Thursday, September 27, 2012

Sheila Bair On Barack Obama - Business Insider

Sheila Bair On Barack Obama - Business Insider

 Bair's scathing opinion of these Obama appointees begs one obvious question: What does she think about their boss? She doesn't talk about him a lot, but here's what she has to say about a discussion she had with him about foreclosures on Air Force One:
We must have talked for a good twenty to thirty minutes. He wanted to hear about our work on loan modifications and on my prognosis on the health of the banking system and the overall economy. We talked about credit availability and small business. He was certainly focused on all of the right issues, and I was impressed with his sincerity, the depth of knowledge reflected in his questions, and his obvious desire to learn about what was going on in the banking sector and housing market from the front line vantage point of the FDIC. It was such a contrast from the conversations with his senior economic team where the attitude was that they already had all the answers and were talking to us only because the president wanted them to.
It's quite a contrast, and this is coming from a lifelong Republican and holdover from the Bush administration who voted for John McCain in 2008.
Bair goes on to say that of all the people in the president's administration, HUD Secretary Shaun Donovan was most interested in saving homeowners.
But worse than contrasting with Obama, Bair says that Summers and Geithner worked with Republicans against the president to ensure that banks didn't have to pay for bailout funds.
The disconnect is striking.

Tuesday, September 25, 2012

Attorney General Kamala D. Harris Announces National Administrator to Begin Foreclosure Refund Process | State of California - Department of Justice - Kamala D. Harris Attorney General

Attorney General Kamala D. Harris Announces National Administrator to Begin Foreclosure Refund Process | State of California - Department of Justice - Kamala D. Harris Attorney General

Federal Home Loan Banks are Major Players in Private Mortgage Backed Securities

Private-label MBS Collateral Statistics. 

The Federal Home Loan Banks generally purchase private-label Mortgage Backed Securities
rated triple-A (or its equivalent) by an NRSRO, such as Moody’s or S&P, at the time of purchase based on structural credit enhancements designed to withstand a significant increase in defaults combined with a sharp downturn in housing prices. Each Federal Home Loan Bank typically requires, at the time of purchase, credit enhancement that it believes to be above the amounts required for a triple-A credit rating by an NRSRO for non-agency mortgage-backed securities. 

Structural credit  enhancements include subordination and over-collateralization that are designed to absorb losses before an Federal Home Loan Bank will incur a loss on a security. Credit enhancement achieved through senior-subordinated features results in the subordination  of payments to junior classes to ensure cash flows are received by senior classes held by investors such as the Federal Home Loan Banks. In addition, monoline financial guarantors provide credit protection on some of the Federal Home Loan Banks’ securities in a form of secondary guarantees based on certain performance triggers.
See the“Monoline Insurance/Third-party Guarantors Credit Ratings and Outlook Table” for ratings and outlook status as of March 30, 2010. New loan modifications could affect the valuations and
credit enhancements of the FHLBanks’ mortgage-backed securities.

Friday, September 7, 2012

Washington Mutual Decides to Exit Wholesale April 2008

Washington Mutual Decides to Exit Wholesale

Here's the official announcement to brokers:
"Today, WaMu announced significant changes affecting our Home Loans business. As part of this announcement, and consistent with the company's retail focused strategy, WaMu has made the very difficult decision to exit the Wholesale lending business. In order to have an orderly shut down, we have determined the following critical dates:

April 10, 2008: Last date to submit new applications or locks.

May 31, 2008: All WaMu Wholesale Sales Centers will be closed by this date.

June 13, 2008: Generally, all loans must be closed/funded by this date. We will, however, honor outstanding loan commitments with expiration dates after June 13, 2008 up until the expiration dates set forth in those commitments.

June 30, 2008: All WaMu Wholesale loan fulfillment centers (LFCs) [San Diego, CA; Pleasanton, CA; Downers Grove, IL; and Jacksonville, FL] will be closed by this date.

Current Pipeline:
.. Locked loans with an expiration date prior to June 13, 2008 may be extended per current policy provided the loan is closed/funded by June 13, 2008.
.. Effective April 8, 2008, a condition will be added to each new commitment which will supersede the normal expiration provision.
.. Floating loans must generally be locked, closed/funded by June 13, 2008. Again, they may only close and funded after June 13, 2008 if a loan commitment has already been issued and the commitment expires after June 13, 2008.
.. If a loan is locked with an expiration date past June 13, 2008, it will not be honored unless a loan commitment has been issued and the commitment expires after June 13, 2008.
.. We are unable to make any exceptions regarding the closed/funded date of June 13, 2008. Again, however, we will honor outstanding commitments with commitment expiration dates beyond June 13, 2008.

WaMu will continue to originate loans through Consumer Direct and our Retail Lending channel.
Your Account Manager or Sales Manager will be available to support you while we transition out of this business.

This is a very hard day for WaMu and all of Wholesale Lending. We have appreciated your partnership and support over these many years and wish you the best as we move on to new opportunities."

Levin Goes After JPMorgan Chase with Subcommittee Investigation | FDL News Desk

Levin Goes After JPMorgan Chase with Subcommittee Investigation | FDL News Desk

Carl Levin is at it again. His Senate Subcommittee on Permanent Investigations, perhaps the best investigatory panel in Congress, particularly on financial matters, has honed in on JPMorgan Chase and the Fail Whale trades.
JPMorgan Chase & Co.’s wrong-way bets on derivatives are the focus of an escalating investigation by a U.S. Senate panel led by Carl Levin that has grilled executives from banks including Goldman Sachs Group Inc. and HSBC Holdings Plc, three people briefed on the inquiry said.

Levin’s Permanent Subcommittee on Investigations is seeking testimony from those who worked in or helped lead JPMorgan’s chief investment office, according to the people, who asked not to be identified because the inquiry isn’t public. The unit’s London staff lost at least $5.8 billion this year on the botched wagers, which were large enough to shift markets.