News Clips – Wednesday, November 2, 2011

Wells Fargo pulls out of MBIA transformation lawsuit – HousingWire Posted on November 2, 2011  by admin

Wells Fargo dropped out of a high-profile lawsuit that publicly challenged monoline insurer MBIA’s structural transformation in the wake of the financial crisis. The original suit, which included Wells Fargo and 21 other banking entities, challenged MBIA’s plan to transform its business under New York state’s Article 78. The complaint was filed after MBIA created a second mortgage insurer using $5 billion siphoned from the company’s original insurance subsidiary. Financial firms involved in the suit ended up challenging MBIA’s structural transition and the New York Insurance Department’s approval of the plan. Wells Fargo pulls out of MBIA transformation lawsuit « HousingWire .

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AIG Repays $972 Million to Treasury, Using Alico Proceeds – Bloomberg Posted on November 2, 2011  by admin   American International Group Inc. (AIG), the bailed-out insurer, repaid an additional $972 million to the government, reducing its obligation to the U.S. Treasury Department to about $50 billion. The payment was made mostly with proceeds from New York- based AIG’s sale of American Life Insurance Co. to MetLife Inc.  for about $16 billion last year, the Treasury said in an e- mailed statement today.  AIG Repays $972 Million to Treasury, Using Alico Proceeds – Bloomberg . Posted in Insurance Industry , TARP  | Comments Off

Cuomo signs legislation requiring insurers to cover autism disorders – Albany – The Buffalo News Posted on November 2, 2011  by admin   A measure requiring health insurers to cover autism disorders was signed into law Tuesday, making New York the 29th state to enact such coverage mandates for the complex neurobiological disorder. An estimated 30,000 children in New York are afflicted by autism spectrum disorders, such as Asperger’s and Rett’s disorder, that affect social skills and learning abilities…Cost estimates for insurers and ultimately policyholders vary, but the legislation’s fiscal impact statement said insurance expenses overall would rise one-half of 1 percent. The note said other states with similar laws have seen “very modest” cost increases.  Cuomo signs legislation requiring insurers to cover autism disorders – Albany – The Buffalo News . Posted in Autism & Insurance , Insurance Industry  | Comments Off

Manhattan U.S. Attorney Sues Allied Home Mortgage, CEO, and Executive Vice President for Fraudulent Lending Practices – Insurance News Posted on November 2, 2011  by admin   Manhattan U.S. Attorney Sues Allied Home Mortgage, CEO, and Executive Vice President for Fraudulent Lending Practices Currently Associated with $834 Million in Insurance Claims Paid by HUD. The U.S. Attorney for the Southern District of New York issued the following news release: Insurance News – Manhattan U.S. Attorney Sues Allied Home Mortgage, CEO, and Executive Vice President for Fraudulent Lending Practices Currently Associated with $834… . Posted in Mortgage Industry  | Comments Off

Berkshire Bank closing former Legacy branch in downtown Albany – The Business Review Posted on November 2, 2011  by admin   Berkshire Bank plans to close a former Legacy Banks branch in downtown Albany. Pittsfield, Mass.-based Berkshire, which acquired Legacy in June, notified the New York state Department of Financial Services in late October of plans to close the office at 39 North Pearl St. Berkshire Bank closing former Legacy branch in downtown Albany – The Business Review . Posted in Department of Financial Services (DFS)  | Comments Off

The Canadian Jewish News – German casino returns valuable painting Posted on November 2, 2011  by admin   A German casino has returned a Nazi-looted painting to the university heirs of the estate of the German-Jewish Montreal art dealer Max Stern. Representatives of Concordia University, acting on behalf of the executors of the estate and its two other main beneficiaries, McGill University and Hebrew University of Jerusalem, were in the Netherlands Oct. 25 for the unveiling of the Dutch Old Master oil that has been restituted by the unidentified German company. The return of The Masters of the Goldsmith Guild in Amsterdam in 1701 by Juriaen Pool II (1665-1745) took place at the Amsterdam Museum. The work is valued at close to $1 million. The Canadian Jewish News – German casino returns valuable painting . Posted in Holocaust Claims , Looted Art  | Comments Off

CFPB now employs 700 staffers – HousingWire Posted on November 2, 2011  by admin   The Consumer Financial Protection Bureau employs a staff of 700 after conducting a three-month hiring spree, the new regulator’s special adviser Raj Date said Tuesday. Date, who serves as special adviser to Treasury Secretary Timothy Geithner, said many of the CFPB’s employees were hired away from the consumer protection divisions of other state and federal regulators. Date issued this employment update while testifying before the House Subcommittee on Financial Institutions and Consumer Credit. The de facto CFPB leader said the bureau’s troop of bank examiners is already on-site at big banks to review the lenders’ operations and practices. The agency also is fielding complaints from consumers. v CFPB now employs 700 staffers « HousingWire . Posted in CFPB , Consumer Protection  | Comments Off

Attorney Steven J. Baum just doesn’t get it – Business First Posted on November 2, 2011  by admin   The Baum story has gone worldwide. Yahoo, Huffington Post, cable news, everyone is jumping on the chance to vilify a firm that certainly seems anything but sympathetic. I reached back out yesterday for comment from Baum. Sure, I knew he wouldn’t talk to me, but how about a statement? As I was writing this, the statement arrived.  Attorney Steven J. Baum just doesn’t get it – Business First . Posted in Foreclosure & Mortgage Mods  | Comments Off

Banks reach out to foreclosed borrowers – Reuters Posted on November 2, 2011  by admin   Banks and other mortgage servicers have begun mailing letters to more than 4 million borrowers who can have their cases reviewed by independent consultants hired by the banks, U.S. banking regulators announced. A website — here  — and a call center have also been created for borrowers to find out how they can have their case reviewed. Banks reach out to foreclosed borrowers | Reuters . Posted in Foreclosure & Mortgage Mods  | Comments Off

Time for No-Fault Reform – National Underwriter Posted on November 2, 2011  by Ins News   Over the past few years, increasing frustration with fraud, abuse and massive cost increases in several jurisdictions has forced legislators and regulators to take a serious look at reform of their state’s no-fault laws. http://www.propertycasualty360.com/2011/11/01/time-for-no-fault-reform?t=personal Posted in Insurance Industry , Insurance Regulation , No-Fault Insurance , Uncategorized  | Comments Off

G.A.O. Says New York Fed Failed to Push A.I.G. Concessions – NYTimes.com Posted on November 1, 2011  by admin   The findings of a federal investigation released Monday raised new questions about the Federal Reserve Bank of New York’s handling of the 2008 bailout of American International Group. The report, by the Government Accountability Office, says that New York Fed officials have offered inconsistent explanations for their decision to pay other financial companies the full amounts they were owed by A.I.G., and that some of the explanations were contradicted by other evidence. The report also asserts that the decision to pay the full amounts, rather than seeking concessions as the government later did in other cases, disregarded the expectations of senior Fed officials in Washington and the expressed willingness of some of the companies to accept smaller payments.  G.A.O. Says New York Fed Failed to Push A.I.G. Concessions – NYTimes.com . Posted in Insurance Industry  | Comments Off

4M Homeowners Eligible for Foreclosure Review – NYTimes.com Posted on November 1, 2011  by admin   Up to 4 million borrowers who may have been improperly foreclosed upon in 2009 and 2010 are getting an opportunity to have their cases reviewed. The Office of the Comptroller of the Currency says mortgage services will begin sending out letters this month that ask borrowers if they want their case reviewed. The nation’s 14 largest mortgage servicers — including Citibank, Bank of America, JPMorgan Chase, and Wells Fargo — were ordered to offer to review cases after the government found that some rushed the foreclosure process without carefully reviewing documents.  4M Homeowners Eligible for Foreclosure Review – NYTimes.com . Posted in Foreclosure & Mortgage Mods , Mortgage Industry  | Comments Off

Bank of America Drops Plan for Debit Card Fee – NYTimes.com Posted on November 1, 2011  by admin   The reversal follows a huge backlash from customers, one of whom collected more than 200,000 signatures urging the bank to rethink its plan. The bank listened, but only after other large banks had indicated that they would not impose similar fees. Wells Fargo, JPMorgan Chase, SunTrust and Regions Financial have all pulled back on their plans.  Bank of America Drops Plan for Debit Card Fee – NYTimes.com . Posted in Bank Products, Fees & Accounts , Consumer Protection  | Comments Off

Feds Sue Mortgage Broker, Alleging Lending Fraud – NYTimes.com Posted on November 1, 2011  by admin   The federal government sued one of the nation’s largest privately held mortgage brokers on Tuesday, saying its decade-long fraudulent lending practices cost the government hundreds of millions of dollars and forced thousands of American homeowners to face eviction. The lawsuit in U.S. District Court in Manhattan sought unspecified damages and civil penalties and named as defendants Houston-based Allied Home Mortgage Corp., founder Jim Hodge and Jeanne Stell, the company’s executive vice president and director of compliance.  Feds Sue Mortgage Broker, Alleging Lending Fraud – NYTimes.com . Posted in Mortgage Industry  | Comments Off

Buy Here, Pay Here – A vicious cycle in the used-car business – latimes.com Posted on November 1, 2011  by admin   Squeezing hefty payments from credit-challenged people is possible because Buy Here Pay Here dealers don’t use outside lenders to finance their sales. In a conventional auto loan, the dealer is a middleman. The purchase money is provided by a bank or finance company. In a Buy Here Pay Here loan, there is no outside money. The cars are sold on installment plans, an approach once common for big-ticket purchases like refrigerators and still widely used by rent-to-own furniture stores catering to people who don’t have credit cards. The arrangement allows Buy Here Pay Here dealers to make their own rules and set their own interest rates, with far less regulatory scrutiny than mainstream lenders receive. “This is not the car business. This is the finance business,” said Ken Shilson, an accountant who founded the National Alliance of Buy Here Pay Here Dealers in Houston. “Not everybody has the stomach for it.” A vicious cycle in the used-car business – latimes.com . Posted in Consumer Protection , Predatory Lending  | Comments Off

Fannie, Freddie dole out big bonuses – POLITICO.com Print View Posted on November 1, 2011  by admin   The Obama administration’s efforts to fix the housing crisis may have fallen well short of helping millions of distressed mortgage holders, but they have led to seven-figure paydays for some top executives at troubled mortgage giants Fannie Mae and Freddie Mac. The Federal Housing Finance Agency, the government regulator for Fannie and Freddie, approved $12.79 million in bonus pay after 10 executives from the two government-sponsored corporations last year met modest performance targets tied to modifying mortgages in jeopardy of foreclosure. The executives got the bonuses about two years after the federally backed mortgage giants received nearly $170 billion in taxpayer bailouts — and despite pledges by FHFA, the office tasked with keeping them solvent, that it would adjust the level of CEO-level pay after critics slammed huge compensation packages paid out to former Fannie Mae CEO Franklin Raines and others. Fannie, Freddie dole out big bonuses – POLITICO.com Print View . Posted in Foreclosure & Mortgage Mods , GSEs , Mortgage Industry  | Comments Off

Angry bank clients to switch Nov. 5 | Bankrate.com Posted on October 31, 2011  by admin   There’s a bank protest afoot that doesn’t involve camping, picketing or being gawked at by the national media. It’s called “Bank Transfer Day,” and it’s a social-media driven movement started by art gallery owner Kristin Christian. It aims to convince bank customers angered by new fees to move their money en masse to small banks or credit unions on Nov. 5. The movement has largely been orchestrated through Facebook, where the page has nearly 24,000 likes and numerous comments left by supporters and critics alike. Christian herself has been careful to keep the movement nonpartisan and distance it from the Occupy Wall Street protests happening in metro areas all over the country.  Angry bank clients to switch Nov. 5 | Bankrate.com . Posted in Bank Products, Fees & Accounts , Consumer Protection  | Comments Off

Cheat Sheet: What’s Happened to the Big Players in the Financial Crisis – ProPublica Posted on October 31, 2011  by admin   Widespread demonstrations in support of Occupy Wall Street have put the financial crisis back into the national spotlight lately. So here’s a quick refresher on what’s happened to some of the main players, whose behavior, whether merely reckless or downright deliberate, helped cause or worsen the meltdown. This list isn’t exhaustive — feel welcome to add to it. Cheat Sheet: What’s Happened to the Big Players in the Financial Crisis – ProPublica . Posted in Consumer Protection  | Comments Off

A Foreclosure Settlement That Wouldn’t Sting – NYTimes.com Posted on October 31, 2011  by admin   AFTER months of back and forth, a deal that is supposed to punish large financial institutions for foreclosure misconduct may be nigh. While the exact terms remain under wraps, some aspects of this agreement — between banks on one side, and the federal government and a raft of state attorneys general on the other — are coming into focus. Things could change, of course, and the deal could go by the boards. But here’s the state of play, according to people who have been briefed on the negotiations but were not authorized to discuss them publicly.  A Foreclosure Settlement That Wouldn’t Sting – NYTimes.com . Posted in Foreclosure & Mortgage Mods  | Comments Off

Credit-Default Swap Risk Bomb Is Wired to Explode: Mark Buchanan – Bloomberg Posted on October 31, 2011  by admin   This hidden network has been created by institutions that buy and sell unregulated credit-default swaps. These are essentially insurance contracts on bonds; in the event of a default on the bond, the seller of the swap promises to pay the buyer the bond’s value. Credit-default swaps are mostly arranged “over-the-counter,” not traded on any exchange or recorded by any central information repository…But these undisclosed ties matter a lot. They were the primary reason the U.S. government needed to intervene in 2008 to prevent the collapse of insurance giant American International Group Inc. Ignoring the looming trouble with subprime mortgages, AIG had blithely sold CDS contracts insuring mortgage-backed securities to Goldman Sachs Group Inc., Societe Generale SA, Deutsche Bank AG and other firms. Suddenly, AIG was potentially on the hook for almost half a trillion dollars in payments. Through CDS contracts, AIG’s failure could have spread distress throughout the global financial system.  Credit-Default Swap Risk Bomb Is Wired to Explode: Mark Buchanan – Bloomberg . Posted in Derivatives , Insurance Industry  | Comments Off