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Sunday, February 28, 2010

Obama's Plan to Stem Foreclosures Will Do More Harm Than Good

By ZAC BISSONNETTE


Posted 2:30 PM 02/27/10 Real Estate

     The Obama administration is mulling a plan that would require lenders to make efforts to enroll homeowners in the government's Home Affordable Modification Program (HAMP) before they pursue foreclosure.


According to a memo reviewed by Bloomberg, the proposal "prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed."


If the program is implemented, banks would be unable to initiate foreclosure proceedings until they have tried to contact borrowers about HAMP at least four times by phone and at least twice by certified mail.


"Conceptually it is a good idea. Procedurally, it might create more havoc and confusion for the lenders and servicing agents due to lack of consistent processes and lack of manpower," says Dale Robyn Siegel, a mortgage broker, real estate attorney, and the author of The New Rules of Mortgages in an email.


The problem is that many borrowers who face foreclosure simply can't afford the house. Trial modifications and dragging out the foreclosure process won't do much good, other than to let some people live rent-free for awhile. "The four main reasons for foreclosures and bankruptcies are death, divorce, illness or loss of job. Recently, we must add a new one -- shouldn't have gotten the mortgage in the first place!" she says.


Forcing mortgage companies to aggressively court distressed homeowners with information about HAMP -- four phone calls and two certified letters -- will do little to help most homeowners, and will only burden loan servicers with useless bureaucracy that prevents them from devoting resources to people who need and want help.

Foxmuldar note: Everything Obama does pushes the US closer to becoming a banana republic. Now Obama wants folks that shouldn't have been able to buy a house they really couldn't afford to simply live rent free for months on end. All this does is prolongs the housing crisis. The sooner folks are forclosed on and moved out of those home, the sooner new buyers with better credit will be able to move into those homes and the housing sector will once again be back to a more normal cycle.  JMOP

Monday, February 22, 2010

Joe Sestak, " White House Tried to Buy Me Out of the Senate Race

Sestak says federal job was offered to quit race


Not so, says the White House

By Thomas Fitzgerald

INQUIRER STAFF WRITER

Rep. Joe Sestak (D., Pa.) said yesterday that the White House offered him a federal job in an effort to dissuade him from challenging Sen. Arlen Specter in the state's Democratic primary.

The disclosure came during an afternoon taping of Larry Kane: Voice of Reason, a Sunday news-analysis show on the Comcast Network. Sestak would not elaborate on the circumstances and seemed chagrined after blurting out "yes" to veteran news anchor Kane's direct question.

"Was it secretary of the Navy?" Kane asked.

"No comment," Sestak said.

"Was it [the job] high-ranking?" Kane asked. Sestak said yes, but added that he would "never leave" the Senate race for a deal.

A White House spokesman this morning strongly denied an offer had been made to Sestak. Before the spokesman issued the denial, a senior Pennsylvania Democrat said Sestak's account was met with anger by White House officials yesterday.

After yesterday's taping, Sestak said he recalled the White House offer coming in July, as he was preparing to formally announce his Senate candidacy in August. He declined to identify who spoke to him or the job under discussion. Sestak also would not say whether the person who approached him worked for the administration or was an intermediary for the offer.

"I'm not going to say who or how and what was offered," Sestak said in an interview. "I don't feel it's appropriate to go beyond what I said," because the conversation was confidential.

Sestak, 58, a retired Navy admiral, has said that some Pennsylvania Democratic leaders have tried to entice him to drop his campaign with promises of support for other offices in the future. He also has said that Sen. Robert Menendez of New Jersey, chairman of the Democratic Senatorial Campaign Committee, urged him to run when Specter was still a Republican, then tried to force him out after Specter switched parties.

But Sestak has brushed aside talk of White House pressure.

"He asked me the question, and I had to answer it honestly," Sestak said of his exchange with Kane. Sestak said he had declined the job offer immediately and added, "The person said, 'I knew you'd say that.' "

It's no secret that leading Democrats are backing Specter, a five-term incumbent who switched from the GOP last spring, soon after providing the critical vote for President Obama's $787 billion stimulus program.

Obama endorsed Specter at the White House and has raised money for him. Gov. Rendell has been vocal in calling Sestak's challenge harmful to the party, as has state chairman T.J. Rooney.

Party leaders are worried that an expensive primary could weaken an incumbent Democratic senator in what is shaping up to be a Republican year, and also about the possibility of losing the House seat that Sestak won in 2006. He is only the second Democrat since the Civil War to represent the Delaware County-centered Seventh District.

An added concern: possibly losing the seat in Harrisburg occupied by the leading Democratic candidate to replace Sestak in Congress, State Rep. Bryan Lentz. Democrats have a 104-99 majority in the state House; control of the chamber is crucial with Pennsylvania expected to lose a congressional district next year in the reapportionment that follows the census.

Still, Sestak's account was startling.

"Clearly, the offers are made," said Ross Baker, a Rutgers University political science professor who specializes in Congress. "When a White House wants to preempt a challenge, they'll dangle something. But it is almost never uttered."

In addition, Baker said, conversations in such cases are nuanced, and savvy operators know not to use explicit quid pro quo language.

He said he could not, off hand, think of another instance in which a candidate has divulged an approach from White House officials. Baker said that, in theory, that might be an advantageous gambit for a candidate who, like Sestak, is positioning his campaign as an outsider and wants to demonstrate that "the big guys" are worried about the challenge.

Nachama Soloveichik, spokeswoman for former Rep. Pat Toomey, the leading GOP candidate for the Senate seat, said she had no information on Sestak's story but added: "It's just like Arlen Specter to get an insider Washington deal to try to save his political career."

Christopher Nicholas, Specter's campaign manager, declined to comment on the report or the Toomey campaign comment.

Last week, after Sestak received nominating petitions for the House from the Pennsylvania secretary of state, talk buzzed in political circles that he would give up the Senate race and run for reelection.

He says he is running only for the Senate, and volunteers are circulating nominating petitions for that office.
Legally, Sestak could circulate two sets of petitions, and experts say there is no prohibition on running for two offices simultaneously.

Larry Kane: Voice of Reason is set to air Sunday at 9:30 p.m.; audio of the interview will be on the KYW NewsRadio Web site tomorrow. The show will be rebroadcast at 5:30 p.m. Wednesday.

Friday, February 19, 2010

Leftests using Pitchforks and Torches at Healthcare rally

Where's Pelosi and Reid now? These leftwing radicals holding pitchforks and torches. Is this the new form of demonstrations. You wouldn't find torches and Pitchforks at a teaparty rally.

Thursday, February 4, 2010

Bank of America E-Mails Show Lehman Was Buy Target

Feb. 4 (Bloomberg) -- When Bank of America Corp.’s board met to approve the acquisition of an investment bank on Sept. 15, 2008, members thought they were going to buy Lehman Brothers Holdings Inc., not Merrill Lynch & Co., according to New York Attorney General Andrew Cuomo.


The bank bought Merrill after examining its books for just 25 hours, Cuomo claimed. Shareholders approved the deal Dec. 5, 2008. The acquisition closed Jan. 1, 2009, after Merrill losses had increased by billions of dollars, a change the bank didn’t disclose before the shareholder vote, Cuomo said.

“It’s the way we approved acquisitions that ticks me off the most!!!” director Chad Gifford later wrote in an e-mail about the last-minute switch, according to a securities-fraud complaint Cuomo filed today in New York against the bank, former Chief Executive Officer Kenneth Lewis and ex-Chief Financial Officer Joe Price over their handling of the Merrill deal.

E-mails and written notes that were gathered by Cuomo for his investigation of the matter show personal reactions of executives as they learned of Merrill’s rising losses, which reached $16 billion before taxes by December 2008. They also show Merrill kept Price informed of the losses as they grew, yet he resisted pressure from his lawyers to disclose them to shareholders.

“Read and weep,” wrote Bank of America accounting officer Neil Cotty to Price on Nov. 4, 2008, when Merrill’s financial reporting unit forwarded preliminary October results with a loss of $6 billion. The merger documents had already gone out to shareholders. Five days later, the October loss was put at $7.5 billion before taxes.

When Price asked for a review of whether the losses -- then $5 billion after taxes -- should be disclosed to shareholders, his general counsel Timothy Mayopoulos said they should. An e- mail from Eric Roth, a partner at the bank’s outside law firm, Wachtell, Lipton, Rosen & Katz, sought research within his firm on “the duty to disclose,” according to the lawsuit.

Roth’s notes from a call with Wachtell Lipton partner Warren Stern say, “duty to bring to shareholders all info material to vote.” The firm told the bank it should disclose the losses, Cuomo claims.

The law firm was “marginalized” by the bank after that, choosing not to disclose, Cuomo claimed. Mayopoulos was later fired by Price and replaced by Brian Moynihan, who later became CEO, Cuomo said.

The bank said it was “regrettable” that Cuomo filed his charges, which it found to be “totally without merit.” Lawyers for Lewis and Price denied wrongdoing. Wachtell declined to comment in a statement.

The ‘Downside’

Cotty warned Price in December e-mails that Merrill’s evaluation of its securities might be too optimistic, so there may be “downside” in its estimated results.

Lewis by then was worried about his job, according to an e- mail from Federal Reserve Bank of Richmond Senior Vice President Mac Alfriend that is cited by Cuomo.

Lewis “is worried about stockholder lawsuits; knows they did not do a good job of due diligence and the issues facing the company are finally hitting home and he is worried about his own job after cutting loose lots of very good people,” Alfriend wrote on Dec. 23.

Lewis did not want to tell shareholders of the pending government bailout and asked “whether he could use as a defense” that the government didn’t want him to disclose, according to an e-mail from Fed Chairman Ben Bernanke. “I said no,” Bernanke wrote.

The case is People of State of New York v. Bank of America, State Supreme Court (Manhattan).

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.

Last Updated: February 4, 2010 17:45 EST