Free Republic

Subprime Scandal: Turns out the true cost of bailing out Fannie Mae and Freddie Mac is double what the White House claims. Yet reforming the failed mortgage giants remains in limbo. In a new report delivered to the House Budget Committee, the Congressional Budget Office puts the bailout figure at $317 billion — not the $130 billion claimed by the Obama administration, which has vowed to "reform" Fannie and Freddie. And CBO says costs to taxpayers will continue to rise as the housing market weakens. Why low-ball the bleeding from these quasi-governmental agencies? Because the White House doesn't really want...

In an almost verbatim repeat of Carl Icahn's words of caution which we noted yesterday, Templeton's legendary chairman Mark Mobius said that "another financial crisis is inevitable because the causes of the previous one haven’t been resolved" ... at the Foreign Correspondents’ Club of Japan in Tokyo... "There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings...nothing in the structure of capital markets has changed,...

I’ve written several articles skewering HBO for producing political projects destined to air immediately prior to the 2012 election, where the vast majority of the cast and crew are passionate Barack Obama supporters, and where the content is aimed at the Democrat’s two favorite Republican villains… Sarah Palin and Dick Cheney. So, when I sat down to watch HBO’s Too Big to Fail, I prepared myself for the worst. What I didn’t expect was the big surprise awaiting me. Too Big to Fail, which premieres on HBO on May 23, 2011, features a star studded cast recounting the events that...

By taking advantage of  “must-pass” pieces of legislation, Republicans have three chances this year to restrain the burden of government.  They didn’t do very well with the ‘CR fight” over appropriated spending for the rest of FY2011, which was their first opportunity. I was hoping for an extra-base hit off the fence, but the GOP was afraid of a government shutdown and negotiated from a position of weakness. As such, the best interpretation is that they eked out an infield single.The next chance to impose fiscal discipline will be the debt limit. Currently, the federal government “only” has the...

Democratic Sen. John Kerry (Mass.) will introduce bipartisan legislation later this week to create a federal infrastructure bank to fund major projects around the nation, an aide told The Hill. Kerry has at least one Republican senator backing the initiative — the American Infrastructure Financing Authority — that will initially cost about $10 billion and provide loans and loan guarantees for large, much-needed infrastructure projects.

The Cato Institute’s Arnold Kling wrote an excellent piece for NR about a year ago on why we need to break up the big banks — a position that, at the time, many would have considered fringe at best. However, in a recent white paper, Thomas M. Hoenig, president of the Federal Reserve Bank of Kansas City, says much the same thing:(PDF) Today, I am convinced that the existence of too big to fail financial institutions poses the greatest risk to the U.S. economy. The incentives for risk-taking have not changed post-crisis and the regulatory factors that helped create the...

Earlier today, the White House released a budget proposal that included trimming the mortgage interest deduction for taxpayers in the top income tax brackets. This is the first step in eliminating what many economists view as an expensive and inefficient housing subsidy. Unfortunately, many of the critics of the mortgage interest deduction focus on its immediate costs. If it were eliminated, it might bring in more than $2 trillion of new revenue for the government or—as I proposed this morning—allow up to $2 trillion of new tax cuts for the American people. Actually, I think getting rid of the housing...

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance.

Remember, the allegations made by various legal folks in the practice (and apparently validated by the case law thus far) is that not one note has been able to be produced that contains all of the required conveyances and endorsements. What's going to happen when (or if) these folks gain access to the files and find that they're missing - that is, that the custodian doesn't have them? Well now that would be interesting, no? "Mortgage-backed securities" that in fact have no mortgages in them? Why that would be a wee problem, no?

Frightening FalloutIn order to easily buy and sell mortgages between themselves so that these loans might be repackaged, securitized and then sold to investors as mortgage-backed securities, banks and other lenders needed a quick way to "trade" individual mortgages. They created a company called Mortgage Electronic Registration Systems (MERS). This group includes Bank of America Corp. (NYSE: BAC), GMAC LLC (NYSE: GMA), Wells Fargo & Co. (NYSE: WFC), Washington Mutual (now owned by JPMorgan Chase), the United Guaranty Corp. unit of American International Group Inc. (NYSE: AIG), Fannie Mae (OTC: FNMA), Freddie Mac (OTC: FMCC), mortgage-servicing companies and other similarly...

"The latest ugly news for Bank of America is actually coming from Europe, where big institutional money managers and other mortgage securities buyers are now beginning to organize for an assault."

Bank of America Corp. and its Countrywide Home Loans unit were accused of racketeering in a lawsuit filed by two Indiana residents claiming that perjured affidavits were used to foreclose on their home. Dwayne Ransom Davis and Melisa Davis filed the complaint Tuesday in federal court in Indianapolis. Their lawyer, Irwin Levin, confirmed the filing in a phone interview, but it couldn’t be independently verified. “The defendants and their cohorts engaged in a pattern of racketeering activity in which they routinely and repeatedly prepared perjured affidavits in order to rapidly churn foreclosures,” the couple said in the complaint.

Update: CNBC confirms that the New York Fed is part of a consortium that have launched a lawsuit against BofA regarding Countrywide mortgages. Shares are now off 3%. Original post: Interesting! Shares of Bank of America (BAC) are getting crushed on headlines that the New York Fed and PIMCO are about to jump on the Bank of America mortgage putback bandwagon. It's particularly surprising to see the NYFED jump in on the action, since that means they'd be actively working to weaken Bank of America. PIMCO is private, so their only interest is making more money. It makes sense. All...

4 In Your Corner continues to investigate the Rocket Docket. That's the speedy-foreclosure process in Southwest Florida's 20th Judicial Circuit. We have the story of one Charlotte County man who's trying to stop it. As a notary public with over 20-years experience, Ron Gillis scrutinized his mortgage documents preparing for his foreclosure hearing. And he claims to have found on paper what many of you have complained to 4 In Your Corner about, mortgage fraud and falsified documents; and in the courtroom, violation of due process and rogue judges. That's why he's filing complaints against foreclosure judges Leeann Schreiber and...

Bank of America alleged in a court filing this June: It appears as though many loans and other mortgage-related assets have been double and even triple-pledged to various constituencies As I have repeatedly pointed out, the failure of the mortgage originators and banks to prepare and record proper documentation has led to an epidemic of fraud. The pledging of the same mortgage again and again to different trusts related to mortgage backed securities is just one result. And as long-time foreclosure investigator Nye Lavalle writes: On thousands of occasions I stated to regulators, CEOS, banks, Fannie and Freddie that the...

WASHINGTON (Dow Jones)--The White House is committed to holding banks accountable for any legal violations tied to housing foreclosures, White House Press Secretary Robert Gibbs said Tuesday. Gibbs also reiterated that the administration "strongly" supports an investigation by 50 state attorneys general into allegations that bank employees signed foreclosure documents without carefully reviewing the contents. Gibbs' statement comes as several large financial institutions, including Bank of America Corp. (BAC) and GMAC Mortgage, a lender and loan servicer, said they were restarting foreclosures. Bank of America said the company hasn't found significant problems with its process for seizing homes. The bank...

Foreclosure attorney David Stern, who is being investigated for fabricating legal documents, purposefully hid files from inspectors with Fannie Mae and Freddie Mac, a former employee said in recently released deposition. Stern had a tight-knit relationship with the two mortgage giants, and referred to them as his “babies,” former employee Kelly Scott said. Scott also said office managers and key staff members got gifts, including new cars. Stern’s law firm is one of the largest foreclosure law firms in Florida, handling thousands of cases per month. Attorney General Bill McCollum is investigating the firm for allegedly creating phony documents. McCollum’s...

Plaintiff's Motion for Entry of Protective Order at 7. As grounds for it's motion, Plaintiff points to the embarrassment GMAC and it's employees suffered, and will continue to suffer, from the posting of excerpts from Stephan's deposition transcript on an Internet blog. The Court is not persuaded that the Plaintiff has shown the requisite "good cause" to justify entry of a protective order in this case.

NEW YORK (Dow Jones)--U.S. stocks closed modestly lower Thursday as investors retreated from financials because of concerns over banks' foreclosure practices. The Dow Jones Industrial Average fell 1.51 points, or 0.01%, to 11094.6, snapping a four-session winning streak in a day of choppy trading. Financials led the Dow's declines. Bank of America dropped 69 cents, or 5.2%, to 12.60 and J.P. Morgan Chase fell $1.12, or 2.8%, to $38.72. Both are among the wave of banks reviewing their foreclosures after temporarily suspending evictions due to concerns over "robo signers," who approve hundreds of foreclosure documents a day. Among other banks...

WASHINGTON -- Officials in 50 states and the District of Columbia have launched a joint investigation into allegations that mortgage c