I think you can divine what I think of the foreclosure fraud settlement which releases liability on a host of fraudulent conduct for only a $5 billion guarantee from the banks, as well as $20 billion made up mostly of “credits” that HUD believes will translate into around $34.5 billion overall. The credits play out [...]

Housing and Urban Development Secretary Shaun Donovan sought to clarify comments to reporters made over the weekend about expectations of “substantial” principal reduction payments from the foreclosure fraud settlement made out of loans owned by private-label investors in mortgage-backed securities, not the banks themselves. In fact, Donovan told FDL News, the “large majority” of principal [...]

Housing and Urban Development Secretary Shaun Donovan mostly confirmed that private-label mortgage-backed securities investors, not banks or servicers, will end up shouldering the cost of much of the imminent foreclosure fraud settlement despite the risk of litigation from investors who are likely to challenge the forced losses on their securities in court. On a small [...]

We open the day by hearing about criminal indictments for bond traders. Federal prosecutors are preparing to file criminal charges against former Wall Street traders alleging they misstated the value of mortgage bonds, an issue central to the 2008 financial crisis, according to people familiar with the matter. The Manhattan U.S. Attorney’s office is planning [...]

A statement sent my way from Phil Angelides, the chairman of the Financial Crisis Inquiry Commission, plays into this debate over the RMBS working group in some interesting ways. The crux of the matter is that Douglas Holtz-Eakin, a Republican commissioner on the FCIC who did not sign onto the final report, made some statement [...]

Visit msnbc.com for breaking news, world news, and news about the economy Eric Schneiderman, co-chair of the newly titled “RMBS working group” investigating financial fraud, appeared on the Rachel Maddow Show last night (the interview starts around the 5:00 mark), and there were a few interesting moments. First you have his assessment of the the [...]

When I started digging into whether this Monday meeting with HUD and DoJ officials to go over a proposal for a foreclosure fraud settlement was legitimate, I couldn’t find one state Attorney General who mattered actually committed to showing up. When I say AGs who “matter,” I mean the ones who have been critical of [...]

Major banks caught a break when federal regulators determined that financial institutions could plunge below international liquidity levels in the event of a financial crisis. Banks will be allowed go below minimum liquidity levels set by global regulators during financial crises to avoid cash-flow difficulties. “During a period of stress, banks would be expected to [...]

The latest from the never-going-to-happen foreclosure fraud settlement – and I think a good New Year’s resolution would be to stop writing about this folly until it actually happens – concerns the disposition of the roughly $19-$25 billion “penalty.” As discussed, this is not really a penalty at all in the sense of a monetary [...]

One reason why rating agencies may be downgrading US banks is because of the extraordinary Jed Rakoff opinion, blocking the settlement between the SEC and Citigroup. Matt Taibbi examines the settlement today: Rakoff’s 15-page final ruling read like a political document, serving not just as a rejection of this one deal but as a broad [...]

Judge Jed Rakoff delivered a final blow to the enforcement paradigm followed by the Securities and Exchange Commission today by rejecting their $285 million settlement with Citigroup on an illegal mortgage backed securities deal, calling it “neither fair, nor reasonable, nor in the public interest.” In an order Monday, U.S. District Judge Jed S. Rakoff [...]