For foreclosure processors hired by mortgage lenders, speed equaled money

Millions of homes have been seized by banks during the economic crisis through a mass production system of foreclosures that was set up to prioritize one thing over everything else: speed.THIS STORYFor foreclosure processors hired by mortgage lenders, speed equaled moneyStocks for Bank of America, other banks fall again amid fears about mortgage issuersPoll: Is a foreclosure moratorium a good idea?View All Items in This StoryWith 2 million homes in foreclosure and another 2.3 million seriously delinquent on their mortgages – the biggest logjam of distressed properties the market has ever seen – companies involved in the foreclosure process were paid to move cases quickly through the pipeline.Law firms competed with one another to file the largest number of foreclosures on behalf of lenders – and were rewarded for their work with bonuses. These and other companies that handled the preparation of documents were paid for volume, so they processed as many as they could en masse, leaving little time to read the paperwork and catch errors.And the big mortgage companies overseeing it all – including government-owned Fannie Mae – were so eager to get bad loans off their books that they imposed a penalty on contractors if they moved too slowly.The system was so automated and so inflexible that once a foreclosure process began, homeowners and consumer advocates say, there was often no way to stop it.”The problem is when you try to fight back against this machine, well, its a machine,” said Michael Alex Wasylik, an attorney for homeowners in Dade City, Fla

via For foreclosure processors hired by mortgage lenders, speed equaled money.

Why the U.S. Has Launched a New Financial World War — and How the Rest of the World Will Fight Back | | AlterNet

Finance is the new form of warfare – without the expense of a military overhead and an occupation against unwilling hosts. It is a competition in credit creation to buy foreign resources, real estate, public and privatized infrastructure, bonds and corporate stock ownership. Who needs an army when you can obtain the usual objective monetary wealth and asset appropriation simply by financial means? All that is required is for central banks to accept dollar credit of depreciating international value in payment for local assets. Victory promises to go to whatever economys banking system can create the most credit, using an army of computer keyboards to appropriate the worlds resources. The key is to persuade foreign central banks to accept this electronic credit.

via Why the U.S. Has Launched a New Financial World War — and How the Rest of the World Will Fight Back | | AlterNet.

The 10 Biggest Corporate Campaign Contributors in U.S. Politics – DailyFinance

As the midterm elections slowly draw nearer, were taking a look at the companies whose deep pockets help keep Americas political campaigns rolling along. With the help of the nonpartisan folks at the Center for Responsive Politics, weve combined a list of the top 10 corporate campaign contributors, offering a a view of the candidates they support, the issues that concern them and their lobbying habits. Here are 10 companies that give America the best elections that money can buy, arranged in ascending order by campaign dollars contributed between 1989 and 2010.

via The 10 Biggest Corporate Campaign Contributors in U.S. Politics – DailyFinance.

Pay on Wall Street knows no boundaries MarketWatch First Take – MarketWatch

Brokerage stocks have failed to keep pace with the broader market, but pay is up.

“Trust us,” Wall Street said.

And what has it brought? A new study of 2010 compensation by The Wall Street Journal found that the industry will pay out a record $144 billion this year. The compensation represents a 4% increase from 2009. It also slightly outpaces a 3% revenue increase at the big brokerages — most earned in the early part of the year. See WSJ report on Wall Street pay.

The numbers starkly contrast the reality for most Americans. Those lucky enough to have work are seeing little, if any, rise in wages. The pay figures also sharply underscore how reform, bailouts and aftermath of the financial crisis failed to influence pay.

In the most heated days of the financial crisis, some banks moved forward. Morgan Stanley (MS 25.34, +0.19, +0.74%)  adopted reforms that put more emphasis on deferred pay. Some banks in Europe adopted clawback provisions or built bonus pools invested in toxic securities.

But most Wall Street banks only accepted pay rules forced upon them through the Troubled Asset Relief Program, and even those rules were only targeted toward those which received exceptional aid: American International Group Inc. (AIG 41.43, +0.39, +0.95%)  , Bank of America Corp. (BAC 13.25, +0.10, +0.77%)  , Citigroup Inc. (C 4.18, -.00, -0.02%)  , General Motors and Chrysler.

How onerous was pay czar Kenneth Feinberg? Well, no one’s missed a meal.

That said, pay does seem to be changing in the financial world. Up until the crisis, those who took inordinate risks resulting in short-term profits took heaps of money home despite the long-term consequences of their bets.

Today, it appears pay goes up whether or not those bets create any value at all.

.– David Weidner

via Pay on Wall Street knows no boundaries MarketWatch First Take – MarketWatch.

States to Probe Mortgage-Service Firms – WSJ.com

A coalition of as many as 40 state attorneys general is expected Wednesday to announce an investigation into the mortgage-servicing industry, an effort some of them hope will pressure financial institutions to rewrite large numbers of troubled loans.

The move comes amid recent allegations that mortgage-servicers, which include units of major banks such as Bank of America Corp., submitted fraudulent documents in thousands of foreclosure proceedings nationwide.The banks say the document problems are technical—largely the result of papers approved by so-called robo-signers with little review—and don’t reflect substantive problems with foreclosures. Still, they have drawn criticism from consumer advocates and state and federal lawmakers.

“I think the mortgage-servicing firms need to understand that they face real exposure now, and they would be well advised to take this very seriously, to clean this up by doing loan workouts to keep people in their homes, which up till now they’ve just paid lip-service to,” said Ohio Attorney General Richard Cordray.

Some in Congress have called for a moratorium on all foreclosures until the documentation issue is resolved, though senior Administration officials Monday again declined to endorse that idea. Servicers that have lied to courts by filing incorrect paperwork “need to suffer the consequences for their irresponsible actions,” said Shaun Donovan, the Secretary of the U.S. Department of Housing and Urban Development. But “where we have not found problems with particular servicers…we do have some risk of going too far.”

The attorneys’ general immediate aim is to determine the scale of the document problems and correct them. But several of them have said that the investigation could force the lenders and servicers to agree to mass loan modifications or principal forgiveness schemes. Other possibilities include financial penalties or changes in mortgage servicing practices.

via States to Probe Mortgage-Service Firms – WSJ.com.

Little-Noticed Bill Could Make It Harder To Challenge Foreclosures

Challenging foreclosures could become more difficult for homeowners if the president signs a bill that passed through the Senate last week. The little-noticed bill comes at a time when the validity of foreclosure proceedings across the nation have been called into question.

The House passed the bill in April, and its brisk journey through the Senate has drawn scant attention, Reuters reports. If signed into law, it would require courts to accept certain documents that have been notarized out of state, streamlining foreclosure proceedings and stripping homeowners of one legal method of challenging a foreclosure. The legislation would come just as a foreclosure validity crisis is mounting: GMAC, JPMorgan Chase and Bank of America have admitted to not properly reviewing some of their foreclosure documents.

The foreclosure controversies that have emerged in recent weeks throw doubts on the larger foreclosure system. A non-bank entity, Mortgage Electronic Registration Systems, has been initiating foreclosures, the Washington Post reports, exercising an authority that judges have ruled it does not have. In response to the mounting scandal, House Speaker Nancy Pelosi (D-Calif.) called on Tuesday for an investigation into foreclosure fraud. “This is a very big deal,” she told HuffPost.

Ohio Secretary of State Jennifer Brunner told Reuters the timing of the bill’s passage was “suspicious,” implying that mortgage companies might have engaged in behind-the-scenes lobbying.

via Little-Noticed Bill Could Make It Harder To Challenge Foreclosures.

Les Leopold: Wall Street Brings Class War to America?

Financial sector profits dramatically increased in the past several decades, peaking at over 40 percent of all corporate profits just before the economic collapse. Now the industry’s profits are chugging back up again.

After the inevitable crash, the financial sector and its investors had all the political clout they needed to ensure their swift rescue by the government. Instead of paying a hefty price for wrecking the economy with their bad bets as dictated by free market principles, they got bailed out at taxpayer expense.

The 2010 financial reform bill did not break up financial institutions that were too big to fail or too interconnected to fail. It also didn’t rebuild the Glass-Steagall Act’s wall between investment banks and depository banks. The six largest banks are now bigger than ever.

Congress rejected our calls for a windfall profits tax or financial transaction tax to help pay for the financial sector’s catastrophic damage to our economy. Instead Wall Street elites are again reaping enormous profits, leaving 29 million unemployed and underemployed people in the dust.

To pay for our rising public debt we’re being told to tighten our belts so that they don’t have to tighten theirs.

Economists assure us that the financial sector’s role is to prudently move excess savings into investment. But that’s not how Goldman Sachs, JP Morgan Chase, Morgan Stanley, the largest private equity funds and the largest hedge funds are raking in their billions. Their real cash cow is their secretive daily practice of “proprietary trading” — the equivalent of gambling in a rigged casino. This has nothing to do with investing in industries that might put our people to work. So our paltry economic growth is generating financial industry booty, not jobs.

Our billionaires might want us to think of them as great statesmen working to help our nation prosper and grow. But in reality, they’re busily siphoning off our nation’s wealth — and blocking all efforts to regulate or tax their destructive behavior.

via Les Leopold: Wall Street Brings Class War to America?.

TARP Cost Will Be Less Than Once Thought – NYTimes.com

Even as voters rage and candidates put up ads against government bailouts, the reviled mother of them all — the $700 billion lifeline to banks, insurance and auto companies — will expire after Sunday at a fraction of that cost, and could conceivably earn taxpayers a profit.

A final accounting of the government’s full range of interventions in the economy, including the bailouts of the mortgage finance giants Fannie Mae and Freddie Mac, is years off and will most likely remain controversial and potentially costly.

But the once-unthinkable possibility that the $700 billion Troubled Asset Relief Program could end up costing far less, or even nothing, became more likely on Thursday with the news that the government had negotiated a plan with the American International Group to begin repaying taxpayers.

via TARP Cost Will Be Less Than Once Thought – NYTimes.com.