Monday, January 30, 2012

CT DeLauro urges mortgage, foreclosure rules

DeLauro urges mortgage, foreclosure rules

Updated 03:36 p.m., Monday, January 30, 2012
  • Representative for Connecticut's 3rd congressional district, Rosa DeLauro speaks during the screening in Washington, DC, for the TV movie "Five" hosted by Lifetime and Jennifer Aniston on Oct. 3, 2011. DeLauro, with Attorney General George Jepsen in Milford on Monday, urged support for a bill that she says would standardize mortgage servicing and foreclosures.  (Photo by Paul Morigi/Getty Images for Lifetime) Photo: Paul Morigi, Getty / 2011 Getty Images
    Representative for Connecticut's 3rd congressional district, Rosa DeLauro speaks during the screening in Washington, DC, for the TV movie "Five" hosted by Lifetime and Jennifer Aniston on Oct. 3, 2011. DeLauro, with Attorney General George Jepsen in Milford on Monday, urged support for a bill that she says would standardize mortgage servicing and foreclosures. (Photo by Paul Morigi/Getty Images for Lifetime) Photo: Paul Morigi, Getty / 2011 Getty Images

MILFORD -- U.S. Rep. Rosa DeLauro, D-3rd, urged support Monday for a bill she has introduced that she says would standardize mortgage servicing and foreclosures.
DeLauro's bill mirrors a multistate settlement to be announced as soon as next week that will require one point of contact for a customer seeking a mortgage modification and an independent review of the documents. The settlement will also bar "dual tracking,'' in which a lender pursues loan modification and foreclosure at the same time, said Attorney General George Jepsen, who supports the measure.
The two officials held a news conference at the Milford United Way to explain their efforts to protect homeowners from what the congresswoman called "the most important issues affecting the economic recovery. We have a moral responsibility to do something in this area.''
Jepsen said the agreement, which took more than a year to negotiate, could ultimately cover residents of 40 states. Besides the new safeguards, the settlement will have money -- about $27 million in Connecticut -- to help those still struggling to pay mortgages on devalued properties and to aid those harmed by the "robo-signing'' and other industry scandals.
"Unlike the tobacco settlement, this money will not go into the state's general fund, but will be used to help those directly affected,'' the attorney general said. But the proposed settlement only covers the nation's five largest lenders, who account for about 60 percent of all the mortgages outstanding. "We need something that is enshrined as public policy, not just a negotiated settlement.''
DeLauro said that her bill will allow borrowers to sue for damages, and in some states they may also be able to use the terms of the legislation to stop a foreclosure when paperwork snafus or handling errors affected the decision on a loan.
The House bill has no co-sponsors yet. "I am seeking bi-partisan support because obviously facing the loss of your home is not a partisan issue,'' DeLauro said. A similar bill has been introduced in the U.S. Senate.
Jeff Gentes, an attorney at the Connecticut Fair Housing Center, said that although the legislation would allow another unit of the same bank processing the loan to do the review, "the two departments do operate independently. It is taking advantage in a good way that one hand doesn't know what the other is doing.''
A Bethany couple, Rick and Dawn Murphy, detailed their battle with the Bank of America to stave off foreclosure. After they got their mortgage modified Dawn filed for bankruptcy and the bank tried to restart the process, the couple said.
An existing law prohibits that, said Gentes, who worked with the Murphys. "But the bank also refused to accept their payments and then wanted to say that they were behind on their agreement.''
Reach Frank Juliano at 203-520-6986 or

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Thursday, January 26, 2012

The CFPB Rocks! No wonder the banksters hate it.

We have a Home Depot credit card we utilize extensively. When you own a marina and RV park there are no lack of things that need fixing and replacing. So we regularly take advantage of the 6mo and 12mo no interest promos. Of course, not paying interest requires you stay on top of it and make sure they are paid off. Usually, I stay a couple of months ahead of the due dates, writing a check for new purchases made and allocating a portion to the promotional balances. Now like most people, times are tight and I had a promo balance expiring in January. So I wrote my check and was a bit shocked when I received my statement saying I had been charged interest. Called HD (citibank) and had a long phone call with them. I was a bit suprised at what they told me so I decided to open a case with the Consumer Financial Protection Bureau.
Follow me below the tangled electric cord for the whole story.
Here is what I submitted:
What Happened:
Home Depot Credit Card. I always pay current balance off and put money toward the promotional balances. We use these promotions as a way to finance repairs/maintenance at our business so I've been playing this game for quite awhile. So I was quite suprised when I opened the bill today and see that I'm being assessed $6.79 in interest. After a long hold which involved a supervisor getting involved to figure it out. I was told the following: If the promotional balance due date is within 60 days, they apply payments as follows: In the 1st 30 days (of the 60) The payment satisifies the minimum payment and the rest is applied to the promotional balance. In the 2nd 30 days (of the 60) All of the payment goes to promotional balances. So this application method made current purchases into revolving balance accruing interest. I do not think this is fair and nowhere do I recall seeing that spelled out. At the moment, the customer rep tells me that I have a current revolving balance of 664.98 and she can't even adequately explain where it is coming from. So I will fix this by sending a check for 1300.00 to more than cover this balance and purchases and apply something to the next promotional balance which is due 7/1/2012. I think they need to make it clearer about this 60 day window thing. And frankly, I do not recall this happening before and we've been playing this game for a long time. I've got an entire years worth of statements in front of me. I would be more than willing to copy and send to you if need be.
Category: Billing statement
Desired Resolution:
Make it clear on the stmt how payments will be applied. Your minimum payment due is $ Your current purchases are $ Any payments made will apply to promotional balance expiring xx/xx/xx prior to being applied to minimum payment and purchases.
I have removed personal info from the response..... and bolded the statute she mentions. Maybe somebody knows more about it.
Company responded

Explanation of closure
Office of the President Home Depot Credit Services P.O. Box 9058 Gray, TN 37615 January 25, 2012
Dear Ms. xxxxxx: I am in receipt of your complaint forwarded to us by the Consumer Financial Protection Bureau. As a representative of Citibank’s Executive Office, I was given the opportunity to review and respond to your concerns regarding the billing of your Home Depot account. As reflected on your December 5, 2011 billing statement the New Balance of your account on that date was $3,854.94. Of this amount, $3,494.64 was the total of the Plan Balances for your promotional purchases and $360.30 was the total of your revolving credit purchases. As stated on this statement, the payment amount needed to avoid interest charges was $637.22. This amount represents the Plan Balance ($276.92) of the promotional purchase ending on January 1, 2012 and your revolving credit balance ($360.30). Our records indicate that your account was opened in July 2002 and we appreciate the manner in which you have handled your account. During each billing period, payments received are first applied to the minimum payment due for the account and then applied to promotional purchases ending within the current billing period and within the next one to two billing periods. This is consistent with recent revisions to Regulation Z that were part of the Credit CARD Act of 2009. While your payment was applied in this matter, the reason your account was billed an interest charge is because your payment in the amount of $550.00 was not large enough to cover both the revolving balance ($360.30) and the Plan Balance ($276.92) of the promotional purchase ending in the current period. As a gesture of goodwill, we have credited your account $6.79 for the billed interest charges. We received your payment in the amount of $1,300.00 on January 20, 2012. As of today’s date your account balance is $3,055.00 all of which is for promotional purchases. Please note on the first page of your billing statements a statement message provides you with the payment information needed to avoid interest charges. Thank you for bringing this matter to our attention and the opportunity to reply. Sincerely, xxxxxx,xxxxx Executive Response Unit
First, I am grateful they are crediting the interest. Second, it was a total of nine days till I got a response. So the moral of the story I suppose, is government can work for the people! And, if you play the promotional game, be aware of how the banksters apply your payments.
Updated to remove my surname from the response letter. Wasn't too concerned about the community here but didn't think about the fact it might get facebooked and tweeted. thanks Allison!

Wednesday, January 25, 2012

My Pal Jamie Dimon interview by Maria Bartiromo

Bartiromo: JPMorgan's Jamie Dimon sees housing at bottom

This year kicked off with some improving economic data on jobs, on retail spending and even a rally in the stock market. So does the good news suggest the economic recovery is finally taking hold and 2012 will be a positive new day for job seekers? For some answers, I caught up with Jamie Dimon, who heads the USA's largest bank with $2.2 trillion in assets and operations in more than 60 countries. In a series of interviews during his firm's health care conference last week, the CEO of JPMorgan Chase was optimistic and said the troubled housing market has bottomed. He pointed to innovation in health care as a testament to America's strength and heft. Our interview follows, edited for clarity and length.
  • Jamie Dimon, chief executive officer of JPMorgan Chase,  says Europe is his biggest worry.
    Scott Eells, Bloomberg News
    Jamie Dimon, chief executive officer of JPMorgan Chase, says Europe is his biggest worry.
Scott Eells, Bloomberg News
Jamie Dimon, chief executive officer of JPMorgan Chase, says Europe is his biggest worry.
Q: You have a great vantage point in deciphering where we are in this recovery, with a huge consumer banking and capital markets business. How does the economy look in 2012?
A: Barring a disaster out of Europe, I do see a fairly broad, growing economy. The economy is in a mild recovery, which is strengthening. Corporations are in outstanding financial shape. They're earning money. They've got plenty of capital, plenty of wherewithal. Middle-market companies, of which most are private companies with sales of between $20 million and $2 billion, they are in fabulous financial shape and have good margins. They have a lot of capital and liquidity. We see small businesses in better shape. But we are not seeing a huge formation of small businesses yet.
Q: Where is the loan growth?
A: In two months, as of September, we've seen small-business loans up 70%, middle-market loans up 18%. And, hopefully, confidence, which is the secret sauce, will come back, too.
Q: What are you most worried about?
A: Europe. It's the biggest fly in the ointment.
Q: Do you think the European Central Bank and the leaders there have responded to the crisis in the right way?
A: The ECB changed what could be collateral for the European banks, which is important. They made what a bank can use as collateral much wider, and they put unlimited use of three-year lending. It was a huge move, much bigger than the market reaction we saw. It's possible that this one thing has removed all funding issues for the big European banks. It gives them breathing room and can help support asset prices in the meantime. The European banks are still being forced to raise capital and by that, they still have to sell assets. They're being forced to sell assets to raise even more capital at precisely the wrong time. It's not a massive amount, but you're starting to see assets for sale, loans for sale. It's tough. You can't do a good job for shareholders raising capital with huge discounts for some assets.
Q: Are there opportunities for JPMorgan in all of this? Do you look at that situation and say you want to be a buyer of certain assets? How do you buy in that environment?
A: We want to be good citizens there. We've cut back exposures there, but we've kept all the client business going, a great risk to ourselves. But we think it's very important that we'd be doing business in Italy 50 years from now, but we're trying to be very careful on that. In the meantime, there are certain assets we're looking at. There are certain businesses we're looking at.
Q: What about housing in the U.S.?
A: We have seen the worst. We are at the bottom. We may hug along the bottom for a while, but we are at the bottom. People think housing is terrible, but the early indicators tell you a lot about where it will be in 18 months or so. Supply and demand are rapidly coming in balance. Renting is now more expensive than buying in half of America. We're adding 3 million Americans a year. In the next 10 years, we have 30 million more Americans. Those 30 million Americans are going to need 15 million homes, or something like that. Household formation has gone so low. You had kids move back home — and, yes, by the way, it doesn't work for them, either. And household formation we think will have to go close to a million and a half. Once it goes to (that), housing construction will probably have to go up to a million and a half. Two million jobs, and all this shadow inventory stuff will be getting better, not worse. And it's the rate of change which is important, not the absolute level.
It's still terrible, by the way. But we think it's going to get better over time. And then hopefully, maybe, we'll have some rational policies around housing which will make it better. So housing is near the bottom. Once you see employment start to grow 300,000, 400,000, 500,000 a month, you better buy that house you want really soon because it'll change in price right away.
Q: Is there a plan that you would envision to get some of that 90% mortgage origination away from the government-run Fannie Mae and Freddie Mac and instead coming from the private sector?
A: Yes. Almost everything being originated today is being sold to Fannie and Freddie. There's a certain amount of jumbo mortgages which the banks originally keep for themselves. You can design a mortgage system that is different without a Fannie and Freddie, but there are principles you have to have, to have a good system. If the government wants to do social policy, it should not be done in a quasi-public company. If you have a mortgage guarantee company which is done by the U.S. government, it should be guaranteed by the originators, i.e., the shareholder. You can set up a system that the government's not involved at all, but you have to transition there over 10 or 15 years because Fannie and Freddie are so big. Mortgages will cost a little bit more, but it actually may be a healthier system. So you could do either one. I just hope people who are responsible for this sit down and do it very thoughtfully.
Q: The Federal Reserve is conducting new so-called stress tests. We will learn the results in March. JPMorgan has submitted a plan to handle potential stress. How will your firm come out on this?
A: There's a very good thing about the stress test. I don't agree with all of it. But I agree with stress tests. You should be able to look at a JPMorgan and say, "Can you handle massive stress?" But the stress here is 13% unemployment, home prices down 20%, equity markets down 50%, a catastrophe in the markets and a catastrophe in Europe. And, yes, we can handle all that and be well above the 5% tier-one capital required. I'm hoping what it shows is that American banks — there may be an exception or two — are extremely well capitalized and can handle extreme stress, and maybe one day we'll just take this issue off the table. I also believe, by the way, they can prove the point I've been making, that at one point we'll get into too much capital because we're going to have to hold on to more capital than this number. That's too much, and maybe this helps prove that.
Q: Shareholders of JPMorgan saw their stock fall in 2011 (down 20%, including dividends). How will you return value to shareholders? Will you raise your dividend after the stress-test results come out?
A: That's a board-level decision, but when we raised it the last time, back to $1 a share, we did tell the world that the intent is that every year we will look at it and hopefully give shareholders a little bit more.
Q: Are interest rates going to go up in 2012?
A: Rates are going to go up. The faster things improve, the sooner you get higher rates. So the first part of higher rates is a good thing. Going back to a normal (yield) curve would be a great thing if this was accompanied by growth and not high inflation. There's some people who are afraid you're going to have too much inflation when this all turns around. That's a legitimate concern, too.
Q: What is it going to take to get jobs created in this country again?
A: You're starting to see it already, and a little of that becomes self-sustaining. Because if you got a job, you might buy a new car. You might buy a house. People get married, they have babies. That creates more demand. So we have a very broad-based economy, a very strong America. It'll recover. It always has. Even after the worst of the worst. I'm going back to after the Civil War, after World War II, after we had the malaise in the '70s, it recovered each time. And I'm not sure you can always point out the one thing that made it recover other than just the good old American spirit that we all like to work and we all want to grow and we all want to expand. Right now we seem a little overly depressed.
Q: What do you want to say to the Occupy Wall Street protesters who are upset about the income gap and upset about the banks making money while they feel that they're not making any money?
A: When people complain, I always try to listen to where the legitimate complaints are. So here's what's legitimate. There's more income inequality in America than some years ago. I think that that's not a good thing. That's generally true. The second is, if you look at the institutions of America, not just banks, and if you look at Washington and Wall Street, we let them down. That's true, too. Once you go beyond that, you start to become indiscriminate. You should be asking, "What will you do to fix it and change it?" Whether it's better regulations, better laws, progressive taxation. We should all try to do our part.
Q: You have talked a lot about demonizing of the industry in recent years. Would the pressure on banks be alleviated under a different administration, and will you support President Obama this year in the November election?
A: What I would hope for: that there is no so-called pressure in the industry. That we had rational collaboration about how to build a great country with great rules and regulations that allow business to thrive. If business doesn't thrive, it hurts America. We need improved relations, more collaboration, more thought and more consistency as we go about trying to make sure we have the best country in the world. Not scapegoating and finger-pointing. I haven't decided what I'm doing in terms of who to support. Yes, I'm still a Democrat, but I find it very hard to listen to at least the left part of that party right now, and I don't know what I'm going to do yet.
Bartiromo is anchor of CNBC's Closing Bell and anchor and managing editor of the nationally syndicated Wall Street Journal Report with Maria Bartiromo. Follow her on Twitter @mariabartiromo. To see previous columns, go to
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