• Follow Essays, Opinions, Curated News and Analysis for the Public Health, Economics, Finance, I.T, Marketing, Business & Policy Management Eco-System on WordPress.com
  • Member Statistics

    • 695,663 Colleagues-to-Date [Sponsored by a generous R&D grant from iMBA, Inc.]
  • Our ME-P Channels

  • ME-P Archives Silo [2006 – 2017]

  • CERTIFIED MEDICAL PLANNER® program

    New "Self-Directed" Study Option SinceJanuary 1st, 2017
  • Dr. David Marcinko [Publisher Emeritus]

    untitled

    As a Distinguished University Professor and Endowed Department Chairman, Dr. David Edward Marcinko MBBS DPM MBA MEd BSc CMP® was a NYSE broker and investment banker for a decade who was respected for his unique perspectives, balanced contrarian thinking and measured judgment to influence key decision makers in strategic education, health economics, finance, investing and public policy management.

    Marcinko  is originally from Loyola University MD, Temple University in Philadelphia and the Milton S. Hershey Medical Center in PA; Oglethorpe University and Atlanta Hospital & Medical Center in GA; and Aachen City University Hospital, Koln-Germany. He is one of the most innovative global thought leaders in health care entrepreneurship today.

    Dr. Marcinko was a board certified physician, surgical fellow, hospital medical staff Vice President, public and population health advocate, and Chief Executive & Education Officer with more than 425 published papers; 5,150 op-ed pieces and over 135+ domestic / international presentations to his credit; including the top ten [10] biggest pharmaceutical companies and financial services firms in the nation. He is also a best-selling Amazon author with 30 published text books in four languages [National Institute of Health, Library of Congress and Library of Medicine].

    Dr. Marcinko is past Editor-in-Chief of the prestigious “Journal of Health Care Finance”, and a former Certified Financial Planner® who was named “Health Economist of the Year” in 2010, by PM magazine. He is a Federal and State court approved expert witness featured in hundreds of peer reviewed medical, business, economics and trade publications [AMA, ADA, APMA, AAOS, Physicians Practice, Investment Advisor, Physician’s Money Digest and MD News] etc.

    As a licensed insurance agent, RIA – SEC registered representative, Marcinko was Founding Dean of the fiduciary focused CERTIFIED MEDICAL PLANNER® online chartered designation education program; as well as Chief Editor of the HEALTH DICTIONARY SERIES® Wiki Project.

    Dr. Marcinko’s professional memberships included: ASHE, AHIMA, ACHE, ACME, ACPE, MGMA, FMMA and HIMSS. He was a MSFT Beta tester, Google Scholar, “H” Index favorite and one of LinkedIn’s “Top Cited Voices”. Presently, Marcinko is “ex-officio” and R&D Scholar-on-Sabbatical for iMBA, Inc.

    entrepreneur

    Frontal_lobe_animation

  • PodiatryPrep.org


    BOARD CERTIFICATION EXAM STUDY GUIDES
    Lower Extremity Trauma
    [Click on Image to Enlarge]

  • Most Recent ME-Ps

  • ME-P Free Adverting Sales Consultation

    The “Medical Executive-Post” is about connecting doctors, health care executives and modern consulting advisors. It’s about free-enterprise, business, practice, policy, personal financial planning and wealth building capitalism. We have an attitude that’s independent, outspoken, intelligent and so Next-Gen; often edgy, usually controversial. And, our consultants “got fly”, just like U. Read it! Write it! Post it! “Medical Executive-Post”. Call or email us for your FREE advertising and sales consultation TODAY [770.448.0769]

    Product Details

    Product Details

  • Medical & Surgical e-Consent Forms

    ePodiatryConsentForms.com
  • Hope Hetico RN MS [Managing Editor]

    Prof. Hetico

     

     

     

     

    ME-P SYNDICATIONS:
    WSJ.com,
    CNN.com,
    Forbes.com,
    WashingtonPost.com,
    BusinessWeek.com,
    USNews.com, Reuters.com,
    TimeWarnerCable.com,
    e-How.com,
    News Alloy.com,
    and Congress.org

    Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners(TM)

    Product Details

    Product Details

    Product Details

  • iMBA White Papers

    2017 Customized Industry Topics [$1,500 unlimited corporate license]March 5th, 2017
    Medical Clinic Valuations * Endowment Fund Management * Health Capital Formation * Investment Policy Statement Analysis * Provider Contracting & Negotiations * Marketplace Competition * Revenue Cycle Enhancements; and more! HEALTHCARE FINANCIAL INDUSTRIAL COMPLEX
  • Ann Miller RN MHA [Executive-Director]

    iMBA VIRTUAL OFFICES [1.770.448.0769] Atlanta, GA.
    Location doesn't matter. We welcome new long-distance clients and colleagues.

  • ME-P Publishing

  • SEEKING INDUSTRY PARTNERS?

    If you want the opportunity to work with leading health care industry insiders, innovators and watchers, the “ME-P” may be right for you? We are unbiased and operate at the nexus of theoretical and applied R&D. Collaborate with us and you’ll put your brand in front of a smart & tightly focused demographic; one at the forefront of our emerging healthcare free marketplace of informed and professional “movers and shakers.” Our Ad Rate Card is available upon request [770-448-0769].

  • Reader Comments, Quips, Opinions, News & Updates

  • Start-Up Advice for Businesses, DRs and Entrepreneurs

    ImageProxy “Providing Management, Financial and Business Solutions for Modernity”
  • Up-Trending ME-Ps

  • Capitalism and Free Enterprise Advocacy

    Whether you’re a mature CXO, physician or start-up entrepreneur in need of management, financial, HR or business planning information on free markets and competition, the "Medical Executive-Post” is the online place to meet for Capitalism 2.0 collaboration. Support our online development, and advance our onground research initiatives in free market economics, as we seek to showcase the brightest Next-Gen minds. ******************************************************************** THE ME-P DISCLAIMER: Posts, comments and all opinions do not necessarily represent iMBA, Inc.
  • OIG Fraud Warnings

    Beware of health insurance marketplace scams ================================================ OIG's Most Wanted Fugitives at oig.hhs.gov

Mortgage Investors Join Outcry Against Banks

Join Our Mailing List

Coordinated Strategies Emerging

[By Karen Weise ProPublica: Oct. 18, 2010, 1:18 p.m.]

Homeowners, and at times the government, have long complained that banks and other companies that service mortgages aren’t good at their job of collecting monthly payments, modifying loans and processing foreclosures. Now, a new cast of characters are piling on the criticism: the servicer’s own clients, the investors that actually own the mortgages.

The Servicers

Servicers handle the day-to-day of working with homeowners on behalf of the investors, who bought bundled mortgages from Wall Street. But investors are now threatening servicers with legal action. Just like homeowners, investors are frustrated by the poor job in modifying loans that servicers have been doing. They also say servicers are looking out for themselves, not investors’ interests as their contracts typically require.

For example, Investor Bill Frey, who runs the securities firm Greenwich Financial Services, says servicers view investors as “a Thanksgiving turkey to be carved up and shared among them-selves.” Investors can range from foreign governments and hedge funds to college endowments and pension funds. During the housing bubble, they gobbled up AAA-rated bonds created by pools of mortgages. Now that defaults and foreclosure are mounting, investors argue that flaws in how loans are serviced are costing them billions of dollars.

They say servicers have often dragged out foreclosures to rack up fees and refused to reduce second mortgages to make modifications sustainable. Investors often prefer modifications to foreclosures. But for modifications that won’t ultimately prevent a homeowner from defaulting, investors still prefer quick foreclosures so they can recoup their money and move on.

Of Terminal In-Decision

“Terminal indecision is not good,” says Frey. “If it can be fixed, fix it. If it can’t, nix it.”

Servicers have been slow [1] to modify mortgages—something we’ve written [1] about many times [2] — and when they do modify loans, homeowners are still saddled with other debt from second mortgages and home equity lines. Even after modifications under the government’s program, homeowners typically still must spend almost two-thirds of their income to pay off their mortgage and other loans, like credit cards or second mortgages.

Emerging Paperwork Scandal

The current mortgage paperwork scandal [3] adds more fuel [4] to the fire as major servicers have halted foreclosures because of potential paperwork irregularities around the country. Concerns are also growing that banks may not have properly transferred loans into the mortgage pools in the first place. “This deficient approach undermines the integrity and the operational framework of the housing finance and mortgage system as it exists today,” the Association of Mortgage Investors wrote [5] in a press release.

(For more on the growing scandal, check out our recent explanation of the main players involved.)

The Mortgage Bankers Association, which represents most major servicers, did not respond to ProPublica’s request for comment.

Legal Strategies

Investors from across the country have been coordinating legal strategies for over a year ago, with the effort ramping up in early spring, according to Frey. Since then, more and more investors have formed a loose consortium, gaining momentum “like a snowball going downhill,” he says. In the last month alone, the group added other investors that own an additional $100 billion in mortgage bonds.

They have not filed any suits yet, Frey says, because the group is first trying to grow even more. Also, since each investor group has different, nonmortgage business with the banks, some investors have conflicting interests in how to proceed, he says. The consortium now represents investors that own more than $600 billion in mortgage securities, which is around a third of the entire mortgage securitization market. The group includes 65 major mortgage investors; Bloomberg reported that large investment companies including Black Rock, PIMCO and Fortress are part of the effort, as are the quasi-governmental Fannie Mae and the Federal Home Loan Banks, which both own private securitized loans.

Coordinating investors is no easy task, since the mortgage bonds were sliced and diced to be sold off to investors around the world. To assert legal rights, investors must coordinate to prove that they collectively represent a certain percentage of each mortgage pool, or in some cases, a certain percentage of each slice of each mortgage pool. (The Wall Street Journal [6] and Bloomberg [7] both describe how Texas-based attorney Talcott Franklin is coordinating a clearinghouse to keep track of the various investments.)

Once investors have standing in each pool, they have the legal right to pressure servicers and trustees to improve or face litigation. The group says they have the legal authority to act in over 2,300 deals.

Investors say servicers must reduce or cancel second mortgages entirely before adjusting the primary loan, since that follows the legal pecking order of how loans should be paid off. But investors say servicers have are dragging their feet in reducing second mortgages to protect their own books, since the largest servicers — Bank of America, Citigroup, JPMorgan Chase and Wells Fargo — also own almost 60 percent of the $1 trillion second lien market.

Bank

Congressional Oversight Panel

A Congressional Oversight Panel concluded in April that there is “tension” between Treasury’s goal of supporting reductions to second mortgages and Treasury’s interest in ensuring that writing down second liens doesn’t severely weaken banks’ balance sheets. The panel wrote than when a servicer owns the second lien, the “inexorable conflict of interest” will more likely lead to modifications on the first loan, “as it benefits the bank at the expense of the mortgage-backed security investors.”

We’ve previously reported [8] that mortgages servicers frequently tell homeowners that investors are the roadblock to loan modifications, even though few mortgage deals actually restrict modifications.

Servicers are also supposed to act like watchdogs and report back to investors when they identify loans they suspect didn’t meet the lending standards promised when the bonds were initially sold to investors. If the banks did misrepresent the quality of the loans initially, the banks would have to buy back the invalid mortgages from the investors. But in many cases, the servicers are subsidiaries of the banks that sold the bonds, which investors say helps explain why servicers have been dragging their feet. Bloomberg noted [7] an analyst’s report that said mortgage repurchases could total over $179 billion.

Original Link: http://www.propublica.org/article/investors-join-outcry-against-mortgage-servicers

Assessment

According to an investor letter cited [6] in the Wall Street Journal, in some mortgage pools that have high default rates, the banks have not repurchased any loans when the servicers are subsidiaries of the banks that sold the bonds. Investors say this is all no small matter. Since the country’s mortgage market is heavily dependent on government support right now, they insist servicers make good on their contracts before start buying loans and supporting the mortgage market again.

Related Articles:

  1. http://www.propublica.org/article/mod-program-falling-short-of-govts-vague-goals
  2. http://www.propublica.org/article/loan-mod-profiles-runaround
  3. http://www.propublica.org/blog/item/biggest-banks-ensnared-as-foreclosure-paperwork-problem-broadens
  4. http://www.businessweek.com/news/2010-10-13/document-flaws-may-lead-investors-to-fight-mbs-deals.html
  5. http://www.propublica.org/documents/item/association-of-mortgage-investors-press-release-oct.-1-2010
  6. http://online.wsj.com/article/SB10001424052748704814204575508143329644732.html
  7. http://www.bloomberg.com/news/2010-09-23/mortgage-investors-target-banks-using-texas-lawyer-s-novel-clearing-house.html
  8. http://www.propublica.org/article/when-denying-loan-mods-loan-servicers-often-blame-investors-wrongly

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Product Details  Product Details

Advertisements

23 Responses

  1. More on the BoA Scandal

    CNBC reported this afternoon that the New York Federal Reserve Bank and a consortium of investment firms are suing Bank of America to force the bank to buy back mortgages contained in some $47 billion in mortgage bonds originally packaged by Countrywide Financial, which merged with Bank of America.

    http://www.msnbc.msn.com/id/39740300/ns/business-real_estate

    Fred

    Like

  2. The federal government – warned years ago of potential problems with banks’ foreclosure operations – failed to act, according to The Washington Post.

    http://www.propublica.org/blog/item/federal-regulators-failed-to-act-on-foreclosure-fears-despite-warnings-from

    Now, they’re leaving it to the states fix the mess.

    Fred

    Like

  3. Wells Fargo – Say it Ain’t So

    Ted, here is a review of the internal bank memos and e-mails that show how Wells Fargo reportedly tried to maximize overdraft fees.

    http://www.propublica.org/blog/item/read-documents-reveal-one-banks-plan-to-squeeze-customers-for-more-overdraf

    Any thoughts from our FA readers?

    Sarah

    Like

  4. Fannie and Freddie’s Regulator Opposes Reducing Mortgages for Struggling Homeowners

    http://www.propublica.org/article/fannie-and-freddies-govt-regulator-opposes-reducing-mortgages-for-strugglin

    The regulator for the government-controlled mortgage giants won’t let them trim loans for homeowners who owe more than their home is worth …. It figures!

    Shane

    Like

  5. More on Mortgages

    Candidate Obama pledged to support real change in bankruptcy laws to help foundering homeowners. But when it came time to fight for the measure, he didn’t show up.

    http://www.propublica.org/article/dems-obama-broke-pledge-to-force-banks-to-help-homeowners

    Some Democrats now say his administration actually undermined it behind the scenes.

    Leon

    Like

  6. Now it’s Citigroup to Settle With Homeowners

    Bankruptcy disputes over Citigroup’s faulty mortgage documents have yielded settlements for some homeowners across the country.

    http://www.propublica.org/blog/item/disputes-over-citigroups-faulty-mortgage-documents-yield-settlements-princi

    Leon

    Like

  7. More on Bank Errors

    Banks continue to blindside homeowners by foreclosing when the homeowners are still awaiting word on their application for a mortgage modification.

    http://www.propublica.org/article/bank-errors-continue-to-cause-wrongful-foreclosures

    James

    Like

  8. Wells Fargo Picks to Pay

    The bank agrees to pay $590 million to settle claims alleging that Wachovia, acquired by Wells Fargo in 2008, misrepresented its financial health and the quality of its bonds.

    http://www.propublica.org/article/wells-fargo-picks-to-pay

    Fred

    Like

  9. Why are people so worried about big banks failing?

    Can someone tell me why anyone except the big banks should worry if they fail?

    1. If you have money, then it is insured by FDIC insurance.
    2. If your broke, they won’t be bothering you about unpaid mortgage.
    3. If your broke, won’t be bothering you about unpaid credit cards.
    4. If your broke, won’t be bothering you about unpaid auto loans.
    5. The banks will be gone and small banks (who do lend) will take over.
    6. The banks won’t be borrowing your tax money.

    Milton

    Like

  10. First Mortgages … Now Debit Card Fees

    News came that Bank of America is going to charge $5 per month for using the debit card for retail purchases.

    Earlier some other banks rolled out similar service fees in select geographical areas. The reaction from the general public is a huge outcry.

    President Obama denounced it in an interview on ABC.

    Crawford

    Like

  11. Trust Bust – Why No One Believes the Banks

    In this essay, Jesse Eisinger looks at the global financial system and sees why banks don’t have faith in other banks, investors are deeply scarred and wary, and why nobody believes that the governments around the world could grapple with the magnitude of the problems, even if they wanted to.

    http://www.propublica.org/thetrade/item/trust-bust-why-no-one-believes-the-banks

    Marvin

    Like

  12. Are Fannie Mae and Freddie Mac Hesitating to Help Homeowners?

    ProPublica explains Freddie Mac and Fannie Mae’s role in the housing market, and why it seems like their actions often go against the interests of homeowners.

    http://www.propublica.org/article/how-and-why-fannie-and-freddie-are-hesitating-to-help-homeowners

    Sarah

    Like

  13. Older Doctors

    The housing crash has made things worse. A few years ago, physician homeowners in their 60s with big mortgages could sell their homes for a profit and buy smaller places or rent. But, the drop in housing values means that many homeowners have little equity, and some now owe more than their houses are worth. Medical practices are being de-valued too.

    Clif

    Like

  14. Are more mortgage settlements coming?

    According to this report, the news of a big settlement between the nation’s top five mortgage originators and servicers was painted as a huge milestone in the effort to put the mortgage meltdown and subsequent foreclosure fiasco in the past.

    http://www.msnbc.msn.com/id/46920384/ns/business-us_business/#.T3mZFzFEiRM

    But, is it?

    Edward

    Like

  15. Opinion on Ken Lewis [BoA]

    Is there a worse poster-boy for the industry than Ken Lewis, the former chief executive officer of Bank of America?

    His once-stellar career as a bank executive ran aground thanks to his disastrous decision to buy Countrywide in 2008, a decision for which the bank’s shareholders and executives are still trying to make amends for.

    In fact, some pundits think Lewis’s deal ranks among the worst deals, if not the worst, in U.S. corporate history. What do you think?

    Naomi

    Like

  16. Feds Replace Flawed Foreclosure Review With Vague $8.5 Billion Settlement

    Banking regulators admitted the Independent Foreclosure Review was a big expensive mess and shut it down.

    http://www.propublica.org/article/feds-replace-flawed-foreclosure-review-with-vague-8.5-billion-settlement

    But, many details about the $8.5 billion settlement that replaces it remain murky.

    Clif

    Like

  17. BoA Sucks

    Bank of America Corp was just found liable for fraud on claims related to defective mortgages sold by its Countrywide unit, a major win for the U.S. government in one of the few big trials stemming from the financial crisis.

    http://money.msn.com/investing/news.aspx?feed=OBR&date=20131023&id=17029462

    This could not have happened to a bigger bunch of smelly cads.

    Littia

    Like

  18. Bank of America still plagued by Past

    The bank is stuck in a legal morass stemming from ill-advised acquisitions.

    http://money.msn.com/top-stocks/post–bank-of-america-still-plagued-by-its-past

    Will CEO Brian Moynihan ever establish a new legacy?

    Norman

    Like

  19. JPMorgan Chase to face U.S. class action in $10 billion MBS case

    A federal judge just said JPMorgan Chase & Co must face a class action lawsuit by investors who claimed the largest U.S. bank misled them about the safety of $10 billion of mortgage-backed securities it sold before the financial crisis.

    http://www.msn.com/en-us/money/companies/jpmorgan-to-face-us-class-action-in-dollar10-billion-mbs-case/ar-BB6FxJX

    Any thoughts?

    Major

    Like

  20. Congress Deal to Avoid Shutdown Includes Victory for Big Banks

    Dec. 10 (Bloomberg) — Congress will vote this week on a $1.1 trillion spending plan that would avert a U.S. government shutdown as Democrats agreed to roll back rules affecting banks, clean water and rest for truckers.

    http://www.msn.com/en-us/money/companies/congress-deal-to-avoid-shutdown-includes-victory-for-big-banks/ar-BBgywV2?ocid=iehp

    The deal was announced late yesterday after Democrats accepted Republican demands to undo some regulations including the banking provision, a big victory for Wall Street. It lets JPMorgan Chase & Co., Citigroup Inc. and other lenders keep swaps trading in units with federal backstops.

    A Banker

    Like

  21. Wells Fargo

    Wells Fargo admits to 70 percent more potentially fake accounts:

    http://www.msn.com/en-us/money/companies/wells-fargo-admits-to-70-percent-more-potentially-fake-accounts/ar-AAr2aSz?li=BBnbfcN

    Will they really GO FAR?

    Craig

    Like

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: