You're now on the archive server. Commenting has been disabled.
FDIC Responds To IndyMac/OneWest Video Alleging Sheila Bair Transferred Billions In Taxpayer Funds To Paulson & Co., And Others
A few days ago we posted "The Great Highway Robbery Continues: How the FDIC is Legally Transferring Billions in Taxpayer Money to Hedge Funds" which presented a clip by Think Big Work Small, highlighting what was seemingly a grand scheme to defraud taxpayers with the FDIC's complicity. Today, the FDIC strikes back, issuing a Press Release claiming the video contains "blatantly false claims", "perpetrates other falsehoods" and has "no credibility." The counterargument which is supposed to render all allegations of impropriety false: "OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets" and that "in order to be paid through loss share, OneWest must have adhered to HAMP." Unfortunately, reading between the lines of the response indicates that not only are the falsehoods actually truehoods, but the video is still, sorry Shila, quite credible.
So to make sure we get this straight. OneWest could have an accrued loss balance of $2.499 billion as of today, and just one more loss will be enough to force the FDIC to make a lump sum payment instead of linear payments? And somehow we are supposed to be comforted by this? A cursory public filing search for OneWest bank reveals no such organization. Maybe while it is denying the validity of the video the FDIC can advise taxpayers where they can get some information on what the correct reserve or loss accrual at OneWest is? Courtesy of the most opaque accounting rules in the history of America, OneWest could have already gotten way beyond the $2.5 billion threshold and is simply waiting for the proper time to spring this to the unwitting FDIC.
And as for adhering to HAMP? Would that be the same program that will ultimately benefit less than 1% of US first mortgages due to ridiculous constrains that make the vast majority of participants ineligible? Aside from scoring one for the stupidity of the administration, does the FDIC actually believe that Americans will find this to be a relevant gating issue?
Sorry FDIC, but not only did your press release not refute the video's claims in the least, but you just dug yourself an even deeper grave as every aspiring blogger and investigative reporter will now do everything in their power to find comparable examples of blatant "slap in the face" fraud expecting you to retort to any and all allegations, ensuring 15 minutes of fame for all implicated.
From the FDIC press release:
FDIC Provides Additional Information on its Loss Share Agreement With OneWest Bank
February 12, 2010
FDIC Director of Public Affairs Andrew Gray said, "It is unfortunate but necessary to respond to blatantly false claims in a web video that is being circulated about the loss-sharing agreement between the FDIC and OneWest Bank. Here are the facts: OneWest has not been paid one penny by the FDIC in loss-share claims. The loss-share agreement is limited to 7% of the total assets that OneWest services, and OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets. In order to be paid through loss share, OneWest must have adhered to the Home Affordable Modification Program (HAMP).
The producers of this video perpetuate other falsehoods. The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed in the video.
This video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility to be factually correct and transparent. The FDIC made available a fact sheet on the day that the sale of IndyMac was announced that details the terms of the contract. It's too bad that the creators of this video opted to premise it on falsehoods."
Those who may have missed the full video, here it is again.
»
- 19503 reads
- Printer-friendly version
- Send to friend
Similar Articles You Might Enjoy:
- The Great Highway Robbery Continues: How The FDIC Is Legally Transferring Billions In Taxpayer Money To Hedge Funds
- FDIC's Has No Money To Nationalize Others' Dirty Underwear
- PE Bidders Not Allowed For Guaranty Financial Ahead Of Monday Deadline
- FDIC Discloses Deposit Insurance Fund Is Now Negative
- May Day Friday Bank Failure Count Up
Non-denial denials are always fun to parse. He-said-she-said, and it's $billions.
They are just buying time now. Forget the shredding, just set a match the whole fucking mess. Let it burn, nobody is going to give a shit. Then get your ass to the roof because the chopper is spinning up and you do not want to be the only loser left behind to face a firing squad.
Ahh. One can only dream of freedom. I do like your visionary optimism that all of mankind, at least in the UBA (United Bankers of Amerika) can live unemcumbered by the political-economic walls of the The Great Feudal Manor.
However, unlike you, I do not have the luxury of waxing so poetically of this "freedom thingy".
I'm too busy figuring out how to re-fi my citizenship. I for one sure as hell don't want to get repo'ed for not "paying my fair share" so that the Treasury can transfer my adjustable-rate, interest-only, citizenship bond to the FDIC, which then transfers it to OneWest, which then transfers it to Goldman's crew, which then hands it out to paupers like that #$%sucker Soros and company.
I don't have that luxury. Now if you'll excuse me, I have to go to my 3rd job.
The FDIC's Mission is "to maintain stability and public confidence in the nation's financial system."
Mission failed. Why are failures still running these agencies?
The whole of the federal regulatory scheme is just a way for those with their hands on the levers to transfer capital from the majority to the favored few and to protect vested interests from the challenges of the free market.
If nothing else, I suppose we can be thankful the means are becoming more and more obvious these days.
In all honesty, I will take the first short from Frank and Brian at TBWS as being closer to the target (read truth) than any bull sheet coming from the spin-meisters at the FDIC.
Like I state on my page, WallStOnion.blogspot.com
If it is piece of shit the Tresuary gets it.
If it has value the Fed gets it.
The FDIC is a chop shop for the Fed.
Good Day
oh... oh, Sheila.
Dont forget the third verse:
Oh, sugar where you been
Hangin' out with your male friends
Listen, somebody's going to hurt you
The way you love, to keep hurting me, we say
hahaha.... Oh Sheila by Ready for the World (ain't that fitting?)
Like I always say what's good for the gaze
Is always good for the camera
oh Sheila, oh, oh
2-Oh baby love me right
Let me love you till I get it right, hmm
Can't you let the others be
'Cause with you is where I got to be
Oh, sugar where you been
Hangin' out with your male friends
Listen, somebody's going to hurt you
The way you love, to keep hurting me, we say
1-Oh oh Sheila let me love you
Till the morning comes
Oh oh Sheila you know I want
To be the only one
3-Oh baby, understand that I want
To be the only man
But it seems you're screaming too hard
Now think yourself to have an only friend
Oh baby, it's plain to see
That you're qualified to fill my needs
4-I think you threw an oath on me
Honey, baby, just you wait and see
So may be Soros and Paulson turned to charity!!Or they are stupid business people. Any loss share gimmick by a private entity is,gimick. Back in the eighties and early nineties,the process was much mor transparent. Insolvent banks were ciezed. Guaranteed deposits were shifted to other banks,and assets were sold throught auctions. I don't recall "loss sharing",or "public privte partnership" gimicks..
Sheila, the banksta's beotch. Slap her fannie and ride that ho.
CR says "The FDIC is absolutely correct."
http://www.calculatedriskblog.com/2010/02/fdic-responds-to-blatantly-fal...
I think CR is another BS!
Take a look at this: http://iamfacingforeclosure.com/blog/2009/12/01/anatomy-of-a-government-abetteded-fraud-why-indymaconewest-always-forecloses/
it's a he-said/she-said, and only 5 people probably know the real truth...
the fact that this video went so viral and was taken seriously says volumes in itself.
calc-risk is one of the most balanced sites out there, so as an opinion, i'll still take his over most of the others.
I still don't trust anything Federal these days...
trust is earned.
Calculated Risk is a great site, but the gubbermint numbers are what get reported. I'd prefer to see what's under the hood, so to speak, and ZeroHedge is much better at that sort of thing. Also, CR just repeated what the FDIC said and didn't add any new info. Maybe someone is 'leaning' on someone...
That guy is a fdic apologist
The $2.5B loss share threshold actually makes them MORE likely to rack up losses so that they do get paid, right?
Thats the result (purpose?) of having an FDIC to begin with.
FDIC is the best example of Moral Hazard in Frac Res Banking.
+1
FDIC just creates the illusion of protection. If it wasn't there people would be far more cautious about where they kept their money. The FDIC is a great idea but it's nothing more than a false sense of security that excuses people for not paying attention and doing due diligence.
It's also another element of this ginormous government that could go away.
I'm so pissed at the Fed for suppressing rates I think I'll pull my money just so the bank will (might) have to contract its loan book.
The fdic is more responsible for the misallocation of capital in this country than every single other government entity combined. By allowing thousands of banks to raise cheap capital at a price that does not differentiate between bank risk levels, it encourages dice rolling behavior. Allowing, no, encouraging private equity to participate in this scam is insane.
Nice logic!
I typically go to Vegas... and lose all my money... so that I can file for bankruptcy protection.
Plus, I can write it off on my taxes.
-BBH
Isn;t she an ally?
Sheila "The FDIC can never ever run out of money" Bair?
don't buy into this dweeb, someone needs to show him the door. he's lurking me. (tophat)
You can randomly point to any ABC Agency of the Federal Government and be correct in an assumption of fraud...This whole system is one creeping coup, an insurrection against constitution and law from beginning to end..
+1 Creeping Coup
the "loss-sharing" agreement looks more like a guaranteed profit agreement. I really don't think Paulson, Soros, and Munchin bought IndyMac with the intention of taking on the risk of those bullshit mortgages. They a little too smart for that. Anyone have a link to the "agreement"?
This is why bobbleheads are in charge of things.
sheila,( the no depositor, has ever lost a penny, and never will)Bair?
is this the HOPE we are looking for?
soros is so thick in the exploitation of south america. Mish's blog and his followers have woken my arse up.
you think the FDIC is bad well throw in the IOC international olympic committee, they are worst and more corrupt than the IMF.
Tyler your angry rant doesn't prove anything more than the fact that you lack sufficient information to really nail these people. Please keep digging.
Is that loss a true accounting loss or an inflated pull a # out of their ARSE loss?
Well glad we got that sorted out. It's always nice to have high level authority setting us straight when we get things wrong.
http://www.youtube.com/watch?v=6bMM61Y5CEU
Here are the IndyMac details from the FDIC website. Agreements are in section XII.
http://www.fdic.gov/bank/individual/failed/IndyMac.html
I posted this over on Calculated Risk, I know this type of deal well:
http://www.fdic.gov/about/freedom/IndyMacSharedLossAgrmt.pdf
First loss amount: 20% of UPB
Threshold = 30% of UPB
OneWest Pays 100% of the first 20%, 20% of the next 10%, then 5% of the rest.
Ten Year deal.
But from what I can tell, they don't share in the income. That is, any interest on the loans goes to OneWest.
Knowing IndyMac, these loans are probably Alt A and/or HELOCs, probably paying 8% or so.
Even with runoff, you will probably get 4.5 years of income, or 36% of the original UPB over the life of the deal.
In exchange, assuming say 50% loss, you take 20% + 2% + 2.5% = 24.5% loss.
It is really hard for OneWest to lose money on this deal, this is a classic XOL deal, the only way they can really lose if they get losses right to the threshold and very fast runoff.
For what it is worth, I have consistently found that ghostface is most knowledgeable in the mortage security/finance sector and I place alot of trust in his/her opinions in regards this subject matter.
Thank you for commenting on this and related items ghost; your input is valuable.
I will second that sentiment. GFI brings light with his heat.
If you read the Agreement sections entitled "stated threshold"(definition) and section 2.1 "shared loss arrangement", I think you will find that OneWest gets reimbursed for 80% of the first 30% of the loss, however if the loss exceeds 30%, which is the "threshold", then OneWest gets reimbursed 95% of the loss (from FDIC). So, OneWest does much better when the loss is greater, and exceeds 30%. Of course the agreement says that OneWest must mitigate the loss, however, there's not much they can do when the economy and the real estate market are in serious decline, etc. In a declining market OneWest has an incentive not to restructure the loans and simply wait for a further collapse because they are guaranteed 95% of any losses will be paid by FDIC, as long as they met the threshold of 30% in losses. So, it seems like OneWest is guaranteed about 95% of the unpaid principal and interest of the mortgage -- which they bought at a discount.
Yeah, but the First Loss Amount, defined on page 2, has to be breached first, that is the 20% (or .2 * the upb as the agreement reads), then the 80% kicks in, then the 95%, but like I said, they seem to only share in losses, not income, so as long as they get enough life out of the loans, OneWest can't lose, and they can always hedge the prepay risk.
But good point about buying at a discount - what did they pay? Note the loss provisions are based on UPB, not the purchase price of the portfolio, so they are probably in a leveraged position regarding this portfolio in that they are facing economics of profit and loss based on a UPB that is probably higher than the purchase price.
Also note that they can actually SELL this portfolio for a loss, and the loss share provisions still apply. So from what I can tell, there is nothing to prevent them from running the portfolio for 5 years, stripping all the good interest out of it, then selling what is left at a loss and locking in a profit. I could be wrong on that, though, i didn't look at all the details.
Whatever the case, the FDIC sure struck a sweetheart deal for these guys. Wish I could have got it, there is almost no downside that you can't hedge away cheaply.
Oh, as for mitigating losses, yeah, what are they going to do that every other servicers has tried and failed at? You are correct in that once the pool hits 19.9999% loss, as a servicer, there is little incentive to work your ass off to avoid a loss.
@ghost
Thx for the analysis. It is all very sad for us taxpayers and lesser mortals.
Would someone explain to me how this trasnaction is different from the other FDIC-assisted transactions. Take, for example, FCNCA who has done three transactions since mid-2009.
While sad for the "taxpayer" (although not until the taxpayer bails out the FDIC), I am not quite sure how a financial institution which, has regulated capital levels they must remain at or above, is supposed to purchase assets if not at a discount. If they paid full price for assets and accepted the liabilities they would stretch their capital, potentially to an "unsafe" level.
My only point is that certain things the FDIC or government does that seem constructed to simply "rip you off", may actually have rationale.
Right... and fannie and freddie are sound [cut to music]
I'm not sure that their loss has to be more than 2.5 billion to get the payment from FDIC. I think 2.5 billion is just statement what first loss can be on the portfolio they purchased so it looks like 12.5 billion, this 12.5 billion constitutes 7% of all assets of Indy sold. That would give us total of around 176 billions of Indy loans sold. Maybe I'm wrong, judge yourself, below statement of FDIC:
"OneWest has assumed a first loss position on a portfolio of qualifying loans where they take the first 20% of losses before any loss share payments are made. This is a first loss position of over $2.5 billion."
that 7% number is pure bullshit, well, not actually bullshit, but note what it says, "7% of all assets SERVICED. Like any major mortgage player, Indy serviced loans that is securitized through Fannie/Freddie/Ginnie/Private Label. the fact that the owned pool is 7% of their entire servicing portfolio is irrelevant.
But using the 2.5/.2 = 12.5B portfolio, that is correct, but see my post below, they are basically capped more or less at 20% loss for a portfolio that is probably generating 8% in interest a year, and from what i can tell they ain't sharing in that interest payment. So over the life of the portfolio they are going to earn more interest than they could pay out in loss, the only losing scenario is if the loans run off fast, so they are taking prepayment risk, which they can easily hedge, not credit risk.
I understand what you say about interest, but still there is no clarification on price paid (original loan value or some other calculated value) and how first loss is calculated - this is one of the points mentioned in video.
Section 2.02 and Schedule 2.02 of the loan sale agreement indicate that the loans were bought for between 70% and 37.75% of their unpaid principal balance, depending on the type of loan. Exhibit 2c of the share loss agreement starts out the calculation of loss sharing by referring to the loan's unpaid principal balance (not purchase price).
Hmmm, pay 60cents on the dollar and get losses capped at 20 cents on the dollar and get an interest free loan to boot so your funding costs as minimal, seems pretty hard to lose money on this deal, this was nothing but a way for the fdic to top up their fund in exchange for taking losses later, pretty much like the finite reinsurance deals that aig used to do, shifting losses from one period to another, some blogs should be embarrassed to defend the fdic for this sort of thing, it is organized crime, nothing more.
First loss is on page 2 of the agreement.
I do think the video is wrong, in that this agreement applies to the pool, not on a loan by loan basis, though some of the exhibits in the agreement are very misleading on that point.
Either way, it is a sweetheart deal for the purchaser.
Indymac's loans and assets were valued at $21 Billion and OneWest paid $16 Billion for them. The FDIC lent OneWest $9 Billion to help finance the deal. There's nothing in the loss-share agreement that disproves the video. The video is correct. After the deal was done Mnuchin said publicly that he wanted to buy other banks. Do you think he goes around doing deals to simply lose "the first 20%"? It looks like the FDIC basically gave away $5 Billion on this deal (plus losses). If I recall, the hedge fund (OneWest) only put up $1.5 billion of its own money. So they were basically guaranteed to triple their money.
> A cursory public filing search for OneWest bank reveals
> no such organization.
They appear to be Doing Business As;
http://rrcc.lacounty.gov/CLERK/FBN_Search.cfm
there are two filings on 3/16/09
- ONEWEST BANK
- ONEWEST PROPERTY MANAGEMENT
The name filed with the county will likely show "OneWest Bank Group, LLC", as described here:
http://www.thetruthaboutmortgage.com/indymac-federal-becomes-onewest-ban...
however, the California Secretary of State's website doesn't show it: http://kepler.sos.ca.gov/cbs.aspx
Very curious as to why ...
Ok, Now what? Is there a conclusion to this rant? All the corruption i hear are like unfinished chapters in a book. Whats missing is whats going to be done about it. Nothing is being done. The conclusion? The middle class is being robbed in the open to keep the rich wealthy. All this bullshit that ZH puts out is just noise unless Armageddon is looming. I do love your website. Please give me a time frame when the financial Appocalypse is going to occur to hold my interest, Otherwise these are nothing but rants... Case in point..What happened to Cuomo and BOA? The story just disappeared like a fucking Fart in the wind. I need stories of financial pain amonst the Banksters. Im counting on you.
kinda like asking the weatherman to report on sunny days in the middle of a hurricane.
who fauxbel prize winner obama can foresee what's coming in the next 20yrs. like punxsutawney phil.
"Please give me a time frame...."
You are one breath from death, that's your time frame.
The outlook for the next generation (~25 years) looks like very bleak indeed. Whatever will be will be. This year, next year, a decade from now, whatever.
What do I know? I'm just a spirit in a body. I'm just here for the show, and trying to remember that one thing I was supposed to remember.
Perhaps you prefer...? Yea though I walk through the valley of the shadow of death, I shall fear no evil.
Meh. Regardless.
None of our bodies make it out alive. Quit worrying about time. Do what you can do and do it well, treat people like you want to be treated, and enjoy the ride; remember to buckle up it's going to be a bumpy one.
Thanks for putting it all in perspective...and for the reminder.
Delusional optimist!
Of course, you're right. There aren't going to be any prosecutions because the Government is pocketed by banks and corporations. Most Americans aren't even aware, and if you check-out the protests at the G-20 in Pittsburgh, you won't find any of it on MSM. Americans to date are zombies and zombies don't restore the natural manure of a Constitutional Republic.
"Give me control over a nations currency, and I care not who makes its laws" -- Baron M.A. Rothschild, same guy who helped create the central banking system used today.
@plocequ1
Be the solution, not the bitch.
Just venting.. Im sure i am not alone.. Cheers!!
fyi
"NEW YORK (Standard & Poor's) Feb. 12, 2010--Standard & Poor's Ratings Services today lowered its ratings on 84 classes from 27 residential mortgage-backed securities (RMBS) transactions backed by U.S. prime jumbo mortgage loan collateral issued in 2003 and 2004. In addition, we affirmed our ratings on 521 classes from 26 of these transactions and nine additional transactions and removed three of the ratings from CreditWatch with negative implications (see list).
The downgrades reflect our opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given our current projected losses due to increased delinquencies. We lowered our ratings on two of the classes to 'D' because they experienced principal write-downs.
"The FDIC has not requested to borrow money from the Treasury Department" BULLSH#T!!! The Senate Banking Committee chairman moves to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department. http://www.foxnews.com/politics/2009/03/05/senate-moves-loan-fdic-billion/
Just because it's available doesn't mean you have tapped it (applies to dating, as well).
http://seattletimes.nwsource.com/html/businesstechnology/2008585641_indy... (posted January 3, 2009) by associated press writer, alan zibel.
FDIC gathers investors to take over failed lender IndyMac
A seven-member group of investors has agreed to buy the remnants of failed mortgage lender IndyMac Bank, a symbol of the housing boom
By ALAN ZIBEL
The Associated Press
WASHINGTON — A seven-member group of investors has agreed to buy the remnants of failed mortgage lender IndyMac Bank, a symbol of the housing boom and bust, for $13.9 billion federal regulators said Friday
"As part of the deal, the FDIC agreed to assume losses on a portion of IndyMac's loans. The new investors would shoulder the first 20 percent of the bank's loan losses, with the FDIC taking on the majority of any losses thereafter. The FDIC used a similar loss-sharing agreement when Downey Savings and Loan Association failed in November."
"FDIC officials noted that private-equity firms have bought up failed institutions before. In the early 1990s, two failed banks — Bank of New England and CrossLand Federal Savings Bank — were sold to private-equity firms.
Dune Capital was founded in 2004 by former Goldman Sachs partners Mnuchin and Daniel Niedich.
Flowers, who launched, then dropped, a bid to buy student lender Sallie Mae last year, also is a former Goldman Sachs partner. Paulson & Co. made billions in profits in recent years by betting on the failure of risky home loans.
The IndyMac deal comes as regulators have eased restrictions on such purchases. Previously, private-equity firms could not hold more than a 24.9 percent stake in a bank without becoming a bank-holding company."
Taxpayer money to hedge funds - this is an outrage. But who's to blame? The Republicans or the Democrats? How exactly did a global financial industry crime syndicate take over the US Government?
I'm guessing it had something to do with the Federal Reserve Act of 1913.
yes...
Ill best my left Nut sack that nothing will become of this story. The FDIC will keep doing what it is doing ( Robbing u & me) and Wall street will keep the Rally going. Shelia Bair will come out smelling like a scented Douche.
JUST THE LEFT ONE??? no punch to the right?
I'll deposit something into Sheila. When's she gonna do a playboy spread anyways?
gross
fyi, i junked your post solely due to the visual that's now embedded in my brain. lol
lol
mmmm that reminds me...Ms. Bair's got some junk in dat trunk! Nuttin' like a heaping serving of office ass to start my morning!
Over/Under for 2010: Will the # of bank failures in 2010 be greater than the # of cellulite dimples on Sheila's ass?
The video is based on this blog post from September 2009, and the original blog post was about OneWest unwilling to approve short sale. They'd rather foreclose without prolonged negotiation for short sale or loan mod, because they would be still backed by the government. Quick bucks.
http://activerain.com/blogsview/1243528/is-the-fdic-killing-short-sales-
any bank closures on FDIC Friday today ?
a rare bye week, apparently.
cause d.c. been closed all week.
FDIC Friday was canceled due to Global Warming Snowstorm Clinton.
I REALLY REALLY WISH ZERO HEDGE CAN TOP THE ALEXA SEARCH ENGINE SITE SO PEOPLE CAN SEE THE TRUTH!
I simply cannot understand why so many MSM outlets love Ms.Bair while blasting Mr.Paulson, Mr.Geithner, and Mr.Bernanke.
I think she is total hypocrite, appearing on news day after day screaming against Wall Street bonus and fighting for home owners but then via TLGP and loss-sharing agreements actually ended up endorsing these actions!
*imho*
PPY
It just keeps getting better. Not only do they kick you when your down but they run over you with a bus.
You all might remember the CEO of Indy Mac commited sucicide 2 years ago.
Inspector Asset
ZH -- So which is it? Are the loan BETTER than expected and being sold TOO CHEAPLY by Sheila Bair? (I agree)
Or are we all BANKRUPT because debt and deliquencies are so high (despite that credit markets have RETURNED 50-100% in the last 12 months, bc defaults and losses are LESS than expected)?
WHICH ONE?
IT CANNOT BE BOTH. Its like your "afraid" there's global warming... no wait, global cooling. Ah, we're f-ed either way!
And todays news...Sheila "sells" loan portfolio to Lennar. 2 cents on the dollar outside FDIC zirp 7 yr funding and equity write-down. Glad to toxic sheetrock helps get toxic loans.
This is going to happen no matter what, so we might as well use it to our advantage. Given the escalating scale of loss mitigation, OneWest has every incentive to do genuine and honest accounting. While everyone else is hiding behind the changes in FSAB 157/166, One West can tell it like it really is. Through them we can get a window into how bad things really are.
Banks like WFC might be getting away with it for a time (cutting loss reserves at a time when things are getting anything but better in the asset classes against which they have loaned), but One West might allow the market to assess the real condition of WFC et al.
Make the best of it.
The Big One is coming soon, bigger than the 2000 dot-com crash and the 2008 subprime credit meltdown combined. A huge market blowout.The Big Crash is Coming...."debt bomb" Explosion
Please note, the presser says, "OneWest's Loss Share Agreement is limited to 7% of the total assets that OneWest SERVICES. Who cares about the loans that they service? The original blog, and the video for that matter, deals with the loans the OneWest OWNS! Nice play on words by Mr. Gray.
by the way...80% of the recoveries are not netted out. 20% of the recoveries are netted out, as OWB covers 20%, until they reach 2.5 billion (according to the FDIC response tonight). The remaining 80% falls under the 80-95% reimbursement, depending on if they have reached the "threshold". So, this video is not garbage, as you say it is. Plus, please remember that OneWest bought these loans at 70% of Par, and are reimbursed at 80-95% of Par-Sales Price. Not only can they not lose, but they stand to make HUGE profits.
Is it just me or as things get worse, so do the lies
Another thing to think about... I have been involved with 9 or 10 OneWest Short Sales. In each case, they demanded a promissory note, just as they did in this video. In 100% of the cases, when we produced the loss share agreement, along with Article 2C (short sale formula sheet), plugging in the numbers of the deal into the worksheet, OneWest immediately agreed to waive the promissory note, and approved the short sale. So, the question that begs to be asked is.... Why, when faced with the reality of the shared-loss agreement, does OneWest capitulate and agree to waive the prom note and proceed with the short sale? Could there possibly more to this deal that we don't know about? Me thinks so....
Interesting, so the fdic makes them adhere to hamp, but not hafa, cause under hafa the lender has to release the deficiency. That is pretty scummy.
That FDIC release is nonsense...
doesn't even address the issues raised in the video
Agreed, as others have noted, the number of loans they service is irrelevant, as is the fact on whether they have actually tapped the Treasury, the fact remains that they cut a no-lose deal with a hedge fund with GS ties. Paying 20cents loss is nothing when you bout the loans at 60 cents.
Sheila must be scared to issue a press release in response to this video. It is funny to see an agency with zero credibility respond with a flat denial and the claim that the video is not credible. How about some transparency, Sheila, so we can judge the credibility of the claims for ourselves?
The first rule is to say "Thats a false accusation" then attack the weak points in the argument by steering away from the facts, this has the effect of clouding the accusations.
Then you take the irrelevant and unprovable facets and make a written statement issued by an underling. It buys time for you to develop a stronger argument behind the scene.
But the truth remains, the FDIC has not and never had the Financial ability to absorb this mess on its own.Its cash base comes from the Banks who pass it on to you the depositor/Tax payer in higher fees.The enormity of dollar cost was never going to be recoverable from the charges it takes and it could not lift them high enough to cover it. When faced with this disaster it was forced to allow the jackals help with the kill and feed on the carcass (loss sharing). It is self preservation.
In this case think Enron - deny then deny and show supported figures, baffle them with BS while burying the dead off balance sheet.
Truth is you first see the circling vultures then you smell the carrion then you are directed to the carcass and at its belly you find the jackals and scavengers feeding noisily but in harmony. Sheila what have you done girl - hope in vain the jackals don't turn on you.
It looks like the FDIC Presser has shut this thing down... Very little discussion today, other than those that say, "I told you this video was BS"....Sad, but very typical... The sheep have listened to their master, once again....
'bout time for another video.
WSJ Article, August 2009
WASHINGTON -- The biggest spur to deal-making among banks isn't private-equity cash or foreign investors. It is the federal government.
To encourage banks to pick through the wreckage of their collapsed competitors, the Federal Deposit Insurance Corp. has agreed to assume most of the risk on $80 billion in loans and other assets. The agency expects it will eventually have to cover $14 billion in future losses on deals cut so far. The initiative amounts to a subsidy for dozens of hand-picked banks.
Tracking the Nation's Bank Failures
See banks, savings banks and thrifts that have failed since the beginning of 2008.
Through more than 50 deals known as "loss shares," the FDIC has agreed to absorb losses on the detritus of the financial crisis -- from loans on two log cabins in the woods of northwestern Illinois to hundreds of millions of dollars in busted condominium loans in Florida. The agency's total exposure is about six times the amount remaining in its fund that guarantees consumers' deposits, exposing taxpayers to a big, new risk.
As financial markets heal and the economy appears to be pulling out of recession, the federal government is shifting from crisis to cleanup mode. But as the loss-share deals show, its potential financial burden isn't receding. So far, the FDIC has paid out $300 million to a handful of banks under the loss-share agreements.
The practice is largely a response to the number of bank failures of the past 18 months, which has stretched the FDIC's financial and logistical resources. The FDIC had just $10.4 billion in its deposit-insurance fund at the end of June, down from more than $50 billion last year. The agency said Thursday it had 416 banks on its "problem" list at the end of the second quarter, which means the list of banks at a higher risk of insolvency has been growing.
Journal Community
Vote: How concerned are you about the FDIC's ability to protect your bank deposits?
Previously in USA Inc.
Read more: USA Inc.: The State of Capitalism
Mortgage Firms Struggle to Redo Hard-Hit Loans
07/16/2009
Federal Intervention Pits 'Gets' vs. 'Get-Nots'
06/15/2009
Congress Helped Banks Limit Rule
06/03/2009
U.S. Forced Chrysler's Creditors to Blink
05/11/2009
N.Y. Fed Chair Faces Questions on Goldman Ties
05/04/2009
Regulators Fell One Bank, Spare a Rival
04/24/2009
Goldman Pushes Stock Issue in Plan to Escape U.S. Grip
04/14/2009
Bailout Man Turns the Screws
04/07/09
AIG's Rivals Blame Bailout For Tilting Insurance Game
03/23/09
Citigroup Chafes Under U.S. Overseers
02/25/09
AIG Seeks to Ease Its Bailout Terms
02/24/09
In Merrill Deal, U.S. Played Hardball
02/05/09
Politicians Asked Fed to Prop Up Ailing Bank
01/24/09
Political Interference Seen in Bailout Decisions
01/21/09
Many of the government programs aimed at attacking the financial crisis have carried high price tags, including the Treasury Department's $700 billion Troubled Asset Relief Program, which includes major government investments in American International Group Inc., Citigroup Inc., Bank of America Corp., and the U.S. auto industry. But federal money isn't just going one way. Some of the emergency programs put in place last year, including TARP, have brought in billions of dollars for the government.
On a range of rescue programs run by the Federal Reserve, such as loans to investment banks and purchases of mortgage-backed securities, the Fed earned $16.4 billion through the first six months of 2009. The FDIC said earlier this year that it earned more than $7 billion on the fees it charged through a program that guaranteed debt issued by banks.
On Aug. 14, Alabama's Colonial Bank collapsed, felled by bad commercial-real-estate lending. The FDIC, assuming its traditional role, brokered a sale of the bank's deposits to BB&T Corp., ensuring that customers wouldn't see any interruption. It also agreed to help BB&T buy a $15 billion portfolio of Colonial's loans and other assets by agreeing to absorb more than 80% of future losses. Under the deal, the most BB&T can lose is $500 million, the bank says, and that is only in the unlikely event that the entire portfolio becomes worthless. The FDIC is on the hook to cover the rest.
In June, Wilshire State Bank, a division of Wilshire Bancorp Inc. in Los Angeles, agreed to buy $362 million in deposits and $449 million of assets from failed Mirae Bank, also of Los Angeles. The FDIC agreed to assume most future losses on roughly $341 million of those assets, largely commercial real estate and construction loans in Southern California.
"After we understood how [the loss-share] works, we were literally overjoyed," says Joanne Kim, chief executive of Wilshire State Bank.
Loss-share agreements made a brief appearance in the early 1990s during the savings-and-loan crisis, but haven't been used this extensively before. The FDIC sees the deals as a way to keep bank loans and other assets in the private sector. More importantly, it believes such deals mitigate the cost of cleaning up the industry.
The FDIC contends it would cost the agency considerably more to simply liquidate the assets of failed banks, especially with the current crop of troubled institutions and their portfolios of loans on misbegotten real estate.
Bloomberg News
The headquarters of the U.S. Federal Deposit Insurance Corp. The agency faces an exposure six times the amount remaining in its fund that guarantees consumers' deposits.
Journal CommunityDISCUSS
“Is this kind of activist intrusion into banking operations really in the FDIC charter? How does this make them better able to insure the deposits of the entire banking system? ”
— J. Scott
The FDIC's premise is that banks that take on the troubled assets will work to improve their value over time. The agency estimates the loss-share deals cut will cost it $11 billion less than if the agency seized the assets and sold them at fair-market value.
"This is an issue the FDIC is grappling with because the loss rates they are estimating on these failed banks are pretty amazing," says Frederick Cannon, chief equity strategist at Keefe, Bruyette & Woods Inc.
By potentially mitigating losses -- or at least stretching them out over time -- the deals provide some protection for the agency's insurance fund. "It's a great opportunity for banks," says James Wigand, deputy director of the FDIC's division of resolutions and receiverships. "It's a great opportunity for us."
The federal government is on the hook for billions of dollars in bank losses if the economy doesn't recover. It will carry that burden for a long time. Many of the loss-share deals will be in place for up to 10 years.
Some industry officials worry that bankers might tire of the partnerships with the FDIC and put little effort into reworking the soured loans because the bulk of losses will fall to the government. FDIC officials maintain that because banks still have a "material" exposure, they will be reluctant to do this.
"There is certainly an incentive for the banks to play fair and do right, but there is never a limit on the ability of the private sector to shift cost to the government," says John Douglas, a former FDIC general counsel who now advises banks as a partner at the law firm Davis, Polk & Wardell LLP.
The FDIC's inspector general has said he is examining the controls designed to ensure that banks play by the rules.
Since Jan. 1, 2008, 109 banks in 29 states have failed, ranging from one of the smallest banks in the country, Dwelling House Savings and Loan in Pittsburgh, a one-branch bank with $13.4 million of assets, to Washington Mutual, which had $307 billion of assets and was the largest bank failure in U.S. history.
Those collapses have cost the FDIC $40 billion, putting a huge dent in its reserves. The FDIC was created during the Depression to maintain consumer confidence in banks by guaranteeing deposits. If its deposit-insurance fund runs out, the FDIC would likely have to borrow money from the Treasury Department or slap higher fees on the banks whose contributions keep the fund afloat.
During the savings-and-loan crisis in the 1980s and early 1990s, more than 1,000 banks failed. The government set up the Resolution Trust Corp. to take over assets from failed banks and sell them. Such a structure doesn't exist now, which means that the FDIC has to take on those assets or somehow persuade healthy banks to do so.
Last year, the agency struck only a handful of loss-share deals with healthy banks. That left the government with lots of troubled loans from failed banks to sell.
"The hardest part today in the acquisition game is valuing assets or determining real equity, and with a loss share you can do that," says Len Williams, chief executive of Home Federal Bank in Idaho, which picked up $197 million in assets from the failed Community First Bank in Oregon on Aug. 7, most of it covered by a loss-share agreement.
Over the past 12 months, no bank has been a buyer of more failed banks than Stearns Bank of St. Cloud, Minn., which began as an agricultural bank. It bought the deposits and most of the assets of Horizon Bank in Pine City, Minn., on June 26; of Community National Bank of Sarasota County and First State Bank, both of Sarasota, Fla., on Aug. 7; and of ebank in Atlanta on Aug. 21.
View Full Image
Zuma Press
Stearns Bank is a top buyer of failed banks.
It brokered loss-share arrangements on all the deals, covering $619 million in assets. The acquisitions expanded the bank's assets by 60%, with limited risk of future losses.
By comparison, when Stearns agreed to buy the deposits of failed Alpha Bank & Trust in Alpharetta, Ga., last year, loss-share deals hadn't yet become common. Stearns purchased just $39 million of Alpha's $354 million in assets, leaving the rest for the FDIC to sort out.
Stearns has entered into more loss-share deals than any other bank. "We have had to bid on [each of the banks], so everybody has had the same opportunity," says Chief Executive Norman Skalicky.
In most cases, the FDIC agrees to cover 80% of future losses on a big portion of the assets, and 95% on the rest. The FDIC says it doesn't anticipate facing the 95% loss-coverage scenario on any deal.
Typical assets include loans on commercial real-estate developments, condominiums and single-family homes. Banks are required to report at least every quarter on estimated loan losses, and to have a team in place working full time to maximize the value of the assets. Banks must get permission from the FDIC to sell any loans.
Big banks also have used the deals to grow with minimal risk. On Aug. 21, BBVA Compass, a unit of the giant Spanish company Banco Bilbao Vizcaya Argentaria, bought $12 billion in loans and other assets from the failed Guaranty Bank in Austin, Texas. As part of the deal, the FDIC said it would cover most losses on a $9.7 billion portion of that pool.
DavisPolk
Lawyer John Douglas says loss shares must be closely watched.
The Office of Thrift Supervision said last week that more than half of Guaranty's loans were "higher risk," including commercial, construction and land loans.
BBVA Compass said the deal would have the FDIC "bear 80% of the first $2.3 billion of losses and 95% of the losses above that threshold." Its chairman, José Maria Garcia Meyer-Dohner, described it as a "low-risk transaction." The arrangement made BBVA Compass the 15th largest bank in the U.S.
Veteran banker Joseph Evans saw the loss-share deals as a major opportunity.
He approached State Bank and Trust Co., a tiny bank in Pinehurst, Ga. with just $35 million in assets, with a proposition: He would take charge of the bank, find investors to pump $300 million of capital into it, then buy up the assets of failing banks in Georgia.
Mr. Evans, who has spent years selling distressed assets, recruited investors, and on July 24 he put his plan in motion. The FDIC shut down six affiliated Georgia banks and agreed to sell $2.4 billion of deposits and $2.4 billion of assets to Mr. Evans's team.
The FDIC agreed to absorb most losses on $1.7 billion of those assets. Overnight, the small bank became one of the largest in the state.
"From a turnaround guy's perspective, I've never had this kind of downside protection," Mr. Evans says. "I don't believe we would have either been interested or found interested investors to enter the banking industry at this moment in time, absent the FDIC assistance."
He says there's a good chance his team will make a strong profit. He estimates it will take roughly four years to work through the bad assets in the portfolio.
The FDIC wouldn't have to resort to such deals if it could easily sell the assets of failed banks. But last year, most healthy banks refused to bite.
In 20 of 2008's 25 failures, banks acquired less than 30% of the assets of the failed banks. When ANB Financial failed in Bentonville, Ark. on May 9, 2008, for example, Pulaski Bank and Trust Co. of Little Rock agreed to buy only $236 million of the $2.1 billion of the failed bank's assets.
Last month, Galena State Bank in Galena, Ill., bought most of the assets of failed Elizabeth State Bank in Elizabeth, Ill., under a loss-share agreement.
As a result, Galena's portfolio now includes delinquent loans on two log cabins in the area. Andrew Townsend, Galena's chief executive, say his people have yet to visit the properties, which were often rented out to tourists.
"There's a lot of work to getting your arms around everything and working through credit issues and conversion issues and valuation," he says. "Relatively speaking, that shouldn't take forever, and at the end of the day, we should have a nice pool of earning assets and clientele."
This reminds me of that character from Saturday Night Live who smokes cigarettes constantly and says 'Maybe you should ask yourself that question'
What makes me angriest about all this is that the banks are getting paid in full on these home loans and the citizens are being cast into the gutter like ofal.
If my taxpayer dollars have purchased these homes outright, I'd like to see them given away to our citizens for free.
-MobBarley
At least let the homeowners refinance at market value with low interest rates, if the taxpayers are footing the bill for the losses.
Im late to the show. The video has been removed or confiscated perhaps by those same corrupt government officials that are in denial. The FDIC had to increase their cash position in advance of the multitude of new forclosures they know are coming. To say the tax payer isn't on the hook is so much Bullshit. The printing presses must be working overtime to keep the FDIC bankrolled.
http://www.thinkbigworksmall.com/mypage/archive/1/29027
Off topic but only a bit (no FDIC closures due to snowy week)-
Global warming (or more precisely climate change) does NOT mean universal warming of everything. Earth is more or less a closed system. If you raise the global temperature 1/4 of a degree that is an enormous amount of energy. That energy means we will see hotter hots, colder colds, wetter wets, and drier droughts. That's it- greater energy creating greater swings in day to day climate. If you observe the climate with this in mind hopefully the ups and downs will make better sense.
Whether humans are the single serving cause or not is another issue. The point for us should be our influence is not none so perhaps we can clean up our own contribution- Maybe think of it as stepping on the gas rather than just coasting down a hill.. End of lecture......
Please spend a few minutes & learn the truth about "global warming"
http://www.youtube.com/watch?v=4zOXmJ4jd-8
When was the last time you saw the FDIC take the time to put together an official press release over a "video gone viral"? A video that wasn't put out by the mainstream media... Has this ever happened to anyone's knowledge? Perhaps there is more to this story than we thought? I mean, come on.... One of the biggest money machines in the world took the time to respond to this video. Just think about it!
I've thought about it. This is going to bite them in the ass. They can take it now or take it later but their ass is going to get chewed.
NY Times just released an article on the video. I think the FDIC and OneWest are going to have a very busy week defending this video, as well as other little improprieties that are raised in the article. Looks like Tyler got this one right....Again!
http://www.nytimes.com/2010/02/15/business/15fdic.html
Here's an article about Ocwen, another servicer like Aurora. Please note the attorneys. They are the ones I have contacted and will be talking with this week.
By Brian Collins
Washington -- Suing subprime firms for "predatory" servicing is a growth industry and class-action attorneys appear to have set their sites on a new target: Ocwen Federal FSB of West Palm Beach, Fla.
Several lawsuits have been filed in California accusing the company of abusive and illegal servicing practices. In general, Ocwen is accused of failing to post monthly mortgage payments properly, charging inappropriate late fees, prematurely referring accounts to collections, and forcing homeowners into default as part of a scheme to generate fee income.
http://www.auroraloanvictims.com/Page_2.html
Wamu TRUTH...
PLEASE READ THESE COURT DOCUMENTS.....
JPMorgan admits that the FDIC took over a solvent bank in one of the latest court documents...
I'm enclosing a few more documents filed through the BK court in regards to a declaration of Thomas M. Blake (http://www.crai.com/ProfessionalStaff/listingdetails.aspx?id=1276 ).
The declaration can be found in 103-4.pdf at http://www.mediafire.com/?sharekey=3b830df9f3d0e6fce7c82ed4b8f0c380aff12...
Quoting:
12. Based on my review to date, there is no indication that the OTS performed a solvency analysis consistent with the test for insolvency specified in the Bankruptcy Code. There is no indication that the OTS assessed the fair sale-able value of the assets of WMB (or WMI). Nor is there an indication that OTS compared the fair sale-able value of the assets of WMB (or WMI) to the total amount of either company’s respective liabilities. There is no indication that the OTS performed a comprehensive cash flow analysis of WMB (or WMI). Instead, the OTS found that “WMB met the well-capitalized standards through the date of receivership.”8 Thus, without a thorough analysis of the assets, liabilities and capital of WMI and WMB, it is not possible to come to a reliable conclusion concerning the financial solvency of either entity, whether on a consolidated or stand-alone basis.
Here is another document that says as of August 14, 2008:
"We propose to decapitalize WMBfsb by returning $20 billion of capital to its parent. The $20 billion will include the master note of approximately $7 billion, proceeds from $3.5 billion of Discount Notes and cash generated through additional wholesale deposits and advances from FHLB Seattle. We propose the payment of at least $10 billion by September 30, 2008 and the remaining $10 billion through December 2009."
"The net balance sheet of WMBfsb will be approximately $34 billion to $36 billion after Project Fillmore. The leverage ratio will decrease to 25% from 62%. A well-capitalized institution requires an 8% or higher leverage ratio."
Read reference page 45 of DOCUMENT 103-1.pdf from here:
http://www.mediafire.com/?sharekey=3b830df9f3d0e6fce7c82ed4b8f0c380aff12...
Enclosed is a link to the affidavit of Doreen Logan who is the Controller/ Assistant Treasurer of Wamu who states that there was no liquidity problems;
http://www.google.com/search?hl=en&ie=ISO-8859-1&q=%20Ex.%20D%20to%20Aff...
Remember, WMBfsb was also taken from the holding company and sold to JMorgan/Chase with all of the other assets for only $1.88bil.....
Please, take some time and read these documents. They are a bit long but well worth the read. Don't you wonder why the main stream media doesn't mention the suppose "failure" of the largest financial institution in America? Wamu was a 100+ year old company.....Here is a link to all documents filed through the BK Court;
http://www.kccllc.net/wamu
Jamie Dimon planted "moles" in Wamu??? JPMorgan committed corporate fraud???
http://www.kccllc.net/documents/0812229/0812229090501000000000002.pdf
Wamu's claims against JPMorgan/Chase;
http://wmish.com/doc/gov/0603/JPM_V_WMI_-_ANSWER.PDF
Debtors seek the Rule 2004 examination of the following Knowledgeable Parties: "
"The Regulators"
FDIC - The Federal Deposit Insurance Corporation, in its capacity as receiver for WMB and in its corporate
capacity,
OTS - Office of Thrift Supervision
OCC - Office of the Comptroller of the Currency
Federal Reserve - Board of Governors of the Federal Reserve System
Treasury Department - U.S. Department of the Treasury
SEC - U.S. Securities and Exchange Commission
Paulson - former U.S. Treasury Secretary Henry M. Paulson, Jr
"The Rating Agencies"
Moody's - Moody's Investors Service
S&P - Standard and Poor's Corporation ("S&P")
"The WaMu Suitors"
Banco Santander - Banco Santander, S.A.
Toronto-Dominion - Toronto-Dominion Bank
TD Bank - TD Bank, N.A.
Wells Fargo - Wells Fargo, N.A.
"The Banks"
FHLB-SF - Federal Home Loan Bank-San Francisco
FHLB- Seattle - Federal Home Loan Bank-Seattle
Goldman Sachs - The Goldman Sachs Group, Inc.
"The JPMC Professionals"
PWC - PricewaterhouseCoopers
Equale - Equale & Associates
Holt - Richard F. Holt
Horne - David Horne, LLC
http://www.kccllc.net/documents/0812229/0812229091214000000000008.pdf
Please read this article;
http://www.portfolio.com/industry-news/banking-finance/2009/12/07/why-fe...
http://seattle.bizjournals.com/seattle/stories/2009/12/14/daily18.html
KTS9 Interviews Kirsten Grind "How Washington Mutual Could Have Survived..."
http://www.youtube.com/watch?v=7HW7JjnoqGo
Radio Interview by David Ross;
http://www.youtube.com/watch?v=Zx-BNk4QnTY
http://www.youtube.com/watch?v=Lra79RZztrM
I'm also enclosing another link that quotes Judge Hughes from a case against the FDIC that was wrapped up on August 24, 2005; http://blog.kir.com/archives/2005/08/judge_hughes_ha.asp
"The record shows that the swap was the only reason for this suit. It also shows that the FDIC knew that it had no factual or legal basis for its claims, and that its cases here and in Washington were shams."
As usual, Judge Hughes is acerbic in his opinion regarding the FDIC's conduct, noting in particular that FDIC officials "lied about it all under oath" and they "discarded the mantle of the American Republic for the cloak of a secret society of extortionists."
"It's hard to find a word that captures the essence of the FDIC's bringing this action. Irresponsible is close. Arbitrary, dishonest, exploitative, extortionate, and abusive all fit."
Judge Hughes concluded that Hurwitz and Maxxam "will recover their costs because the record reveals corrupt individuals within a corrupt agency with corrupt influences on it, bringing this litigation."
The Biggest Banking Heist in World History: Washington Mutual
http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=13894
Please read this descriptive complaint that was submitted to the SEC from Apex Venture Advisors
Mike Stathis Managing Principal on October 7, 2008 in regards to the manipulation that occurred;
http://www.avaresearch.com/files/20090930175434.pdf
http://wamuqd.com
http://www.wamu-shareholders-resources.com/wamued.html
http://www.wamucoup.com
http://ghostofwamu.com
ucvhost is a leading web site hosting service provider that is known to provide reliable and affordable hosting packages to customers. The company believes in providing absolute and superior control to the customer as well as complete security and flexibility through its many packages. cheap vps Moreover, the company provides technical support as well as customer service 24x7, in order to enable its customers to easily upgrade their software, install it or even solve their problems. ucvhost offers the following different packages to its customers