The clock may have run out on this year’s Super Bowl (Way to go Giants!!) but there’s still a few minutes left in this year’s REAL grudge match, the Banks vs. the Attorney Generals.
It’s 4th and Inches, the score is tied, and it would be nice to avoid overtime.
Today we could learn whether the much-discussed robo-signing settlement with Wells Fargo, Bank of America, JP Morgan Chase, Ally Financial and CitiGroup will come to pass, and in what form.
With California AG Kamala Harris returning to the negotiating table, the deal looks closer than ever to being sealed. Harris, who represents the state with the largest amount of foreclosed homes, has rightfully been hesitant to sign off because her state has the most to gain, or lose, from this deal.
We were initially very hesitant to see this deal go through ourselves, but the time has come for it to put to bed.
Why?
Because we feel the deal in its current form does a lot. Does it help every single homeowner who’s underwater? Of course not. There is no deal that will.
But here is who it does help. The homeowners who have fought to keep their homes from day one, who were at the forefront of these legal challenges against the banks. Much of what we have learned about robo-signing and the lack of standing banks had to bring foreclosure, would not have come to light without these crusaders, and its time they got a reprieve.
In theory it also helps the responsible homeowners, the ones who paid their mortgages on-time and whose homes went underwater through no fault of their own. They too need to be rewarded. (more…)
In the absolutely-not-surprising-in-any-way file, one of the 300 homeowners who went before a Seminole County judge during a three day session this week thinks he was treated flimsily by the court.
Blaize McMonagle told ABC News that Judge Alan Dickey sped through his case without being given the chance to defend himself.
Dickey was quoted in the Orlando Sentinel earlier in the week stating that he was only going to be able to give each defendant about 30 seconds if everyone showed up. With retired judges no longer aiding to help navigate through the foreclosure backlog, we expect to see more and more complaints from homeowners.
Our skepticism about Florida’s Hardest Hit Program being able to help homeowners in the long-run was confirmed in the Palm Beach Post this week. Sheryl Stuart, a Jupiter homeowner enrolled in the federally-funded program since September said she had doubts she’d ultimately be able to stay in her home once the payments ended because the salary at her new job wouldn’t cover her mortgage.
We believe the program might only delay the inevitable, and only with substantive help like principal reduction will homeowners have a real chance to get back on their feet.
UPDATE: After Stuart was profiled by the Post, she found out her payments, which are set to end in February, are being suspended because she also owns two condos, which are also in foreclosure. She claims the credit counselor who helped her with application for Hardest Hit was aware of this and never informed her of the limit. (more…)
We’ve all been reading with horror about the developing situation in Italy with the Costa Concordia, the cruise ship that capsized last Friday, killing several people.
What really caught our attention is the actions of the ship’s captain Francesco Schettino, who reportedly abandoned ship in the middle of the evacuations. He’s been blamed for causing the tragedy by recklessly taking the ship off-course and too close to shore
We can not compare the loss of life with the foreclosure crisis, but an argument can certainly be made that there is a parallel between the captain’s actions and that of big banks.
Banks have also been reckless, taking the economy from its intended destination and showing a complete lack of disregard with their shady real estate and foreclosure practices. We believe they have abandoned the homeowner and the taxpayer, while failing to consider their well-being and solely worrying about their own self-preservation.
Whereas the cruise line’s executives have quickly held the captain accountable, we’ve yet to see our federal government do the same to the banks, despite countless opportunities to do so.
In this excellent editorial published in the New York Times, the paper calls on President Obama to steer this ship back on course by forming an inter-agency task force to investigate the banks for their actions, many of which could be considered criminal.
Yes there’s been investigations and settlements, but there’s been very little accountability for the top executives, who’ve been rarely held personally responsible. For example Angelo Mozilo, the former chief executive of Countrywide, didn’t have to admit to any wrongdoing when he settled civil fraud charged level by the SEC. Yes he had to pay a 67.5 million dollar fine, but that’s a fraction of the 521.5 million he’s reported to have received between 2000 and 2008, according to the NY Times. (more…)
Three cheers for Sheila Bair, the former head of the FDIC and a true advocate for the little guy, who resigned this week on July 8th. She fought for what is right for the homeowner, the depositor and the taxpayer.
Shelia was probably the only person in the Obama administration who really “got it.”
As a financial regulator, she understood the crisis as we do at Oppenheim Law, on the ground and in the trenches.
Truly the champion of the little guy, Sheila really understood that there were two sets of rules in this country:one set for big banks and another set for everyone else.
Her opinion was always dismissed and considered inferior to that of the Treasury and the Federal Reserve. She knew that the Obama Administration, while maybe understanding the plight of the little guy, always capitulated to the interests of big business, Wall Street and the banks.
Sheila understood that from Day One her responsibility was to protect the consumer, the depositor, the homeowner, and most importantly, the taxpayer. In a major piece written in the New York Times magazine this past weekend, she questioned why investment banks that were “counterparties” to AIG, like Goldman Sachs, received 100 cents on the dollar from the AIG bailout. Goldman, in fact, received over $12 billion from the bailout. As is well known, many people in the administration were in fact in some way connected to Goldman.
Before the crisis had truly descended upon our nation in 2007, Sheila understood that if banks were required to modify mortgages there was a possibility that the foreclosure crisis which led to the meltdown of the real estate market and subsequent destruction of the economy could possibly be contained. (more…)
Now, the IRS discovered that banks acting as servicers for “REMICs”, otherwise known as Real Estate Mortgage Investment Conduits, have been claiming tax-exempt status on the income they generate under favorable tax code provisions.
So what is a REMIC? A REMIC is a passive entity where mortgages are pooled and securitized into investments. Generally, the investors in REMICs are large funds, pension plans, and 401ks.
Not only did the banks failed to comply in any manner with the requirements of the Internal Revenue Code that allow this favorable tax treatment, they have apparently decided to ignore the IRC altogether.
So what does this mean for taxpayers?
It means that the banks have been systematically ignoring IRC provisions, thinking the IRS is too sheepish to enforce the law. These entities, as a result of the actions of the banks servicing the mortgages, have failed to pay billions of dollars in taxes, and robbed the government, and thus the American people, of that money.
The reason that REMICs were afforded this massive tax break is due to the fact that they are meant to be vehicles for passive investing, and as such they have rules for strict compliance that require that all mortgages passing into a REMIC must be transferred into a trust within 90 days of trust formation. (more…)
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.” (more…)
If you are a Florida homeowner facing foreclosure, you may not be thinking about the long-term economy. But Roy Oppenheim, a Florida foreclosure defense attorney, sees the big picture and how it relates to the foreclosure crisis.
Oppenheim offered Florida homeowners his insights on the economy in a recent interview on the talk show “Mind of Money” with Asset Protection Attorney Douglass Lodmell.
As Oppenheim sees it, Florida homeowners—whether they are in a foreclosure crisis or not—have to recognize that the current state of the economy is the new norm. There isn’t going to a rapid change in today’s economy.
“We need to look at what happened in Japan with the lost decade. This could be a lost generation,” Oppenheim says. “I’m not trying to scare people, but you need to understand that the Federal Reserve throwing $600 billion into the economy to prevent it from deflating further suggests that there are real serious problems with this economy.”
What is the way out? Oppenheim offered three possible paths Florida homeowners should be aware of as they make decisions about foreclosure defense strategies. The U.S. could opt for any of these three strategies:
1. The Third World Approach: Inflating the U.S. dollar so that Florida homeowners have more money, debt is worth less and easier to pay off, but real estate is worth more. Oppenheim says this is the current direction the government is taking.
2. Open the Borders: Allowing immigrants who can invest $250,000 or more into the economy to settle here. If upper middle class people from around the world come to America, it will create a demand for products and services. (more…)
