1. Federal Reserve’s Independent Foreclosure Review and HAMP Escalations Review
2. Federal Reserve Board releases action plans for three supervised financial institutions to correct deficiencies in residential mortgage loan servicing and foreclosure processing
3. Independent Foreclosure Review | OCC Says Independent Consultants Can’t Contact Borrowers

1. Independent Foreclosure Review Fail | NY Times – Foreclosure Relief? Don’t Hold Your Breath
2. Independent Foreclosure Review | OCC Says Independent Consultants Can’t Contact Borrowers
3. Federal Reserve’s Independent Foreclosure Review and HAMP Escalations Review

1. Attn Captain Obvious | Fed Proposes Rule that Would Require Creditors to Determine a Consumer’s Ability to Repay a Mortgage BEFORE Making the Loan
2. Mortgage Bankers Association Letter to the Federal Reserve RE “Skin in the Game” and the Ability of Borrowers to Repay
3. Mass Court May Rule on Retroactivity of some Foreclosures Tied to ‘Naked Mortgages’

1. Cummings, Tierney Urge Issa to Subpoena Documents from FHFA on Principal Reduction
2. Elijah Cummings | Oversight Committee Democrats Urge FHFA Director to Produce Documents on Principal Reduction
3. William C. Dudley, President of the Federal Reserve Bank of New York, Makes Strong Pitch for More Aggressive Housing Policies Including Targeted Principal Reduction Program

QE3 stays in port ... for now.

With economic indicators flashing red all over the place, the Obama administration may be looking at some bad news this spring on economic growth.  If they’re looking to the Fed to toss them a lifeline, they may be waiting a while.  Despite some expectations that the Federal Reserve might embark on a third round of [...]

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1. Revolving Doors | Bank of America Hires Ex-SEC Official Gary Lynch
2. Dylan Ratigan | Exposing the inner workings of Wall Street
3. Revolving Doors | Lender Processing Services, Joe Jacquot, Pam Bondi and Foreclosure Fraud

1. OCC Assesses Civil Money Penalty of $20 Million Against Wells Fargo, Requires Restitution of $14.5 Million to Municipalities Harmed by Bid-Rigging on Financial Products
2. OCC Settles Civil Money Penalties Against Large National Bank Mortgage Servicers for $394 Million; Penalty Assessment Coordinated with Servicers’ Actions and Payments Under Federal-State Settlement
3. Federal Reserve Orders $85M Civil Penalty Against Wells Fargo for Steering Potential Prime Borrowers Into More Costly Subprime Loans and Falsifying Income

1. More than 7.2 Million Loans Behind On Payments; Estimated 1 Million Properties in REO Status
2. Federal Reserve Orders $85M Civil Penalty Against Wells Fargo for Steering Potential Prime Borrowers Into More Costly Subprime Loans and Falsifying Income
3. Mortgage Bankers Association Sold $79 Million Headquarters for $41 Million, New Buyer Flips Building for $101 Million

So there is a bit a kerfuffle going on between Luigi Zingales and Brad DeLong. By and large DeLong has the better of the argument, but there is one small piece where he could benefit from the services of an insolvency lawyer.

Oh wait, that's me.

So Zingales says:

    The “put options” offered to Bear Stearns Cos… were subsidies…

He's talking about the consideration given to Bear Stearns shareholders (originally $2, then $10) as part of Chase's takeover of the company.

And DeLong responds:

But Bear Stearns was not offered a put option. Bear Stearns was forced into liquidation over a weekend at a price of $2/share (then raised to $10/share). The market the previous Friday had guessed that it would be taken over at a price of $60/share. You can't call a Federal Reserve intervention that leaves a bank's shareholders $50/share poorer than they had thought they were the previous Friday a "subsidy'.    

I suspect DeLong is smart enough to know that's wrong. Until shareholder losses hit 100%, it is really irrelevant that they've suffered large losses already. And indeed if Bear Sterns was insolvent, and I think there is good reasons to think they were, shareholders are not even the right claimants to look at -- the real question is how much the subordinated debtholders should loose.

1. Federal Reserve Board announces a formal enforcement action against the Goldman Sachs Group, Inc. and Goldman Sachs Bank USA
2. Bloomberg | Goldman Sachs Will Sell Litton Loan Servicing to Ocwen for $264 Million
3. Shocking – Goldman Sachs Documents List Financial Institutions with Whom Goldman Had Hedged The Risk of its Exposure to an AIG Default

1. Remember the Alamo! | Mr. Deeds (Jeff Thigpen) Goes National With Battle Cry Against the Largest Financial Institutions in the World
2. Federal Government and State Attorneys General Reach $25 Billion Agreement with Five Largest Mortgage Servicers to Address Mortgage Loan Servicing and Foreclosure Abuses
3. Report | Government Accountability Office (GAO) Audit of the Federal Reserve’s Emergency Actions

1. Statement of Edward J. DeMarco Director FHFA On the State of the U.S. Housing Market: Removing Barriers to Economic Recovery
2. William C. Dudley, President of the Federal Reserve Bank of New York, Makes Strong Pitch for More Aggressive Housing Policies Including Targeted Principal Reduction Program
3. Letter | Elijah Cummings to Edward DeMarco RE Freddie and Fannie Fees

While we’ve been blogging, Stevie has begun his dissertation fieldwork in Korea. He emailed Bill the other day: “Yesterday I opened a bank account here in Seoul, and conducted the entire interaction in Korean. For some reason, I don't get an ATM card, which is really strange. But in all likelihood I had no idea what the teller was trying to say to me, so I might end up getting a card in the mail next week or something. As ‘technophiliac’ as this culture seems to be, cash is still king; outside of the large department stores and global restaurant chains, I don't see any POS terminals.”

There’s hype, there’s reality, and there’s possibility around all the cashlessness claims that follow on the heels of mobile and other digital payment platforms. We want to conclude our guest blogging with a gesture toward some of the possibilities of mobile money--and a challenge for the Credit Slips community.

"I heard you speak a while back at the foundation and was excited to see your blog reference to BTC."

At first Bill was confused—Bitcoin? He’d never written a blog about Bitcoin. Maybe she'd read his piece here.  But then he realized: BTC = Better Than Cash (see our first post). This is a useful little object lesson. When some people hear "digital currency" and "toward a cashless society" they immediately think, oh no, here come the money nutters wanting to end the Federal Reserve and put us on a gold standard. Or they think, hooray! Let’s end fractional reserve currency once and for all! But that's the BTC/Bitcoin side of the conversation. The BTC/Better Than Cash side is different, and it's important to stress those differences.

In a recent blog post at CGAP, Ignacio Mas and David Porteous make a case not for freedom from cash, but alternatives alongside cash--for everyone. They envision a world of “LiFi” – liquidity with fidelity – in which “every person has an electronic store of value which they can easily use to make and receive payments in real time” (our emphasis). They compare this to the electricity grid. And, yes, they argue “the payments grid in developing countries has to function more like a utility.” They argue that oversight of such a grid should fall to payment regulators. Mas and Porteous’s proposal is roughly in alignment with the Bill and Melinda Gates Foundation’s Financial Services for the Poor unit’s new strategic focus, which includes “concentrating on connecting poor people to digital payment platforms and enabling them to access savings, credit, and insurance services over those platforms.”

What might mobile money as a payments platform that explicitly works as an enabling and inclusive technology that works with cash actually look like? It all hinges on two key elements that help mobile money interface with cash, and help mobile money services interface with other services and applications: 1) the agent network, which we've called a social infrastructure in our earlier posts, and 2) application programming interfaces (APIs): "You often have to rely on others to perform functions that you may not be able or permitted to do by yourself, such as opening a bank safety deposit box. Similarly, virtually all software has to request other software to do some things for it. To accomplish this, the asking program uses a set of standardized requests, called application programming interfaces (API), that have been defined for the program being called upon. Almost every application depends on the APIs of the underlying operating system to perform such basic functions as accessing the file system. In essence, a program's API defines the proper way for a developer to request services from that program" (from Computer World). So whereas agents facilitate the interoperability of cash and mobile money by acting as "cash merchants," APIs facilitate the interoperability of a mobile money service with other mobile money services or with applications that are built upon the mobile money platform like savings and insurance practices built on M-PESA (see Kendall et al. or this earlier version). Both agents and APIs extend the potential of mobile money, the former by connecting mobile money up with local social networks and the latter by encouraging the uptake of the mobile money platform by programmers and developers interested in designing new applications for that platform. A role for regulation here? or a sort of Underwriters Laboratories??

Our take-home message is threefold: (1) The genie is already out of the bottle, and it’s not going back. We’ve got a telecommunications network that is already—with prepaid airtime—functioning as a payments network. (2) The potential here is for mobile money to be “more” than a card on the phone. The potential is for mobile money to be a financial service suite on the phone. And to serve financial inclusion goals. (3) But let’s remember Mas and Porteous’s point: the payments grid has to function—and be regulated—more like a utility. So that’s the challenge for the Credit Slips community: regulators, policy makers, academics and lawyers with decades’ expertise dealing with other payment networks: how do we do this? What are the lessons learned from other payment networks, other infrastructures: social, technological, legal and everything in-between? That's an open question and we look forward to continuing this conversation!

1. FHFA, Treasury, HUD Seek Input on Disposition of Real Estate Owned Properties
2. NORTH CAROLINA REAL ESTATE SPECULATOR PLEADS GUILTY TO BID RIGGING IN REAL ESTATE FORECLOSURE AUCTIONS
3. Another Kind of Foreclosure | Banks foreclose on rental property owners with excellent payment histories

1. Independent Foreclosure Review | Flaws Jeopardize New Attempt to Help Homeowners
2. Independent Foreclosure Review | OCC Says Independent Consultants Can’t Contact Borrowers
3. Federal Reserve’s Independent Foreclosure Review and HAMP Escalations Review

1. Federal Reserve Board announces a formal enforcement action against the Goldman Sachs Group, Inc. and Goldman Sachs Bank USA
2. Federal Reserve Releases Action Plans/Engagement Letters Per Consent Orders
3. Settlement | JPMorgan Says Foreclosure Accord With Federal Reserve, OCC May Come Today

1. Shadow Banking – Federal Reserve Bank of New York Staff Report no. 458 July 2010
2. Winner Takes All | Federal Reserve Bank Researchers Proposed Bailing out 99%, Action not taken
3. GAO Finds Serious Conflicts at the Fed | The Sanders Report on the GAO Audit on Major Conflicts of Interest at the Federal Reserve

1. Jack Lew | Obama’s Office of Management and Budget Pick Oversaw Citigroup Unit That Shorted Housing Market
2. GAO Finds Serious Conflicts at the Fed | The Sanders Report on the GAO Audit on Major Conflicts of Interest at the Federal Reserve
3. SEC Names Jane Norberg as Deputy Chief of Whistleblower Office

1. Jack Lew | Obama’s Office of Management and Budget Pick Oversaw Citigroup Unit That Shorted Housing Market
2. GAO Finds Serious Conflicts at the Fed | The Sanders Report on the GAO Audit on Major Conflicts of Interest at the Federal Reserve
3. SEC Names Jane Norberg as Deputy Chief of Whistleblower Office

1. Mortgage Bankers Association Letter to the Federal Reserve RE “Skin in the Game” and the Ability of Borrowers to Repay
2. Federal Reserve Governor Sarah Bloom Raskin Urges Penalties on Mortgage Servicers
3. OpESR | Anonymous Vs. The Federal Reserve June 14th – Ctrl+Alt+Bernanke

1. Federal Reserve Releases Action Plans/Engagement Letters Per Consent Orders
2. Federal Reserve issues enforcement actions related to deficient practices in residential mortgage loan servicing and foreclosure processing
3. Federal Reserve Board Releases Orders Related to the Previously Announced Monetary Sanctions Against Five Banking Organizations

1. Board of Governors of the Federal Reserve System | Moral Hazard – The Effect of TARP on Bank Risk-Taking
2. Moral Hazard | Early on, Florida Attorney General Pam Bondi Shows Ambition, but…
3. More Deadbeat Banks Missing TARP Dividend Payments

1. Board of Governors of the Federal Reserve System | Moral Hazard – The Effect of TARP on Bank Risk-Taking
2. Moral Hazard | Early on, Florida Attorney General Pam Bondi Shows Ambition, but…
3. More Deadbeat Banks Missing TARP Dividend Payments

1. Menendez (D-NJ), Waters (D-CA), Miller (D-NC), and Gutierrez (D-IL) Call on GAO to Report on Foreclosure Reviews RE Serious Concerns that Reviews May Not be Truly Independent
2. JPMorgan’s Independent Foreclosure Review Firm Deloitte & Touche LLP Recenly Sued for Failing to Detect Fraud that Led to more than $7 Billion in Losses
3. Independent Foreclosure Review | Adam Levitin – More Rot in the OCC Foreclosure Reviews

1. Federal Reserve Board Releases Orders Related to the Previously Announced Monetary Sanctions Against Five Banking Organizations
2. OCC Extends Deadline for Action Plans Under Foreclosure Practices Consent Order
3. Federal Reserve Board announces a formal enforcement action against the Goldman Sachs Group, Inc. and Goldman Sachs Bank USA

1. New Florida Attorney General Report on Fraudclosures Presented to the FL Senate Banking and Insurance Committee
2. GAO Finds Serious Conflicts at the Fed | The Sanders Report on the GAO Audit on Major Conflicts of Interest at the Federal Reserve
3. EXCLUSIVE | The Sophisticated and the Scammed – MBS Trusts Keeping Assets on the Books Long After they are Liquidated

1. Bank of America Finds Foreclosure Mistakes While Preparing Less than 1 Percent of Foreclosure Files
2. GAO Finds Serious Conflicts at the Fed | The Sanders Report on the GAO Audit on Major Conflicts of Interest at the Federal Reserve
3. Yet More Mortgage Settlement Lies: Release Looks Broad, Not Narrow; Other States Screwed to Bribe California to Join

1. Independent Foreclosure Review | OCC Says Independent Consultants Can’t Contact Borrowers
2. Federal Reserve’s Independent Foreclosure Review and HAMP Escalations Review
3. The OCC Independent Review | Fraudclosure Review Application Tips & Traps

1. Independent Foreclosure Review | OCC Says Independent Consultants Can’t Contact Borrowers
2. Federal Reserve’s Independent Foreclosure Review and HAMP Escalations Review
3. The OCC Independent Review | Fraudclosure Review Application Tips & Traps