"Consumers likely to find increased bank costs; Federal insurers have big shortfalls" by Michael Kranish, Globe Staff | July 2, 2009
WASHINGTON - An array of government-created insurance agencies - which have long charged bargain-rate premiums to banks, credit unions, and brokerages - are seeking to make up for massive shortfalls in their insurance funds by raising fees and premiums, many of which are likely to be passed on to consumers.
Everything is passed on to the consumer. You are the septic tank of the nation, American people, now open up!
The billions of dollars in new fees are the result of decisions by Congress and the agencies to allow the insurance funds and premiums to be capped at levels that proved far too low, according to Jeffrey R. Brown, a finance professor at the University of Illinois at Urbana-Champaign who has studied the issue.
“This is what happens when you put the government in charge of an insurance program,’’ Brown said. “Politically, they don’t run them the way the need to be run.’’
And you want NATIONAL HEALTH CARE out of these clowns?
I no longer do; not any of the taxings, 'er, plans they are discussing.
Another specialist, American Enterprise Institute scholar Andrew G. Biggs, agreed.... Now, the increased premiums are likely to be passed along to consumers in the form of higher banking fees, lower interest rates for savings accounts, higher interest charges for loans, and increased brokerage fees for stock trades, according to officials at the agencies. Some institutions might also lay off workers or cut services.
So EVERYONE gets RICH except YOU, huh, American?
I mean, banks just reported billions in profits.
The sharp increases in fees are necessary largely because of Congress’s decisions over the years to heed lobbying by industry groups and maintain a system under which some of the insurance agencies charged little or nothing in premiums, according to a Globe survey.
The Federal Deposit Insurance Corp., which insures bank accounts for up to $250,000, charged no premiums to most banks for 10 years.
Related: FDIC Preparing For Massive Bank Failures
The National Credit Union Administration, which insures deposits up to $250,000 at more than 7,000 credit unions, also charged no premiums for 10 years, and even paid rebates in two of those years. The Securities Investor Protection Corp., which insures that brokers invest money as promised, charged brokerages only $150 per year for $500,000-per-account coverage.
The Pension Benefit
See: Bush Bankrupted Pension Insurance Fund
Related: Corporate Pension Funds Next in Line for Bailout Loot
In every agency, the financial crisis that began in 2008 exposed inadequate reserves.
The funding crisis at the National Credit Union Administration illustrates the extent of the underfunding. The agency insures accounts of nearly 90 million people at credit unions for up to $250,000. To pay for that insurance, credit unions were required to keep 1 percent of their insured deposits in a fund held by the federal agency. The agency also had congressional authority to assess a premium of up to 0.5 percent of their insured deposits. But the agency decided against charging those premiums during the last 10 years because it determined that the insurance fund met the level recommended by Congress, an agency spokesman said.
Indeed, the agency sent $51 million in rebates back to credit unions as recently as 2007 because it believed it had too much money in its insurance fund.
The simple fact is TAXES and FEES are TOO HIGH AS IT IS!
What is angering is the LOOTING that went on that taxpayers and consumers will now have to pay!
In recent months, however, the federal insurance fund for credit unions has been decimated. Nearly $6 billion out of the $8 billion has been spent to pay for losses or insure deposits at troubled institutions. As a result, the agency is now borrowing an additional $6 billion from the Treasury, and making up for the loss by charging every credit union a new fee that amounts to nearly 1 percent of insured deposits. After an outcry from credit unions, Congress last month agreed to spread out the new fee over a seven-year period.
(Blog author just shaking his head)
John McKechnie, a spokesman for the National Credit Union Administration, said that during the 10-year period when his agency charged no premiums, few complaints were heard. “When the sun was shining, nobody wanted to pay more,’’ he said. Asked how consumers will be affected by the new fee, he predicted the cost will be passed along in the form of slightly lower interest rates to depositors with savings accounts, among other measures.
Similarly, the Federal Deposit Insurance Corp., in the aftermath of the 2008-09 financial meltdown, the agency declared that the fund was near the breaking point and announced it would sharply raise premiums on all banks. The agency has said it may need to borrow up to $500 billion from the government to take over failed banks, up from the existing borrowing authority of $30 billion. Congress recently gave the agency the authority to raise fees to make up for the shortfall. But after complaints from the banking lobby, the agency cushioned the blow....
How this all helps YOU I don't know, American.
The Securities Investor Protection Corp., a private, nonprofit firm created by Congress that charged brokerages only $150 per year to insure each account for up to $500,000, now faces the possibility that its insurance fund might be depleted by the Bernard Madoff scandal alone.
See: The Russian-Israeli Mafia: Off-limits to FBI, US intelligence
Madoff, Mossad and the AmeriKan MSM
As a result, it recently raised its rate to 0.25 percent of each brokerage firm’s net operating revenues, meaning the annual charge at some brokerage could increase from a flat $150 to millions of dollars. Representative Barney Frank, the chairman of the House Financial Services Committee, which has oversight of the banking, credit union, and brokerage insurance agencies, defended the decision by Congress to allow the bank and credit union agencies to charge little or nothing in premiums for many years. He said that members of Congress were convinced that there was enough money in the insurance funds.
Please see: Barney Frank Benefited From State Debts
That glib looter and liar is not one of my favorite people.
Frank bristled when asked whether Congress is in the position of authorizing hikes in premiums now to make up for past mistakes. “What harm has come from the fact that we didn’t have the premiums then?’’ he asked. He said that Congress has found ways to spread out the impact of the new fees, minimizing the burdens on consumers.
The DEFENSIVE ANGER and DENIAL SPEAKS VOLUMES about who this turd is really looking out for.
Frank’s view was challenged by Biggs, the American Enterprise scholar, who previously served as a House aide and a deputy commissioner of the Social Security Administration. “I think ultimately it has to come to Congress,’’ Biggs said. “The goal is to get things right before you have a crisis. What you’d like is foresight from your representatives and their staff.’’
In Washington D.C?
Biggs said that Congress should undertake a broad review of the insurance agencies. He said two top priorities should be to set premiums that are closer to what would be charged by private insurers, and to insulate Congress from industry lobbyists pushing for the lowest-possible fees. The Pension Benefit Guaranty Corp. has not said how it will make up for a $33 billion deficit in its insurance fund. The agency, which insures the pensions of 44 million Americans, has failed in past efforts to get congressional approval to charge higher premiums on private pension plans that have the riskiest investments.
You will be bailing that out, too, America -- if you haven't already.
As a result, one study found that its premiums are one-sixth of what would be privately charged for the same insurance.... Action has been delayed because President Obama has not nominated a director, and the agency’s board, made up of three Cabinet secretaries, has not met for 16 months.
I don't want to hear their excuses. Banks got the money within hours.
Well, at least they are redoing those loans, right?
"Lenders avoid redoing loans, Fed concludes; Study cites lack of profit in aiding the distressed" by Jenifer B. McKim, Globe Staff | July 7, 2009
Mortgage lenders don’t try to rework most home loans held by borrowers facing foreclosure because it would probably mean losing money, a study released yesterday by the Federal Reserve Bank of Boston concludes.
The Boston Fed’s findings suggest the Obama administration’s major effort to solve the foreclosure crisis by giving the lending industry $75 billion to rewrite delinquent loans to more affordable levels is not likely to work.
One of the study’s coauthors, Boston Fed senior economist Paul S. Willen, said the government would be better off giving the money directly to struggling borrowers to help them with their payments, rather than to lenders that are averse to working out the troubled loans.
I've said that from the start. PAY OFF their MORTGAGES!
It would have cost a LOT LESS than $24 TRILLION!
"I’ve read that 9.3 Trillion Dollars would have payed off EVERY MORTGAGE IN THE UNITED STATES – but whaddaya know – that’s not what was done with the phony “bailout” money – it went, it seems, to the same crooks that caused this mess in the first place.
--MORE--"
“Loan modification is not profitable for lenders,’’ Willen said. “If it were profitable, they would go out and hire staff.’’
US Representative Barney Frank, head of the House Financial Services Committee, said the study results may provide answers about why so few struggling homeowners have been able to get help....
And what are you doing about it, liberal kings***?
The lenders may have compelling reasons not to find new borrowers to help, according to the study. For example, up to 45 percent of borrowers who did receive some kind of help on their loans ended up in arrears again, the study found. Conversely, about 30 percent of delinquent borrowers are able to fix their problems without help from their lenders.
Then WHY couldn't looting "lenders?"
“A lot of people you give assistance to would default either way or won’t default either way,’’ Willen said. “They are trying to maximize profits, and at this point maximizing profits does not mean modifying loans.’’
Officials from Hope Now, the private-sector alliance of mortgage servicers and investors, were unavailable for comment yesterday. US Treasury officials declined to comment on the Fed study, but noted in a statement that more than 240,000 homeowners have received loan modifications this year under the president’s program. Moreover, federal regulators said the pace of loan modifications has been increasing steadily since last year.
If these guys can just blow you off, what good are you, reporters?
And then they SWITCH the TOPIC and LIE to YOU?
Given the findings, Dean Baker, codirector of the Center for Economic and Policy Research in Washington, D.C., said Willen’s suggestion to give money to borrowers rather than lenders makes sense.
Which is why it WASN'T DONE!
“You have more money going to the banks and the servicers than you do to the homeowners,’’ he said. “It would make more sense to just give money to the borrowers.’’
The $75 billion Obama administration plan, announced in February, provides incentives to motivate companies that service mortgages to make loans more affordable, including $1,000 bonuses for each modified loan and an additional “pay for success’’ fee of $1,000 a year for three years if borrowers stay current on their new terms.
Haven't we given the looting banks enough money?
Willen said the success bonus could have the unintended effect of steering loan servicers away from those who need help the most, and toward only those borrowers most likely to recover on their own anyway.
That's why I want government doing nothing: unintended consequences.
First the wars, now this. Of course, they WERE INTENDED ALL ALONG!
He said that if modifications increase, it won’t be by much. “My guess is they are going to help people who are OK, and they are not going to help people who are deep trouble,’’ he said.
Yeah, THEY CAN DROWN but not the BANKS!
Alan White, a professor at Valparaiso University School of Law in Indiana, said lenders could cut down on the number of borrowers who end up defaulting again by giving them more help in the first place. He said too many modified loans don’t result in low enough payments. Also, he said, there may be fewer borrowers who can get out of trouble on their own because of continuing difficulties in the economy....
--more--"Maybe it is a good thing you didn't get the "help": The Help Homeowners Got
Ain't that a kick to the groan?
At least the WH is helping you out:
"White House, mortgage firms meet on loans; Lenders pledge to help borrowers get modifications" by Alan Zibel and Daniel Wagner, Associated Press | July 29, 2009
WASHINGTON - A new goal of about 500,000 loan modifications by Nov. 1 and stressed the program’s urgency.
If it is so urgent, then why the wait?
The sessions came amid concerns that the Obama administration will fall far short of its original goal of helping up to 3 million to 4 million troubled borrowers with modified loans.
That's becoming a theme for this administration.
As of this week, only about 200,000 borrowers were enrolled in three-month trial loan modifications, out of about 370,000 who were offered modifications by mortgage companies....
And Treasury said it was 240,000?
And HERE is SOMETHING you don't see much in the Globe:
Yesterday, an activist group in Minnesota filed a lawsuit seeking to stop home foreclosures in that state. Mark Ireland, an attorney with the Minnesota-based Foreclosure Law Relief Project, said the government has failed to establish the procedures needed to ensure the fair and uniform administration of the program. Loan servicers are not required to tell a homeowner why they were denied a loan modification.
“Decisions are made under a cloak of secrecy and there is no formal way to challenge these decisions,’’ Ireland said.
--more--"
Oh, so is Congress:
"Lawmakers support executive pay limits" by Anne Flaherty, Associated Press | July 29, 2009
WASHINGTON - Four months ago, the House tried to claw back $165 million in bonuses that American International Group paid its employees after accepting more than $180 billion in federal aid.
While the initiative lost momentum after Obama warned against vilifying Wall Street, the fires were stoked again this week with reports of a top Citigroup trader pressing the troubled bank to make good on its promise to pay him $100 million.
Well, YOU KNOW WHO HE is WORKING FOR, doncha?
They BOUGHT HIM OFF!!!
Representative Barney Frank, chairman of the House Financial Services Committee, said the system of hefty bonuses doesn’t make sense. “You get hired for this very prestigious job, and you get a salary, and now we have to give you extra money for you to do your job right?’’ asked Frank, a Massachusetts Democrat....
I'm tired of the feigned outrage, etc, Barn.
Representative Barney Frank, a Democrat from Massachusetts who is chairman of the House Financial Services Committee, said the system of hefty bonuses doesn’t make sense. (Manuel Balce Ceneta/Associated Press)
--more--"
"Frank warns of cram-down bill return" by Bloomberg News | July 30, 2009
WASHINGTON - Barney Frank, chairman of the House Committee on Financial Services, threatened to revive the mortgage “cram-down’’ bill that stalled in Congress this year, saying lenders are not being aggressive enough in modifying troubled home loans....
“Congress is very irritated with the banks....’’ said Paul Miller, a bank analyst at FBR Capital Markets in Arlington, Va....
I'm a little tired of the s*** fooleys, how about you?
Update: "Treasury Secretary Timothy Geithner praised the nonbinding vote requirement, known as say-on-pay in a statement yesterday."
Need I even say it?
Back to the administration:
WASHINGTON - Loans backed by the Federal Housing Administration will be eligible for payment reductions similar to the Obama administration’s loan-modification program, the government will announce today.
Effective Aug. 15, financially troubled homeowners who have an FHA-insured loan can apply for a modification under a program parallel to “Making Home Affordable’’ to help lower their payments and avoid foreclosure. The program, launched in March, is designed to lower monthly payments for 3 million to 4 million borrowers, although only about 200,000 have been helped so far. Lenders agreed this week to adjust 500,000 loans by Nov. 1.
The FHA, which backs about 5 million loans, is a government-run mortgage insurance program. It became the main source of home loans to borrowers with poor credit and low down payments after the collapse of the subprime lending market. By law, the FHA cannot offer borrowers interest rates as low as 2 percent, which are available under the Obama plan. Instead, the FHA will allow lenders to set aside up to 30 percent of the total principal balance until the house is sold or the property is refinanced. No interest will be charged on that amount. Lenders who participate will receive an incentive fee of up to $1,250 and can be reimbursed for $250 in costs.
--more--"
Why do I get the feeling the American people are still taking a screwing?
"US will pressure loan firms to act; Frustration builds over plan to redo mortgages" by Alan Zibel, Associated Press | August 4, 2009
Didn't I already read this with you?
WASHINGTON - The Obama administration wants to shame the mortgage industry into doing a better job of helping borrowers avoid losing their homes to foreclosure.
Pffft!
By publishing the names of companies that are lagging behind in the government’s plan to ease the housing crisis, officials are counting on public outrage to get the industry on track....
You guys are KIDDING, right?
We EXPRESS OUTRAGE and you CALL US TERRORISTS!!!
Has OUTRAGE ended the WARS?
Has OUTRAGE gotten us a SINGLE-PAYER healthcare bill?
Has OUTRAGE stopped the LOOTING?
Get outta here, 'bamer!
When the plan was launched in March, the government said it hoped to help up to 4 million financially distressed homeowners modify their mortgages to lower their payments. As of last week, just 200,000 homeowners were on track to get a modification, and the government has extracted an oral promise to reach 500,000 borrowers by Nov. 1.
Deja vu; Seems like I've read that before.
Meanwhile, foreclosures are continuing to rise. RealtyTrac Inc. says 1.5 million American households received at least one foreclosure-related notice in the first six months of this year.
“We’re losing houses rather than making modifications,’’ said Bruce Dorpalen, director of housing counseling at Acorn Housing Corp., a nonprofit housing group based in Philadelphia. “The foreclosure train has not stopped.’’
Because it is NOT PROFITABLE to BANKS!!!!!
The 31 participating companies include Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. They have received billions in federal bailout money and are sensitive about their public image.
Don't be. Until you LYING LOOTERS return the money and beg for forgiveness, nothing can repair your image. Otherwise,
But there also are many independent companies involved. Most are secretive about their operations and may be less sensitive to bad publicity....
Look at the ass-sucking a**holes latch on to the bank's butt!
Housing advocates say the plan has been a big disappointment so far, citing many cases in which companies have not followed the rules. When borrowers are denied, they often are not told why, leading to battles between mortgage companies, housing counselors, and borrowers.
I'm no longer disappointed in government because I no longer expect nothing from them.
The lending industry asks for patience and more time to get going.
You gotta be kiddding. It has been ALMOST a YEAR!!!!
The administration rolled out the program’s guidelines gradually this year. Much of the program was not finished until mid-May, and the rules were updated again in early July.
Why make excuses for them?
--more--"
Well, we know why form above: PROFIT!
Bank of America Corp. and Wells Fargo Home Mortgage, two of the nation’s largest owners of delinquent mortgages, have reduced mortgage payments for only a small number of homeowners under the Obama administration’s plan to stem the foreclosure crisis, well below the performance of other banks....
And they just reported how many billions in second-quarter profits?
Flashback: Bank of America Sitting on $386 Billion-Dollar Egg
Angry yet?
Bank of America, which holds nearly 800,000 of the loans, restructured only 4 percent of its share. Wells Fargo, with 330,000 such loans, has modified 6 percent of its loans. Several big banks did better, according to the Treasury report. JPMorgan Chase & Co. modified 20 percent of its share of the loans, and Citigroup Inc. modified 15 percent. Other lenders approved payment reductions on up to 25 percent of their loans.
In March, the government launched the $50 billion program to help up to 4 million financially troubled borrowers, those who can’t afford to pay their mortgages because their interest rates spiked or they have lost income. The Treasury’s report card analyzed eligible loans that were delinquent for at least 60 days. It showed that only 235,247 of those borrowers, or 9 percent of the total, have been given a three-month trial modification, which becomes permanent if the borrower pays on time.
Boston-area housing advocates were not surprised by the government’s findings. Bill Minkle, executive director of the nonprofit Ecumenical Social Action Committee in Jamaica Plain, said his counselors have had to send and resend documentation to lenders, and then wait a long time for a response. If loan modifications are approved, the new agreements often come with large balloon payments added to the end of the loan term.
The OUTRAGES of USURIOUS ONES NEVER ENDS! Off with their heads!
Minkle said Bank of America and Wells Fargo - which have received billions in federal bailout money - have been especially difficult. “They look for reasons to not do modifications,’’ Minkle said....
Eloise Lawrence, a staff attorney at Greater Boston Legal Services, wondered whether government incentives are enough to get lenders to help struggling borrowers. She said Bank of America has been one of the most difficult when it comes to helping her clients avoid foreclosure. In one case, she’s been negotiating for more than a year, without a resolution. “I can’t get an answer to basic questions in letters I’ve sent,’’ she said. “It’s so far from acceptable, it’s incredible.’’
Bank of America officials could not be reached for comment. Wells Fargo said it is helping distressed borrowers through other programs, and is accelerating its use of the Obama plan....
--more--"
Of course, when you sit across from that loan officer, he is your friend, right?
"Attorney sues lenders, says they created ‘toxic’ products" by Jenifer B. McKim, Globe Staff | August 5, 2009
Lenders were violating state law by writing loans that were almost certain to lead to default and foreclosure.
Related: Meet Your Criminal Loan Officer
Unlike smokers, who knew cigarettes were unhealthy, many homeowners thought they were being responsible. “The message was more that homeownership was a great thing....’’
So-called “payment option’’ mortgages, which allow borrowers to make minimum monthly payments on home loans. From the day the paperwork is signed, any unpaid interest is added to the balance. Eventually, the day of reckoning comes - usually after five years - and a borrower is required to make payments that cover the full mortgage interest and swelling principal.
“Pick-a-payment’’ loans became popular in 2005 and 2006 as borrowers strained to afford skyrocketing home prices, or sought money to make investments or home improvements. But as home prices fell, a growing number of borrowers defaulted on the loans. With little or no equity left in their properties, some walked away from their homes, while others coped with payment shock. About 40 percent of current “payment option’’ loans are delinquent, and the numbers could grow when $96 billion in mortgages reset by the end of 2010, according to the global rating agency Fitch Ratings.
But the BANKS got $24 TRILLION!!!!!!!!!
Borrower Jerome Hart said he didn’t realize when he refinanced his Dorchester triple-decker almost four years ago that the new mortgage would put him deeper in debt.
Which is the LAST THING the American people need.
Hart, a plaintiff in the Bank of America suit, said a broker told him he could take out a $483,200 loan to make improvements on his house, pay $1,668 in interest each month for a year, and then refinance to a more conventional loan. Instead, Hart’s interest rate spiked within months. Reworking the loan immediately would have cost him a $7,000 penalty for paying it off early.
WTF?:
Damned if you do, damned if you domn't, 'eh, America?
And when the year was up, Hart faced another surprise: Thousands of dollars in back-due interest payments were tacked on to his balance.
I'm telling you, the only thing they seem to understand is the separation of the head from the body.
His loan is now nearly $100,000 more, and the 61-year-old Vietnam veteran is struggling to keep up with monthly payments of about $3,000, working two jobs, 80 hours a week.
Oh, NOW I AM PISSED!
Yeah, SUPPORT the TROOPS!!!!!
“I feel as though I’ve been fooled or bamboozled into this program that they locked me into knowing from the very start it would be unaffordable for me,’’ he said. “Have you ever felt hopeless? That’s how I’m feeling.’’
Boat is crowded.
Others argue home buyers like Hart should have known what they were signing. They question whether coming to their rescue now will encourage others to act recklessly.
Who said that?
“You are supposed to act responsibly as an adult when you are signing those contracts,’’ said Keith Gumbinger, vice president of HSH Associates, a New Jersey company that publishes consumer loan information. “Why would you go and sign a contract when you can’t make the payments?’’
Well, contracts didn't seem to mean much when it came to AUTO WORKERS, did it? As for acting responsibly, you mean like the banks who gambled away all this money with their frauds?
But Bernardo Bettinelli, a Stoughton truck driver, said he and his wife, Carol, were no match for what they believe were deceptive banking practices. “There is some personal responsibility, if you don’t ask questions,’’ Bettinelli said....
Who is going to when they are selling you the AMERICAN DREAM?
Question that (well, yeah, now)?
They were stunned to see their debt rising rather than falling, even as they made regular payments.
(Blog editor shakes his head in angry disgust)
“Now we are making an interest-only payment,’’ Bettinelli said. “We have gotten to so far behind it’s ridiculous.’’
And CUI BONO, 'eh?
Wow, you SURE GOT a LOT OF HELP from your public servants, 'eh, 'murka?
All with the side benefit of a bowl-of-s*** breakfast.
