President Obama on Friday tapped a state banking regulator who took a hard stand against questionable lending practices to run the agency that oversees Fannie Mae and Freddie Mac, the two mortgage finance giants that might be overhauled next year. As director of the Federal Housing Finance Agency, Joseph A. Smith Jr., the current North Carolina commissioner of banks, would wield great power in the nation's mortgage market.
The witness list for the first Congressional hearing focused on the foreclosure crisis, to be held on Nov. 16 before the Senate Banking Committee, is out. The list includes two company officials--Barbara Desoer, president of Bank of America Home Loans, and David Lowman, CEO of Chase Home Lending. Also testifying are Tom Miller, the attorney general of Iowa, who is leading the 50-state investigation into the issue; Adam J. Levitin, the Georgetown University law professor who briefed Citigroup analysts who wrote a research note last month about the problems with paperwork in securitized mortgages that shook up Wall Street; and Diane E. Thompson, an attorney with the National Consumer Law Center who wrote a report on why mortgage servicers foreclose when they should modify loans.
There's no doubt that the Federal Reserve's move to boost the economy last week was dramatic and carries risks. But much of the chatter around the move, including at gathering of top world leaders in South Korea, is making it out to be far more revolutionary and unconventional than it in fact is. In fact, while there is plenty of room to debate the wisdom of the Fed's action, is quite consistent with the long-standing and widely accepted principles of monetary policy, or at least as consistent as possible given that the Fed's short term interest rate target is already at zero.
At 8:30 a.m. -- The Labor Department releases data on weekly claims for unemployment benefits (this is a day early, owing to the Veterans Day holiday on Thursday). At 8:30 a.m. -- The Commerce Department releases data on international trade for September. At 8:30 a.m. --...
JPMorgan Chase is facing two potential class action lawsuits alleging fraud in foreclosures, the company said in a regulatory filing Tuesday. The lawsuits, which were filed against Washington Mutual Bank and JPMorgan Chase & Co in the United States District Court for the Northern District of Illinois, and against Chase Home Finance in California state court, allege "common law fraud and misrepresentation, as well as violations of state consumer fraud statutes," JPMorgan said. Bank of America it is facing lawsuits from investors who bought more than $375 billion mortgage-backed securities that allege that the offerings contained "material misrepresentations and omissions." Citigroup said the parties suing it for its underwriting process of residential mortgage-backed securities include investors Charles Schwab and the Federal Home Loan Banks of Chicago and Indianapolis. It said the lawsuits "are in their preliminary stages." Wells Fargo said multiple class actions have been filed against it and other banks "challenging aspects of the foreclosure process." The San Francisco-based bank said it "cannot estimate the possible loss or range of loss" from those legal actions.
PNC Financial Services said in a regulatory filing Tuesday that it is proceeding with new foreclosures with "enhanced procedures designed as part of this review to minimize the risk of errors." Bank of America also recently resume foreclosures in 23 states. Ally Financial, which was the first major lender to freeze foreclosures on Sept. 17, paused them only briefly and has been continuing with individual foreclosures after each file has been double checked and any issues corrected. The nation's sixth largest bank, PNC had said in early October that it would halt foreclosure sales for a month to examine its documentation process. The Pittsburgh-based company said that based on its review so far "we believe that PNC has systems designed to ensure that no foreclosure proceeds unless the loan is genuinely in default.