Saturday, July 27, 2013

Shaking The Banks, the Pope is even in on it!

Who's Next
This has been years in the making, banking reform.  FHFA sued UBS and 17 other banks in 2011, seeking to recover losses on a total of $200 billion in mortgage-backed securities sold to the two government-sponsored enterprises.  In November, U.S. District Judge Denise Cote, who is overseeing the UBS suit and most of the other FHFA suits, denied a request by Citigroup, Bank of America Corp. and two other banks to dismiss them. 

 UBS Americas will pay $885 million to settle ongoing litigation with the Federal Housing Finance Agency (which oversees Freddie Mac and Fannie Mae) over the bank's sale of toxic residential mortgage-backed securities to F&F.  The FHFA has alleged that the various banks violated federal and state securities laws when selling private-label RMBS to the housing agencies. Under the terms of the settlement, UBS will pay approximately $415 million to Fannie and $470 to Freddie to resolve certain claims.

Some of these names, as the settlement agreement covers claims between FHA and UBS in the following cases: FHFA v. UBS Americas, Inc.; FHFA v. Ally Financial Inc.; FHFA v. Countrywide Financial Corp.; and FHFA v. First Horizon National Corp. Of the 18 suits filed in 2011, FHFA has now settled three cases and remains committed.  The banks are shaking as to who is next.

Fannie Mae and Freddie Mac, a bipartisan group of senators calling for their dissolution within five years.

Taxpayer Protection Act of 2013:

To provide secondary mortgage market reform and for other purposes. The bill would transfer some of Fannie and Freddie's functions to a "modernized and streamlined" agency. To keep taxpayers from absorbing losses in the secondary mortgage market during periods of economic stress, the bill requires private market participants to hold 10 percent of the first loss of any mortgage-backed security that purchases a government reinsurance wrap.

Overview: House Bill

Summary: H.R.1101 — 113th Congress (2013-2014)
Introduced in House (03/12/2013)

Homeowners and Taxpayers Protection Act of 2013 - Directs the Secretary of the Treasury to establish the National Commission on Natural Catastrophe Preparation and Protection to advise the Secretary regarding the estimated loss costs associated with reinsurance protection contracts.

Requires the Secretary to implement a program that utilizes premiums from eligible state or multi-state plans to pre-fund future natural catastrophe recovery by making available for purchase, only by such plans, contracts for reinsurance coverage.

Requires such contracts to cover insured property losses covered under primary insurance contracts to homeowners, mobile homeowners, renters, and condominium owners for specified natural catastrophic events.

Prescribes requirements for the operation of state plans and the terms of reinsurance contracts.

Encourages states to create and maintain catastrophe funds for themselves or with other states.

Sets forth requirements for the treatment of insured losses and maximum federal liability.

Establishes in the Treasury the Catastrophe Preparedness Fund, consisting of contract sales receipts and any amounts borrowed or earned, which shall be used to pay Commission administrative costs and loss payments under reinsurance contracts. Prohibits the authorization or appropriation of federal funds for the Fund or for implementing the reinsurance liquidity protection program.

Establishes a post-catastrophe market stabilization program for liquidity loans to: (1) expedite payment of claims under state catastrophe insurance programs, (2) authorize the Secretary to issue loans to assist financial recovery from significant natural catastrophes, and (3) promote the availability of private capital to state catastrophe insurance programs in order to provide liquidity and capacity.

Establishes the National Readiness, Preparedness and Mitigation Committee to administer a Readiness, Preparedness, and Mitigation Grant Program of grants to state and local governments, nonprofit organizations, and other appropriate public and private entities to develop programs and initiatives to improve catastrophe response, citizen preparedness and protection, and prevention and mitigation of losses from natural catastrophes.

Banks bail on mortgages and MSR: (mortgage servicing rights)

Banks Bail
Wells Fargo announced that it is eliminating its entire remaining joint venture mortgage banking affiliates.  Bank of America is now in the midst of one of the biggest transfers of MSRs in history, selling servicing rights for about $215 billion of loans to Nationstar Mortgage Holdings Inc.  There is some history here: about half the loans involved are owned or guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.  Bank of America agreed to a $10-billion-or-so settlement (some of the public received $3000 to keep quiet, many haven't even cashed the check) with Fannie over who was responsible for the problems with the massive defaults on loans from the mortgage boom era.

The Pope:

There is a Pope!  Francis himself is imposing a shake-up in the Vatican's staid and dysfunctional bureaucracy, setting in motion a reform plan and investigations into misdeeds at the scandal-plagued Vatican bank and other administrative offices.  It was a slightly more diplomatic expression of the direct, off-the-cuff exhortation he delivered to young Argentine pilgrims on Thursday.  In those remarks, he urged the youngsters to make a "mess" in their dioceses and shake things up, even at the expense of confrontation with their bishops and priests.

Another Tricky Day:

Well, Pod a lot of shaking going on, the whole world is fed up with this crap.  What's happening now is that the Banksters and Jack Wagons are getting their punk ass pockets picked.


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