subprime mortgages

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The 3% Mortgage Down Payment Is Back

Fannie Mae, Freddie Mac hope to spur homebuying among first-time purchasers

(Newser) - Apparently Fannie Mae and Freddie Mac feel enough time has passed since the subprime mortgage crisis : The government-supported mortgage guarantors say they'll back mortgages with as little as a 3% down payment, CNN Money reports. Both agencies hope to encourage first-time homebuyers who may be having a hard time... More »

JPMorgan Covered Up Bad Loans, Emails Show

Lawsuit alleges that firms smoothed over analysis to boost profit

(Newser) - JPMorgan Chase papered over or ignored analysis showing that the loans it was pumping into the financial system were "defective," according to emails and other documents filed as part of a lawsuit against the company. In September 2006, an outside assessment found that "nearly half the sample... More »

Did Banks Get Off Easy in $8.5B Mortgage Settlement?

Homeowner: 'What's $1K going to do for me?'

(Newser) - Sure, plenty of people—3.8 million, in fact—will benefit from yesterday's $8.5 billion mortgage settlement with banks. But some consumer advocates say the banks themselves have made out the best on the deal, the AP reports. They argue that the institutions are getting away with a... More »

Big Banks Agree to $8.5B in Mortgage Settlement

Banks agree to $8.5B deal with regulators, as BofA gives Fannie $10B

(Newser) - A group of 10 major lenders has agreed to pay federal regulators $8.4 billion to settle claims of foreclosure "robo-signings" and other abuses, the New York Times reports. Among the lenders onboard are JPMorgan Chase, Citibank, and Bank of America. About $3.3 billion of that will go... More »

Bear Stearns Email Refers to Bonds as 'Sack of S***'

But the bank kept foisting them on investors, says lawsuit

(Newser) - Today's newly filed lawsuit accuses Bear Stearns—now owned by JPMorgan Chase—of knowingly pushing rotten mortgage securities onto investors before the financial meltdown. And how might federal prosecutors go about proving it? It won't hurt that they've got Bear Stearns emails referring to one deal as... More »

Goldman Won't Be Charged Over Financial Crisis

Not enough evidence to pursue fraud cases, feds decide

(Newser) - Looks like Goldman Sachs is off the hook for its role in the financial crisis. The Justice Department and Securities Exchange Commission have ended two investigations into the bank's role in the crisis, concluding that "there is not a viable basis to bring a criminal prosecution with respect... More »

Private Student Loans Work Like Subprime Mortgages

Lenders didn't check whether recipients could repay

(Newser) - Private lenders offered student loans without confirming that recipients could pay them back—then sold them to investors, thus protecting the lenders against defaults, a government study finds. Sound familiar? It should: It's a lot like the process that caused the subprime mortgage crisis. Some $8.1 billion worth... More »

Crooked Corporate America Is Killing Capitalism

Scandals destroying trust, which markets need to function

(Newser) - With Britain's Libor scandal piling on top of an endless parade of stories of crooked finances—hundreds of billions of dollars in lousy mortgages and securities, entire towns going bankrupt , Wall Street execs saying they need to break the law to be successful, and more—Americans' trust in banks,... More »

Subprime's New Frontier: Auto Loans

Banks jumping back into lucrative market

(Newser) - That whole "subprime crisis" hasn't scared banks away from the lucrative world of subprime lending. The nation's top subprime lenders—like Capital One, GM Financial, HSBC, and JPMorgan Chase—are all trying to woo back less-creditworthy borrowers, who tend to rack up late fees while paying rates... More »

Feds to Charge Crooked Bond Traders

Ex-Credit Suisse traders accused of bonus-boosting fraud

(Newser) - Looks like it's payback week: Federal prosecutors are planning to file fraud charges against four former Credit Suisse traders accused of overstating the value of mortgage securities in order to boost their bonuses, the Wall Street Journal reports. The alleged fraud happened in early 2008 as problems with complex... More »

This Woman's Job: to Make You Like BofA

Anne Finucane juggles politicians, shareholders, and customers

(Newser) - Anne Finucane has one of the hardest jobs in the country: to make us like Bank of America. The high-powered image-maker juggles politicians, interest groups, and her own boss—BofA President Brian Moynihan—in an ongoing effort to resuscitate the bank's flailing reputation and lowly stock price since the... More »

Ex-Banker: Yeah, Collapse Was Our Fault

So why haven't homeowners been bailed out?

(Newser) - If you were trying to get a loan in southern Florida in 2007, bankers like James Theckston were there to help. "If you had some old bag lady walking down the street and she had a decent credit score, she got a loan," Chase's then-regional VP of... More »

Perry Gave Huge Tax Grants to Subprime Lenders

Countrywide, WaMu got $35M as they upped risky loans

(Newser) - Rick Perry handed mortgage lenders millions to draw them to Texas—right when their risky lending practices surged. The governor gave Countrywide $20 million and Washington Mutual $15 million in what he called an exemplary job-creation move; in effect, that $35 million subsidized dangerous subprime lending, an AP analysis of... More »

Feds Sue Big Banks Over Mortgages

US accuses them of dodging due diligence as crisis fallout spreads

(Newser) - The Federal Housing Finance Agency—the agency behind Fannie Mae and Freddy Mac—has filed suit against more than a dozen big banks for their role in the mortgage meltdown mess. The feds, seeking billions in compensation, accuse the banks of misrepresenting the quality of mortgage securities, reports the New ... More »

Fed Hits Wells Fargo With Record $85M Fine

Bank accused of mortgage abuses

(Newser) - Wells Fargo has agreed to cough up $85 million to settle allegations that it steered borrowers with good credit towards expensive subprime mortgages and falsified information on borrowers' income on loan documents. The Federal Reserve says the fine, the first levied in relation to the predatory big-bank practices blamed for... More »

Goldman Preps Counterattack on Senate Report

Subcommittee's numbers are wrong, firm says

(Newser) - Goldman Sachs is ready to take a stand against a Senate subcommittee report that slammed the firm for allegedly misleading clients . Goldman will argue that the report exaggerates the firm’s 2007 bets against the housing market; it may release documents that support its belief that the subcommittee’s investigation... More »

SEC Poised to Charge Fannie, Freddie Execs

But regulatory agency disagrees, and nothing has yet been filed

(Newser) - The SEC is making moves toward charging current and former Fannie Mae and Freddie Mac executives, sources tell the Washington Post , but the Federal Housing Finance Agency disagrees with the move. The SEC has sent notices to at least four senior executives over the past eight weeks warning them they... More »

Taxpayers Footed Fannie, Freddie's $160M Legal Bill

Americans spend $24.2 million to defend executives

(Newser) - Taxpayers have spent more than $160 million defending Fannie Mae and Freddie Mac in fraud lawsuits since the government took over the companies in 2008. The closely guarded cost was released last week after Rep. Randy Neugebauer requested the figures last year. Some $132 million of the total went to... More »

FBI Plans Massive Sweep of Mortgage Fraudsters

Hundreds of arrests expected next week

(Newser) - FBI agents will fan out across the country next week and arrest hundreds of shady lenders who duped people into taking mortgages they couldn't afford, reports the Financial Times . The crackdown on mortgage fraud will go after companies that misled people about their loans and potential rescue programs, or that... More »

Capitol Hill's Favorite New Book: The Big Short

Lawmakers love how it explains meltdown

(Newser) - Listen to debate over financial reform on Capitol Hill for any length of time and you might think lawmakers were being paid to plug The Big Short, by Michael Lewis. They're not; they just love the way the book explains the financial meltdown and how a handful of investors made... More »

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