spokesman for Mr. Cuomo insisted that since “nobody in the administration knows” Mr. Sachs’s clients, “the innuendo of the story is totally irrelevant.” That doesn’t sound like “zero tolerance” to us. The State Commission on Public Integrity needs to figure out whether the change was an effort by someone in government to curry favor with the governor-elect. Mr. Cuomo should support that investigation. http://www.nytimes.com/2011/02/25/opinion/25fri3.html?ref=opinion
GOP softens its attack on collective bargaining issue to avoid protests
Republican leaders in several states softened their attacks on public employee unions Thursday in an effort to avert the fiery demonstrations that have gripped Wisconsin’s state capitol for days. In Ohio, Republican lawmakers agreed to modify a bill that would have banned collective bargaining, allowing state workers to negotiate on wages. Michigan’s GOP governor offered to negotiate with public employees rather than create political gridlock. Likewise, Indiana’s Republican governor, Mitch Daniels, called on GOP lawmakers to abandon a bill that would have made it a misdemeanor for an employer to require workers to become or remain members of a labor union. Even in Wisconsin — where more than 60,000 demonstrators have camped out at the state Capitol for the past week to protest a budget plan by Gov. Scott Walker that would end collective bargaining rights for public employees — Republicans and Democrats took a small but significant step towards resolving their clash. http://www.timesunion.com/news/article/GOP-easing-up-on-unions-1029964.php
RoAnn Destito plans to leave Assembly to Run GAO
After 19 years representing the Utica-Rome area on the state Assembly, RoAnn Destito is planning to leave her seat to become commissioner of the state Office of General Services, she said Thursday. Gov. Andrew Cuomo, a Democrat, announced Thursday that he nominated Assemblywoman Destito, D-Rome, to the commissioner position. The nomination still requires approval from the state Senate. http://www.uticaod.com/features/x763563755/Andrew-Cuomo-nominates-RoAnn-Destito-as-new-Office-of-General-Services-commissioner
Assembly Speaker Sheldon Silver discreetly submits Cuomo’s plan for legislative redistricting
Cuomo’s goal is aimed at breaking the cycle of majority parties using political clout to redraw the lines in favor of incumbents. Despite a lukewarm response when Cuomo unveiled the plan last week, Silver last week discreetly submitted the proposal to the Assembly’s government operations committee. His aides sought to beef up support yesterday by asking various assemblymen to sign on as co-sponsors. The move comes in advance of a planned Tuesday trip to the Capitol by former Mayor Ed Koch, who has led a reform effort and will call on lawmakers to approve an independent redistricting commission. http://www.nydailynews.com/ny_local/2011/02/25/2011-02-25_silver_quietly_pushes_govs_redistricting_plan.html
Trade Center Transit Hub’s Cost Now Over $3.4 Billion
Four years ago, the Port Authority of New York and New Jersey said a $3.4 billion price tag for its new transportation hub at the World Trade Center site would be “simply unacceptable.” On Thursday, the authority accepted it. The birdlike glass-and-steel transit center, designed by the Spanish architect Santiago Calatrava and intended as a connection point for PATH and subway trains, is now expected to cost $3.44 billion, allowing for the steeply increased cost of the steel framework, Port Authority officials said. The higher price, which will require the authority to dip into a contingency fund for the project for the first time, represents a 5.5 percent increase from the agency’s last estimate of $3.26 billion, issued in 2008. http://www.nytimes.com/2011/02/25/nyregion/25ground-zero.html?_r=1&ref=nyregion
Congressional colleagues send letter to SEC on Madoff commission’s top lawyer
U.S. Rep. Scott Garrett (R-NJ) and three congressional colleagues sent a letter demanding “prompt answers” from the SEC regarding recent reports that the commission’s top lawyer and his family earned more than $1.5 million from Bernie Madoff’s fraudulent financial scheme.
http://www.nydailynews.com/sports/baseball/2011/02/24/2011-02-24_new_jersey_congressman_demands_prompt_answers_from_sec_about_top_lawyers_madoff_.html
MTA HR staffer is being investigated for allegedly taking bribes in exchange for entry-level jobs
An MTA Human Resources staffer is under investigation for taking cash payments from job hunters in a pay-to-work scheme, the Daily News has learned. Ronica Ganesh, 28, is suspected of promising applicants she could snag them entry-level subway mechanic positions for at least $1,000, sources said. The Metropolitan Transportation Authority inspector general’s office and Manhattan prosecutors are also probing whether Ganesh fudged applicants’ test scores for an additional $500, sources said. http://www.nydailynews.com/ny_local/2011/02/25/2011-02-25_mta_probes_hr_staffer_in_bribesfortransit_work_scam_fasttracking_jobs_for_cash.html
NYC is looking for deals with the private sector
NYC is looking for deals with the private sector that will help it squeeze more cash out of assets like real estate and parking lots and meters. The move is part of a push led by Deputy Mayor Stephen Goldsmith that seeks to cut costs and increase revenue by changing how the city manages everything from treated sewage to the lights in schools. http://online.wsj.com/article/SB10001424052748703408604576164710761792994.html?mod=WSJ_NY_LEFTTopStories
Torch run ignites Empire State Winter Games
When Lake Placid Olympic Center Manager Denny Allen passed a lit torch to 15-year-old Austin Morris yesterday morning in front of the Essex County courthouse, it not only marked the beginning of this year’s Empire State Winter Games but also the start of a new era for the event. http://www.adirondackdailyenterprise.com/page/content.detail/id/523175/Torch-run-ignites-Empire-State-Winter-Games.html?nav=5047
Owner alters strategy for site
Watertown developer Michael Treanor has come up with an alternative plan to develop the vacant Woolworth Building: convert the Public Square landmark into apartments…In recent weeks, the Woolworth Building has come up as a topic at Advantage Watertown and Watertown Local Development Corp. meetings because city officials and business leaders were worried about the potential loss of a $2.5 million Restore New York grant if Mr. Treanor didn’t act quickly and come up with an alternative plan. http://www.watertowndailytimes.com/article/20110224/NEWS03/302249964
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