Posts Tagged ‘bailout’
Thursday, March 29th, 2012
Too Big To Fail used to be a joke.
It became an insult hurled by Occupy Wall Street or the Tea Party at the big banks, but that’s all it was.
It was never an expression that had any legitimacy. It was just a nice little way for the media to classify the banking industry in a ready-made slogan.
Guess what? Too Big To Fail isn’t a joke anymore. It’s actual policy towards our nation’s biggest financial institutions.
The Federal Reserve of Dallas has now legitimized my scathing criticisms of the banks in their annual report and it has resonated with with everything I’ve been writing in this blog.
It was a nice early birthday present when I got home yesterday and read the report, written by the head of the Dallas Fed’s research department. Harvey Rosenblum.
When Greg Smith published his critique of Goldman Sachs, the aftershocks rang through the halls of every office on Wall Street.
After reading Rosenblum’s report, which was subtitled “Why We Must End Too Big To Fail — Now”, I can only imagine what will happen now.
It’s about time that someone on the government side validated the anger and anxiety shared by the Occupy and Tea Party movements. Right there in an official Fed paper!!
So what did I find so appealing about his critique? He spells it out, clear as day, what Too Big To Fail really is, and what’s it’s led to.
What It Is: In 1970 the top 5 banks possessed 17% of the nation’s banking assets. In 2010? 52 percent.
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Tags: bailout, bank, banking, banking in the united states, banking industries, banks, biggest banks, dallas, dallas fed, dallas feed, economics, emergency economic stabilization act, fail, Fed, federal deposit insurance corporation, Federal Reserve, federal reserve system, harvey rosenblum, moral hazard, occupy, Occupy Wall Street, protestors, too big, too big to fail, top banks, united states federal banking legislation, wall street
Posted in Big Banks, Federal Reserve, Occupy Wall Street, Too Big To Fail | 2 Comments »
Monday, March 26th, 2012
Could Fannie Mae and Freddie Mac finally be willing to sign off on principal reduction as a way to keep homeowners out of foreclosure and in their homes?
Edward DeMarco, the acting head of the Federal Housing Finance Agency and de facto leader of the two GSEs has been steadfast in his opposition.
President Obama has made principal reduction priority one. It was one of the highlights of the mortgage settlement and many economists point to it as the way out of this housing mess.
But DeMarco still hasn’t budged, because he says principal reduction will cost the taxpayer money and isn’t good for Fannie and Freddie’s bottom line.
Except maybe it is.
According to NPR and ProPublica, executives at both Fannie Mae and Freddie Mac have concluded that principal reduction would prevent larger losses and in fact, save the two companies money.
Their report claims that in part because of new Obama incentives, which would reimburse lenders half of what they write off, that Fannie and Freddie would benefit from principal reduction
These presentations have yet to be made public, but Democrats are already clamoring to see them. And so am I.
Look I’m not saying that principal reduction comes without risk. Could everyone decide to stop paying their mortgages in order to get a write-down? Sure.
But just because you might get hit by a car doesn’t mean you don’t cross the street. The housing market will NEVER rebound if people keep getting kicked to the curb.
And I don’t care what Edward DeMarco has said, the bottom line shouldn’t be his bottom line. It shouldn’t be about what is cost effective, it should be about what keeps borrowers in their homes. Last time I checked, they are taxpayers too.
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Tags: bailout, demarco, Edward DeMarco, fannie, fannie mae, Federal Housing Finance Agency, federal takeover of fannie mae and freddie mac, foreclosure, foreclosures, freddie, Freddie Mac, GSE, homeowners, principal, principal reduction, reduction, subprime crisis impact timeline, subprime mortgage crisis
Posted in Edward DeMarco, Fannie Mae, Freddie Mac, Principal Reduction | No Comments »
Wednesday, January 25th, 2012
Leading up to the State of the Union, we heard a lot of chatter that a proposed $25 billion settlement with the banks would be a selling point in President Obama’s speech.And maybe it would have been, had President Obama delivered the State of the Union. But clearly the person we saw last night addressing Congress was candidate Obama, who is a very different individual.
The State of the Union, at times, felt more like a stump speech that an address from a sitting president. That’s not necessarily a bad thing.
Obama finally sounded like someone willing to play tough with the banks with his ‘No bailouts, no handouts, and no copouts’ line. Only time will tell if this is a true change in the President’s perspective, or if he’ll go right back to being the same man who handed out bailouts like candy.
We were glad to see Obama acknowledge that Wall Street was playing by its own rules, but he had a hand in allowing them to do so, so we hope he understands if we’re still a bit skeptical.
Right before the State of the Union, the Huffington Post broke the news that New York Attorney General Eric Scheniderman has been named to lead a new Unit on Mortgage Origination and Securitization Abuses, which could be a real game-changer. Like the editorial team at Oppenheim Law, Schneiderman has been a vocal critic of the aforementioned settlement.
He has been very tough on the White House’s foreclosure policies before, so maybe we’ll finally see the accountability and thorough investigation that we’ve been demanding.
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Tags: Attorney General, bailout, banking, barack obama, candidate, corner, Eric Scheniderman, Huffington Post, Jekkyl and Hyde, Obama, political, political positions of barack obama, president, presidential election, state of the union, tim geithner, timothy geithner
Posted in Florida Law News, Foreclosure Defense, Foreclosure Fraud, Obama | 2 Comments »
Tuesday, April 5th, 2011
The government official who recently left office over the housing crisis is someone who actually fought for the people instead of laying the groundwork for a cushy job awaiting him in the private sector. Neil Barofsky, the Special Inspector General for TARP resigned his post effective Wednesday, March 30. On his way out the door, he was still publicly arguing with the Treasury over the legacy of the $700 billion dollar Troubled Asset Relief Program (“TARP”).
Glenn Greenwald of Salon.com called Barofsky “easily one of the most impressive and courageous political officials in Washington” for his willingness to stand up to some of the most powerful people, institutions, and special interest lobbies in Washington and Wall Street.
On March 29, before his departure from office, he wrote a piece for the New York Times titled “Where the Bailout Went Wrong.” The piece, so vicious in its criticisms of the TARP program and politicians in Washington, prompted the Wall Street Journal to run excerpts from it along with their own commentary on the TARP fiasco.
Of the failed bailout Barofsky wrote:
“Two and a half years ago, Congress passed the legislation that bailed out the country’s banks. The government has declared its mission accomplished, calling the program remarkably effective ‘by any objective measure.’ On my last day as the special inspector general of the bailout program, I regret to say that I strongly disagree . . . Almost immediately [after passage], as permitted by the broad language of the act, Treasury’s plan for TARP shifted from the purchase of mortgages [that would have helped everyday homeowners] to the infusion of hundreds of billions of dollars into the nation’s largest financial institutions, a shift that came with the express promise that it would restore lending.”
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Tags: bailout, bailouts, economy, foreclosure crisis, Neil Barofsky, Obama, op-ed, Oppenheim Law, Roy Oppenheim, salon.com, TARP, The New York Times, Troubled Asset Relief Program, Where the Bailouts Went Wrong
Posted in Florida Law News, From the Heart, International News, Roy Oppenheim, Salon.com, The New York Times, The Wall Street Journal | No Comments »
Wednesday, August 11th, 2010
Small wonder that HAMP has turned into an embarrassing failure for the Obama administration.
This past weekend, I was in our Nation’s capital. It is always interesting to see things from the inside looking out, as opposed to from the outside looking in. It is like being in a house of mirrors.
One thing is apparent: the Beltway economy is not suffering like places such as Florida, Nevada, and Detroit. As a result, our elected representatives and the administration may not truly understand the depth of the housing crisis. I think they still blame the greed of “over ambitious” homeowners and speculators as opposed to the real driving force: Wall Street, the over-sized “too big to fail” banks and themselves. The buzz, of course, was the fact that Fannie Mae may have been playing its own political three card “monty” with homeowners over the past year. Simply put: whistleblower Caroline Herron, a former Fannie Mae executive and consultant, is suggesting the administration pushed for temporary modifications knowing full well that many of the loan modifications would fail prior to becoming permanent. In fact, Congress is now pushing for hearings.
Fannie Mae executives bungled their responsibilities of the federal government’s massive foreclosure-prevention campaign, creating a bureaucratic muddle characterized by “mismanagement and gross waste of public funds,” according to the suit Herron filed. The suit alleges that the homeowner-relief effort was marred by delays, missteps and executives’ preoccupation with their institution’s short-term financial interests. “It appeared that Fannie Mae officers were focused on maximizing incentive payments available to Fannie Mae under various federal programs – even if this meant wasting taxpayer money and delaying the implementation of high-priority Treasury programs,” Herron claims in the lawsuit.
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Tags: bailout, Caroline Herron, economy, fannie mae, Florida Foreclosure Defense, HAMP, housing crisis, Obama, Obama Administration, Oppenheim Law, Real Estate, real estate attorney, Roy Oppenheim
Posted in International News, Loan Modification, Roy Oppenheim | 2 Comments »
Tuesday, January 5th, 2010
Just as 2009 ended, the Florida Supreme Court announced a uniform procedure for all newly filed foreclosure cases for homestead properties. While the procedure is not yet fully in place, it should be shortly.
The Court acknowledged the system is not working. Foreclosure filings are expected to reach 456,000 cases in Florida by the end of 2010, a 50% increase from those in 2009. Thus, the Court felt compelled to do something.
My free foreclosure and real estate workshop on Thursday, January 7, at 6 p.m. is designed to review the “Year That Was” and preview the “Year That Will Be” based on the New Rules for 2010.
These new rules mean banks will be taken to task by the legal system. If conducted properly, a homeowner can demand proof of the Note and ownership of the loan prior to mediation. If the bank does not show up at the mediation or does not have a person with “true” authority to settle the case, the Court can issues sanctions against the bank and even hit the bank with attorney’s fees in some instances.
Until now approximately 75% of cases in mediation settled. That number should now shrink since the system will soon be overloaded with mediations. The real question is how to take control of this new strategic tool. Of course, one has to be mindful of the old saying, “Be careful what you ask for.” That will certainly be the situation here.
You need to know your objective and have a plan or strategy. Is your desire to walk away without the bank coming after you, or is it to stay and renegotiate the loan to its new underwater value? Or is it to rent the house and just be able to stay?
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Tags: bailout, FL foreclosure, Florida Supreme Court, Foreclosure Defense, foreclosure filings, Foreclosure Workshop, homestead properties, mediation, Oppenheim Law, Roy Oppenheim
Posted in Florida foreclosures, Florida Law News, Florida real estate, Florida short sales, Florida Supreme Court, Foreclosure Defense, Foreclosure Workshop | 7 Comments »
Thursday, December 10th, 2009
For almost three years now I have talked about the idea that the American Dream of homeownership was really only a mirage. While policymakers had good intentions, homeownership has in many instances become the American Nightmare for numerous systematic reasons including: greed, lax government regulation and pure fraud. In a wonderful front page analysis in today’s Wall Street Journal, they take us through the process of why renting is now the “New Normal” and the New American Dream.
Tags: bailout, hoemownership, wall, Wall Street Journal, wsj
Posted in Entrepreneurial News, Florida real estate | No Comments »
Too Big To Fail used to be a joke. 
