News, Research & Insights for American Homeowners, Patriots & Constitutional Conservatives
If you want transparency ...
No one is really surprised by this, right? John McCain blasted the Supreme Court in January for gutting his signature McCain-Feingold law by, er, not allowing the federal government to criminalize political speech. At the time, he warned that super-PACs would “destroy the political process.” Now McCain wants to rein in the super-PACs, and he’s [...]
If you want transparency ...
No one is really surprised by this, right? John McCain blasted the Supreme Court in January for gutting his signature McCain-Feingold law by, er, not allowing the federal government to criminalize political speech. At the time, he warned that super-PACs would “destroy the political process.” Now McCain wants to rein in the super-PACs, and he’s [...]
The Fed released some data on debit interchange fees since the Durbin Amendment went into effect (here in spreadsheet and here as a memo with more data). It's all still very early numbers, and things may well change. But so far a few noteworthy things have caught my eye:
(1) There is two-tier interchange pricing, just as I and other supporters of Durbin predicted. Big banks (>$10B in assets) have one pricing scheme and small banks, which are exempt from Durbin's "reasonable and proportionate" requirement have another. Many Durbin opponents said that there wouldn't be two-tier pricing and that Durbin would spell the ruin of small banks. So far that hasn't happened. This won't fix our too-big-to-fail problem, but it's a small move in that direction.
(2) The small banks are getting a leg up on the big guys in the two-tier system. Small banks are making on average 19 cents or 50bps more on every transaction than the big boys. That breaks down to 31 cents advantage of signature and 8 cents on PIN (where the pricing was lower to begin with, making less room for differentiation).
(3) Interchange fees for small banks haven't moved much. It's possible to have two-tier pricing with small banks still losing revenue. That doesn't seem to have happened. (It's also possible to have two-tier pricing with interchange fees continuing to rise for small banks...)
(4) The small banks' debit card transaction market share grew slightly. It's not clear to me that this is a real trend, but it's possible that this is a side-effect of the big banks like BoA clumsily trying to recapture reduced debit interchange revenue with direct consumer fees. It seems that some consumers don't take well to hidden fees being replaced with direct fees. It's still not clear how many accounts were really moved to small banks/CUs in response to BoA and the like, but that could explain the growth in debit card market share for small banks. In any case, merchants aren't steering away from small banks as we were told they might do. (It was never clear how they would steer anyhow).
(6) There may be other, harder to measure benefits for small banks from Durbin. To the extent that it makes their deposit account/debit product more competitive, this could have spillover benefits for their other products. The deposit account (monetizable via debit or check) is the gateway relationship. It enables the cross-selling of other products (loans, investments, insurance). So the benefits to small banks may be more than just on the debit revenue side.
(5) The big issuers are paying lower network fees (4 cents lower for sig, 2 cents lower for PIN), which means that small issuers are really getting a 23 cent/transaction advantage of signature and 6 cents/transaction advantage on PIN. It's not clear, however, what the network breakdown of small issuer transaction is.
Again, it's still early in the game. There's still the merchants' litigation challenge to the Fed's Durbin Amendment rulemaking, and we could well see a bunch of market moves. Visa seems to be trying to go back to tying credit and debit products via its network fee, and there's always the possibility of either some innovation (think mobile), a new settlement network (PayPal?), or a new entrant buying an existing player and shaking things up (Google or Apple buying MC?).
A final thought. The more distance we get from Durbin, the more I like the amendment. It's public utility regulation: rate regulation (section 920(a)) and open access (section 920(b)). That's not a totally new move in bank regulation (think Reg Q), but it really encourages thinking of at least some banking functions as being public utility functions. There might be something to that.
Democrats distance themselves from the president's signature accomplishment.
Democratic Senate candidate Elizabeth Warren is one of the last people you’d expect to write an op-ed that advocates for a partial repeal of Obamacare — but she’s done just that. As The Heritage Foundation’s Mike Brownfield reports, Warren opposes the medical device tax embedded in Obamacare on the basis that it will cripple medical [...]
Regrets.
Amazing. For better or worse, this is O’s signature “achievement.” If he’d dropped the bill after Scott Brown won the Massachusetts special election, what would be left of his argument to liberals to turn out in force for him in November? Yeah, I know, they’re not big fans of ObamaCare either — they wanted a [...]
A few weeks ago I wrote about the importance of giving priority to an Article 9 financing statement only from the date on which the debtor actually authorizes the filing, and a proposed official comment contrary to this position. My colleague Lissa Broome has just posted on SSRN an article she has written about another dimension of the issue: when secured parties file financing statements with an indication of collateral that is far broader than what the debtor authorized in the security agreement. She discusses recent cases that do not deter this activity as well as potential implications, including the chilling effect on future lending transactions.
When the debtor's signature was eliminated as a requirement for a valid financing statement in Revised Article 9, the drafters justified the change by technology: medium neutrality and facilitating paperless filing. Functionally, though, the implications go far beyond technology when you combine this change with the opportunity to file all-asset financing statements AND the broadest possible reading of the first to file or perfect rule discussed a few weeks ago.
Only 25% want it kept as is.
ABC splits the lead for its report on the results of their joint poll with the Washington Post on ObamaCare — the one that had a sample skew of D+11, and which should have resulted in more favorable results for Barack Obama and his signature legislative accomplishment. Despite the skew, ObamaCare is as unpopular as [...]
Offending people on the Internet to be illegal in Arizona?
Get your comments in while you can because half of them will probably be illegal in Arizona if Jan Brewer signs this bill. Arizona House Bill 2549, which is now on Gov. Jan Brewer’s desk for signature, was created to counter bullying and stalking. The law would make it a crime to use any electronic [...]
... just not Democrats.
On Wednesday, The Hill reported that Barack Obama wouldn’t do anything to celebrate the two-year anniversary of ObamaCare, his signature legislative achievement. That might have to do with the fact that a majority of voters wants it repealed, and even a plurality of Democrats (48%) want it rolled back in whole or in part. Still, [...]
No public defense, either.
In just two days, Barack Obama will celebrate the two-year anniversary of his signature legislative achievement as President — ObamaCare. Or rather, he won’t celebrate it. In fact, according to The Hill, the White House won’t even bother defending the bill against its critics in the days leading up to the Supreme Court review of [...]
ObamaCare an albatross.
What happens when an incumbent running for re-election has a signature achievement in his first term that voters strongly dislike? Barack Obama has that problem with ObamaCare among swing-state voters, and finds himself behind both of the leading Republicans in the new USA Today poll of these states: Though the law has avid supporters, especially [...]
Next up: Referendum.
It passed the House last week and the Senate tonight, and the governor’s signature is a fait accompli: The final vote by the state Senate ended a yearlong drama in Annapolis over the legislation, and marked the first time an East Coast state south of the Mason-Dixon line has supported gay nuptials… Despite one of [...]
"I can be impartial."
While Rick Santorum targets Michigan in a big way, a minor controversy brews in Indiana, where, yesterday, four voters filed official challenges to his candidacy, claiming that he fell eight signatures short in Marion County of the 500-signature-per-congressional-district requirement to appear on the ballot. An election commission will decide whether Santorum’s signatures are adequate — [...]
Third front for unions in 2012?
Indiana became the 23rd state to pass right-to-work laws that end the practice of closed shops and forced dues payments. Mitch Daniels’ signature also makes Indiana the first Rust Belt state, long the locus of union political power, to adopt such laws. As one might imagine, that decision didn’t come without a protest from the [...]
And folks aren't happy about it.
President Barack Obama is still in Hawaii on vacation, but, yesterday, he managed to sign the $662-billion National Defense Authorization Act — a bill that has generated a fair share of controversy in the Capitol city. Even as he signed the bill, Obama added to the drama; he included a statement with his signature to [...]
Point for the personally responsible.
Score one for freedom. Transportation Secretary Ray LaHood yesterday checked the zeal of the National Transportation Safety Board, which last week called for a nationwide ban on hands-free cell phone devices for drivers. LaHood, who has made distracted driving his signature safety issue, said the focus should be on texting and hand-held cell calls, not [...]
Meet our homeowner… Ira Neighbors. This time around, he’s a university professor with a PhD in Social Work…. So, I suppose that’s technically Dr. Ira Neighbors.
He was on his second trial modification, the last time his trial modification wasn’t converted to a permanent modification for some unknown reason, but Bank of America is here to help homeowners and they were nice enough to let him reapply… and so he did.
This time, however, he decided to retain a lawyer to help ensure that his trial modification would become a permanent one. And wouldn’t you know it, the lawyer succeeded and Bank of America issued the documents for the professor’s permanent modification. So, yay!
Unfortunately, Professor Neighbors happened to be in Louisiana at the time lecturing at a university, but once again Bank of America was gracious enough to forward the documents to his address in Louisiana for his signature. It had taken two years and two trial modifications for him to arrive at this monumental moment, and now he had ten days to sign and return the documents, along with certified funds in the amount requested. Well, Bank of America doesn’t like to be kept waiting, and why should they?
A few days later, however, the documents arrived with instructions stating that his signature had to be notarized by a California notary. So, the professor immediately called the “Hope Line” at Bank of America to ask whether he should fly back to sign the documents, but the bank said, given the circumstances, with him being in Louisiana and all, not to worry about notarizing his signature, but to simply send the signed documents by the date shown with the certified funds enclosed.
And so he did… on time and as agreed. He wasn’t going to take any chances this second time out, and we can all imagine how relieved he was that the whole ordeal was finally over.
Imagine his surprise when the next letter he received explained that his package had been deemed incomplete… his permanent loan modification was now denied and Bank of America would be accelerating the foreclosure of his home.
His lawyer contacted Bank of America immediately requesting that the professor’s case be appealed given the circumstances. Bank of America, being the reasonable and caring financial institution that they so clearly are, reviewed the case and said okay… as long as he would have his signature on the documents notarized by a California notary they would honor the permanent loan modification after all.
Yes, the last time he called, they had told him not to worry about the California notarization, but so what… if that’s what they wanted then that’s what Dr. Neighbors would deliver.
(It’s worth remembering that at this point, Bank of America already had Ira’s certified funds. He had included a cashier’s check with his documents when sending in the set with his un-notarized signature, as Bank of America said was fine.)
So, without any hesitation our intrepid professor jumps on a plane and flies home to California to have his signature notarized by a California notary. Apparently, the notaries in Louisiana are seriously sub-standard and perceived to be unable to notarize someone’s signature. This must be a terrible burden on the people of that state, and someone should look into it, in my humble opinion.
Okay… so with his signature on the permanent modification documents now legally notarized by a California notary, he sent everything to Bank of America without delay. Whew… it was finally over… wasn’t it?
Within a week Bank of America sent him another letter notifying him that they were… wait for it… denying his appeal, and no permanent modification would be issued.
Bank of America was saying that although the first set of signed documents and the certified funds had arrived on time, the second set of California notarized signed documents had arrived six days after the original deadline, and now Fannie Mae was supposedly refusing to reinstate the professor’s permanent loan modification. Don’t you hate it when that happens?
(Fannie Mae, by the way, has received a little more than $120 billion from American taxpayers to-date and the government estimates that number will be $220 billion by 2014. So… good to know, I suppose.)
However, Bank of America did say in their letter that the professor was welcome to reapply once again for a loan modification… because Bank of America is here to help homeowners, remember?
The professor’s lawyer tells me that he was told by a Bank of America manager, that the bank has recently laid off a good portion of the loss mitigation and customer service staff, as they are changing over to the single point of contact system required by the OCC’s consent orders that were issued last April. And apparently, loan modifications have recently ground to a halt at Bank of America as a result of the change. (Another lawyer told me a similar story yesterday as well.)
I can’t help but wonder, however, why it’s not too much effort to foreclose on a home, evict a family, probably end up taking it back as an REO, bring it up to HUD standards and then maintain it perhaps for years while it sits vacant…
But… it’s far too much effort to approve a permanent loan modification that has already been approved by the bank… because the second set of documents arrived six days late… even though it was the bank that said to send in the first set without the signature being notarized, and considering that the homeowner ended up flying across the country to have his signature notarized by a California notary… and even though the certified funds HAD ARRIVED with the first set of documents.
Oh, never mind… even I can’t figure out what I’m trying to say anymore. If this mess ever does end, what would you like to bet that writing about it has caused brain damage and I spend the remainder of my years eating Jello on my rice, drinking from a sippy cup, and babbling incoherently about how the bank lost my documents?
And by the way, I called around town to ask others with experience modifying loans and everyone told me that most loan modification documents don’t require a notarized signature, California or otherwise… which does make a great deal of sense, by the way, if you think about it. I mean, where would fraud enter the picture?
Under what circumstances would someone sign someone else’s loan modification documents? It’s not like it’s a new loan. And the bank just received the guy’s tax returns, paycheck stubs, and everything else they could ask for… what’s the problem?
You would think that even Bank of America would tire of playing this game by now.
And what the heck is wrong with the notaries in Louisiana anyway? Can’t they ask someone for their driver’s license and then notarize their signature? What can a notary do, if he or she can’t do that?
MEMO TO BANK OF AMERICA… Why do you do these things to me? I was just sitting here minding my own business, perfectly content to write about Chase or Wells or anything else for that matter… but no, you can’t even make it a month without doing something totally unreasonable and frankly insane. It’s not like I want to keep picking on you… I don’t. What’s the deal, Mr. Moynihan? Are you trying to maintain your position as the poster child for “reputational risk?”
I also want to mention that all this trashing of Bank of America is very upsetting to Mr. Moynihan. In case you haven’t already seen it, check this out from Bloomberg last week:
Oct. 26 (Bloomberg) — Bank of America Corp. Chief Executive Officer Brian T. Moynihan said he’s “incensed” by public criticism of his company and is pushing back by reminding local leaders of its contributions to their economies.
I, like you, get a little incensed when you think about how much good all of you do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well,” Moynihan said during the Oct. 18 gathering. To the bank’s critics, he said, “You ought to think a little about that before you start yelling at us.
But, Brian… it’s not just me… also from the Bloombgerg article:
Bank of America ranked lowest in a 24-bank survey of small business customer satisfaction from J.D. Power and Associates this month. Wells Fargo & Co., Citigroup Inc. and JPMorgan Chase & Co. also were in the bottom five. Earlier this year, Bank of America was named the country’s second-worst company by Consumerist.com after BP Plc, the firm blamed for the worst U.S. offshore oil spill.
Okay, DOERS… are you listening to this? Could we please explain to Mr. Moynihan that we would all very much appreciate it if he could just make a quick call and save this nice professor’s home before Thanksgiving?
Please? It’s the end of the guy’s second year and that should be enough screwing around, don’t you think? The professor’s name is Ira Neighbors of Southern California, and of course below is the contact information for BofA’s CEO, Brian Moynihan… but maybe you’ve got him on speed dial by now.
He’s counting on us, you know. Let’s not let him down, okay? You guys are getting famous for this sort of thing.
Mandelman out.
Matthew Task, Executive Relations, Office of the CEO (At BofA)
Phone: 813-805-4873
Still a key campaign issue.
Far from becoming more popular as it begins to be implemented, Obama’s signature legislative achievement draws ever lower levels of approval and support as more and more Americans “find out what’s in it.” According to a tracking poll by the nonpartisan Kaiser Family Foundation, just 34 percent of Americans view the law favorably — the [...]
"You are the only folks keeping the barbarians at the gate."
Jimmy Hoffa’s canine remarks about Tea Party SOBs rightly received plenty of media attention — especially after Jake Tapper’s signature drilling of Jay Carney. What is less widely known is that Gaffe-Master-in-Chief and Alleged-Tea-Party-Terrorists-Toastmaster Joe Biden also made a newsworthy remark in his keynote address at organized labor’s traditional Labor Day picnic at Cincinnati’s Coney Island [...]
Decisions.
“The video ends with her signature mama grizzly giving a roar and a message: ‘Thank you Iowa! See you again September 3rd.’ Palin heads back to the first caucus state that day to headline a tea party rally. “Although there has been speculation that Palin may make her announcement that day, sources close to Palin [...]
Another Bombshell Deposition from the Foreclosure Warriors at The Forrest Law Firm. Today’s deposition features the infamous Bryan Bly who we’ve all learned in recent months has been responsible for executing tens of thousands of documents that have been submitted in foreclosure cases across this country. Listen carefully to the whole video. It’s well worth your time and effort.
The deposition begins with Bryan Bly telling us that his title is “Signing IC”- which I will take can be interpreted as (Signing Everything I See). Here are the Bryan Bly depositions…we all (and I mean press, attorneys, judges, advocates, all Americans) owe a debt of gratitude to the Forrest Law Firm for getting this information out there. Please visit their website and support the work they are doing.
In this war, information is our most effective weapon. The banks, the institutions and law firms are not going to like these depositions being made public, but we need to all cherish and respect that in this country we all have an absolute right to view and supervise what is happening in every single courtroom and case. We can all no longer sit back passively and watch what is happening in our courtrooms…we all need to actively participate in what is occurring in these cases because it dramatically impacts us all.
6:45 HOLY SMOKES DID HE JUST ANSWER THE QUESTION, “DO YOU KNOW WHAT AN ASSIGNMENT OF MORTGAGE IS?” WITH… I DON’T KNOW?
7:00 Executes 5,000 documents per day, more than 50,000 total. Do you take steps to verify the information? No, sign and stamp the notary stamp.
9:22 His signature is inserted into documents sent for recording and he has no idea what those documents are and he never reviews those documents. That entire process takes place outside his presence and knowledge.
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3:18- Do you know what “good and valuable consideration means? I don’t usually read the docs when I sign. I just look for my name and sign.
Is your signature put electronically into a doc? Don’t know. Has you name been scanned and put into the system? Yes. Do you know what it is used for? I don’t ask.
Like I say I never read those I just go ahead and sign them.
I just see my name and I sign.
The last and frankly the best deposition from the Foreclosure Warriors at The Forrest Law Firm these guys have blown the lid off the whole document mill process and you really owe it to your self to listen to all these depositions in their entirety.
The big question we all need to be asking after watching all these deposition is,
“If all these Plaintiffs and lenders and mortgage companies really did own all these mortgages prior to when they started this Foreclosure Holocaust, why then do we have all these robo signer activities?”
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