Distressed

The Woman Some Are Dubbing ‘The Female Barack Obama’

by Reuters on February 10, 2012

Huffington Post…

By Tim Reid and Aruna Viswanatha Feb 9 (Reuters) – California Attorney General Kamala Harris, a veteran prosecutor with acute political instincts and a reputation for thick skin, gambled big in the settlement negotiations with banks over illegal foreclosures. It’s a gamble that appears to have paid off spectacularly. Harris, whose state has been one of the hardest hit by the U.S. foreclosure crisis, pulled out of talks with the banks last September, saying what they were offering was grossly insufficient. At the time, her office said on Thursday, California was being offered between $2 billion and $4 billion. The gambit carried significant risks. California is a non-judicial foreclosure state, meaning foreclosures can happen outside the court system. Thus there are no court files filled with the notorious “robo-signed” documents, leaving Harris with less leverage than other states in negotiating with the banks. Yet on Thursday, Harris held a press conference in Los Angeles to herald a deal that looks exceptionally favorable to California. Out of the $40 billion in total benefits that are expected to flow from the $25 billion settlement that the banks agreed to pay, California is set to emerge with some $18 billion. Harris wrung a commitment from the banks to reduce loans to distressed homeowners by $9 billion, and to provide $3 billion to assist short sales. Another $6 billion will fund restitution and anti-blight programs, among other things. There are also enforcement and penalty provisions unique to California that Harris said will make sure the banks comply with the terms of the settlement. Harris’ hardball tactics reflect a woman who has prospered in the rough and tumble politics of the Golden State. Born in Oakland, California, she is the daughter of a Tamil mother, a breast cancer specialist who emigrated to the United States in 1960, and a Jamaican American father, a Stanford University economic professor. Her parents divorced when she was a toddler and her mother raised Harris and her sister to be proud African Americans during the tumult of the Civil Rights era. By virtue of her gender and her parentage, Harris is the first female, the first African American and the first Asian American attorney general in California, and the first Tamil American attorney general in the United States. A career prosecutor, she was elected district attorney of San Francisco in 2003 after defeating two-term incumbent Terence Hall. She was re-elected unopposed in 2007. Convictions in San Francisco increased sharply during her tenure. But her unshakeable opposition to the death penalty led to a bitter stand-off with the city’s police department when, just four months into the job, a police officer was gunned down and killed by a gang member and Harris declined to seek the death penalty. She also came under fire when a scandal engulfed the San Francisco crime lab, resulting in the mass dismissal of drug cases. Yet she remained a highly appealing political figure, dubbed “the female Barack Obama” by some wags. In 2010, she prevailed over a weak field to win the Democratic nomination for attorney general, and then barely edged her Republican rival, Los Angeles district attorney Steve Cooley, in the general election. Harris is widely considered to be a likely future candidate for higher office; if the mortgage settlement proceeds as planned, it could ultimately help more than just the troubled homeowners. (Reporting By Tim Reid and Aruna Viswanatha; Editing by Jonathan Weber and Richard Chang)

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The Woman Some Are Dubbing ‘The Female Barack Obama’

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Who Does And Does Not Qualify For A Piece Of The $25 Billion Mortgage Settlement

by The Huffington Post on February 9, 2012

Huffington Post…

The government’s $25 billion settlement with five of the nation’s largest banks could help up to one million homeowners . About $21.5 billion is earmarked for consumer relief, with the remainder going to state and federal governments. Distressed homeowners should not expect a check or aid tomorrow, however. According to the government’s National Mortgage Settlement website, it will take up to two months to select an administrator to oversee the process, identifying who is eligible to receive help, and six to nine months to start with the actual housing help. Help could come via partial loan forgiveness or “principal reduction,” refinancing or, cash payments of up to $2,000 for those who have already lost their home. The program only applies to homeowners who have or had mortgages serviced by Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial. Those with loans owned by housing giants Fannie Mae or Freddie Mac are not affected by settlement. Homeowners from Oklahoma, the only state to not sign the settlement agreement, are not eligible. Here’s more detail on who’s eligible for relief: Principal reductions Servicers are required to provide at least $17 billion worth of direct relief to current homeowners, most of which will go to provide help for principal reduction for first and second mortgages. Other money will be used to facilitate short sales–where the home is sold for less than the mortgage value. The funds also cover anti-blight measures, and enhanced homeowner transition programs. Principal reductions could be anywhere from $20,000 to $50,000 on average but the amount will depend on each homeowner’s market. Homeowners who think they qualify should contact their lender directly. Who is eligible? Homeowners who are still in their home, but are not current on their payments and are struggling to make them. Refinancing Servicers will have to provide up to $3 billion in refinancing relief nationwide to help homeowners get better interest rates on home loans to reduce monthly payments. Current rates for 30-year and 15-year fixed rate mortgages are under 4 percent. Who is eligible? Homeowners who owe more on their home than it is worth and are current on their mortgage payments. Cash Servicers will divvy up $1.5 billion among 750,000 homeowners who have already lost their homes to foreclosure. That comes out to $2,000 and checks will be mailed over the next six to nine months. Who is eligible? Homeowners who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011. For homeowners who lost their house but are concerned it could be difficult for the administrator to track you down, please contact an Attorney General’s Office . For more information: Ally/GMAC : 800-766-4622 Bank of America : 877-488-7814 Citi : 866-272-4749 JPMorgan Chase : 866-372-6901 Wells Fargo : 800-288-3212

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Who Does And Does Not Qualify For A Piece Of The $25 Billion Mortgage Settlement

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Signature Group Holdings, Inc. Announces Departure of Kenneth Grossman as President

February 9, 2012

SHERMAN OAKS, CA–(Marketwire – Feb 9, 2012) – Signature Group Holdings, Inc. (the “Company” or “Signature”) ( PINKSHEETS : SGGH ) today announced the resignation of its President, Kenneth S. Grossman. He is expected to depart the Company in April following the filing of the Company’s 2011 Form 10-K with the SEC. Signature has entered into a consulting agreement with Mr. Grossman pursuant to which Mr. Grossman will continue to provide advice and counsel to Craig Noell, the Company’s Chief Executive Officer. Mr. Grossman will also continue to work with Mr. Noell and Signature’s corporate development staff to identify acquisition and other opportunities to the Company. “We are sorry to see Ken depart,” said John Nickoll, Chairman of the Board, “he is a savvy investment professional with expertise and strong relationships in the distressed arena, and I understand his desire to return to that environment.”

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Foreclosure Settlement Reached: Largest Bank Payout By Far Since Financial Crisis

February 9, 2012

As early as Thursday the government is expected to announce a roughly $25 billion deal with some of the nation’s largest banks to settle charges of systemic and widespread mortgage fraud, according to multiple sources close to the negotiations. The deal would be the largest payout to date from banks in the wake of the financial crisis. The settlement, 16 months in the making, could bring significant relief to those in danger of losing their homes and also much needed stability to the long-suffering housing market. Those who already lost their home, however, would receive just the smallest fraction of the money: a one-time cash payment of about $1,800 as compensation. “Their entire lives have been turned upside down and changed,” said Philip Robinson, the acting executive director of Civil Justice, a Baltimore-based nonprofit that has worked with thousands of Maryland families fighting for their homes. “Does $1,800 sound fair? Does that seem like compensation for a financial and emotional tragedy?” The Department of Housing and Urban Development, one of the Obama administration’s lead negotiators on the deal, could not be reached for comment. Late Wednesday night, as the terms were being finalized, more than 40 states had signed on, including New York, which had been vocal in its opposition to any deal that was soft on the banks. A source close to the negotiations said that California also was on board, but a representative from Attorney General Kamala Harris’s office would not confirm its participation. The deal between federal officials, the state attorneys general and Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial is an attempt to close the book on a scandal that erupted in 2010, freezing the housing market as the legality of thousands of bank-initiated foreclosures were called into question. The announcement is expected to crank up the pace of bank foreclosures, which has slowed as government officials investigate whether some institutions have forfeited their right to repossess homes after forging key real estate documents. As part of the deal, participating states would agree not to pursue a variety of independent lawsuits against the banks. Some consumer advocates argue that the deal is inherently too lenient on banks because the administration chose to negotiate a settlement without first conducting a full investigation into the nature and magnitude of the banks’ alleged fraud. “Any partial settlement is fraught partly because we don’t know the scope of the damages,” said Robert Borosage, founder and president of the Institute for America’s Future, a left-leaning nonprofit organization. “If the banks get broad immunity, homeowners get screwed because the next investigation won’t be able to get around that.” Under the terms of the settlement, the banks would pay $25 billion to participating states. California is reportedly receiving a total of $6 billion to $15 billion in the settlement. Potentially more significant, the banks would agree to forgive some mortgage debt owed by struggling borrowers through what’s called “principal reduction.” The remedy is nearly universally hailed by economists on the right and left as a way to revive the ailing housing market and rescue the nation’s struggling underwater borrowers: More than 20 percent of mortgage holders in the United States owe more on their loan than their home is worth. Citigroup, Wells Fargo and Ally Bank declined to comment while requests for comment from JPMorgan Chase went unanswered. Bank of America declined to discuss the terms of the deal, instead saying, “We’re interested in finding a path forward with a comprehensive settlement that benefits homeowners and communities.” The settlement has the potential to prevent future wrongdoing through new bank guidelines that have been crafted as part of the deal. The effectiveness of these new rules will rely heavily on whether the states can enforce them. The Obama administration pushed forcefully for the deal to present it to voters in 2012 as evidence that the president is helping homeowners and getting tough on banks. Splitting a $25 billion deal between five banks, however, will amount to little more than the cost of doing business and is too small a penalty to deter future fraud, many housing advocates say. “Compared to what these [banks] literally stole, it’s just eyewash,” said Margery Golant, a Florida-based attorney who represents homeowners and formerly served as assistant general counsel at subprime mortgage giant Ocwen Financial. “These are such serious crimes and for everybody to get a pass like this, it just encourages them to think that they always will.” Also unclear is how far the agreement can go in helping borrowers who are trying to hold onto their home. In addition to granting principal reduction, the deal would offer struggling homeowners relief by changing the terms, or refinancing, loans. Those dollars amount to a pittance when you consider the millions of homeowners in need of help, Golant said. “If you do the math, that’s a few hundred million per state. That’s not enough to change anything.” Consumer advocates supportive of the deal argue that while the settlement dollars are small, the principal reduction piece is critical. A handful of lenders have already begun offering such assistance, but mortgage giants Fannie Mae and Freddie Mac have fiercely resisted such a move. “This settlement could be a starting point for principal reduction,” said Ira Rheingold, president of the National Association of Consumer Advocates. “Hopefully it will demonstrate how principal reduction can and should benefit homeowners. If it is done well, maybe it will shame Fannie and Freddie into doing what it should have been doing all along.” Economists are also excited about the potential for principal reductions to boost the housing market. “If $15 to $20 billion is devoted to principal reduction modifications over the next year, that would significantly reduce the number of properties that ultimately end up hitting the market in a distressed sale, thus supporting housing prices,” said Mark Zandi, chief economist at Moody’s Analytics. Included in the settlement are new rules designed to reform the policies and practices among the mortgage companies, mainly banks, that manage the loans on a daily basis and assist struggling borrowers. These new rules could finally shut down any excuses previously put forward by the banks for wrongful foreclosure — if the rules are adequately enforced, said Jared Bernstein, a senior fellow at the Center for Budget and Policy Priorities. “The fact that the settlement has the state attorneys general behind it means that we really should see an end to some of these nefarious mortgage servicing practices,” he said. The states’ ability to enforce the deal remains one of the great unknowns. Nearly four years ago, 11 states signed an $8.4 billion settlement with Bank of America over predatory lending practices by Countrywide Financial. (Bank of America acquired Countrywide in 2008.) Most housing experts agree that the deal has significantly underperformed in large part because the states didn’t have a good mechanism for holding the bank accountable. This settlement will be different because it has a “very robust enforcement mechanism,” said Patrick Madigan, Iowa assistant attorney general and one of the lead negotiators for the Countrywide settlement and the current deal. Banks will pay substantial cash penalties if they do not deliver the full amount of homeowner assistance agreed to under the deal, according to Madigan. North Carolina’s Banking Commissioner Joseph Smith will serve as the “independent monitor” to enforce the deal’s terms. “There’s no comparison between the enforcement and monitoring of this case and Countrywide,” Madigan said. It remains to be seen, however, if these enforcement mechanisms have any teeth. Settlement supporters have high hopes for the deal, though success has to be measured against very narrow expectations, cautioned Rheingold. “In the absence of sufficient federal action, sufficient regulatory action, sufficient congressional action, what we have left is a bunch of state attorneys general saying, ‘Our homeowners are getting hurt. We have to do something.’ “But the state resources are fairly limited, so you have to look at this in terms of what the attorneys general can accomplish within their own set of powers,” Rheingold added. “Does it provide the justice necessary? Clearly not. But will it provide an opportunity for homeowners to be treated fairly? I think it will.”

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California Still Not Joining National Mortgage Settlement

January 26, 2012

One day after New York Attorney General Eric Schneiderman was named co-chairman of a federal mortgage fraud task force, California Attorney General Kamala Harris announced that she still refuses to join the national foreclosure settlement currently under negotiation among the Obama administration, the state attorneys general and the nation’s five largest banks. “We’ve reviewed the details of the latest settlement proposal from the banks, and we believe it is inadequate for California,” said Shum Preston, spokesman for the California Department of Justice in a statement released Wednesday. “Our state has been clear about what any multistate settlement must contain: transparency, relief going to the most distressed homeowners, and meaningful enforcement that ensures accountability. At this point, this deal does not suffice for California.” One major issue still undecided is the extent to which banks will be released from liability for misconduct in the mortgage market, say sources familiar with the negotiations. If a broad release is granted, states couldn’t pursue their own civil investigations of bank misdeeds. Another ongoing concern is that the financial benefit that homeowners would receive from the settlement seems too small, say sources familiar with the negotiations. The deal has been in the works since October 2010, when attorneys general from all 50 states banded together with the federal government to punish five large financial institutions — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial — for mortgage-related misconduct, including robo-signing and failure to provide mortgage modifications to eligible homeowners. In addition to a monetary penalty, the deal is expected to reform the mortgage servicing industry and offer relief to homeowners in the form of mortgage modifications, principal writedowns, refinancing and other options. Both Harris and Schneiderman walked away from the negotiations over concerns that the deal would be too soft on the banks. In his State of the Union address on Tuesday night, President Barack Obama announced the formation of the Financial Crimes Unit, under which “federal prosecutors and leading state attorneys general [will] expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.” Schneiderman is one of five men selected to co-chair the new unit, which is part of a larger Financial Fraud Enforcement Task Force , a sprawling cross-agency investigative effort established by Obama in November 2009 to “hold accountable those who helped bring about the last financial crisis as well as those who would attempt to take advantage of the efforts at economic recovery.” With representatives from more than 20 federal agencies and 94 U.S. Attorney’s Offices, the task force has disappointed critics, who argue that it’s chosen to pursue relatively small fraudsters while leaving alone the major offenders, including the CEOs of banks that wrongfully foreclosed on struggling homeowners. “Look at what happened with WorldCom. … Those guys were committing fraud at their own companies, and still they went to jail for what they did,” said a prominent securities lawyer, referring to the fates of CEO Bernard Ebbers and other WorldCom executives. In comparison, “these financial shenanigans had an impact way beyond any one company, and these guys are still walking around free,” said the lawyer. “There’s just not been much effort to hold Wall Street or any of these other guys accountable.”

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PIMCO Hires Sai S. Devabhaktuni as Executive Vice President and Head of Corporate Distressed Portfolio Management

January 9, 2012

NEWPORT BEACH, CA–(Marketwire – Jan 9, 2012) – PIMCO, a leading global investment management firm, has hired Sai S. Devabhaktuni as an Executive Vice President and Head of Corporate Distressed Portfolio Management. In this new role, Sai will strengthen the leadership of existing distressed credit portfolio managers and analysts. He will be based in the firm’s Newport Beach office and will report to Marc Seidner, a Managing Director and portfolio manager overseeing global credit.

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Mortgage Giant Changes Policy To Assist Unemployed Homeowners

January 6, 2012

In an effort to assist unemployed homeowners, Freddie Mac has doubled the length of time that an unemployed borrower’s mortgage payments can be reduced or suspended, according to a statement released Friday afternoon by the company. Freddie Mac has traditionally allowed its servicers — the mortgage companies hired to handle the day-to-day management of the loans — to offer reduced or suspended payments to help unemployed borrowers weather financial hardships. But there used to be more red tape. Previously, anytime a servicer wanted to “forbear” payments, that is suspend or reduce them, beyond three months, the servicer had to ask Freddie Mac for permission. Now the servicer has the authority to offer such an arrangement without Freddie Mac’s approval for as long a period as six months; plus the extension could be up to 12 months (instead of the prior maximum of six) with the agency’s approval. “These expanded forbearance periods will provide families facing prolonged periods of unemployment with a greater measure of security by giving them more time to find new employment and resolve their delinquencies,” said Tracy Mooney, a senior vice president at Freddie Mac. Nearly 10 percent of the company’s delinquent loans are in some way related to borrower unemployment issues, according to the company. Fannie Mae, the other government-owned mortgage giant, said that it intends to implement a similar program, according to Andrew Wilson, a company spokesman. Freddie’s announcement comes just as America’s unemployment numbers are starting to improve. Last month, the U.S. economy added 200,000 new jobs, according to the Bureau of Labor Statistics. Additionally, the unemployment rate dropped to 8.5 percent. “This is a positive development for the large number of people who are unemployed and struggling in the foreclosure process,” said Kevin Stein, associate director of the California Reinvestment Coalition, a consumer advocacy organization. “At the same time, if Freddie really wants to make a difference in the foreclosure crisis, they should offer loan modifications with principal reductions,” Stein said. “Or, they should offer yearlong leases for tenants living in foreclosed properties, which is something Fannie Mae happens to be doing and Freddie is not and which would make a big difference in this market.”

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Janet Tavakoli: 2011: The Year 60 Minutes Misled Americans About Municipal Bonds

December 30, 2011

In previous posts, I’ve mentioned serious fiscal problems that need to be addressed at state and local levels. This varies by region and some issues are potentially solvable. I live in llinois ground zero for fraud, corruption, underfunded pension funds and general fiscal mismanagement. It’s an example of one of the first fiscal messes in the United States. This year Illinois hiked personal income taxes from 3% to 5%, and increased corporate taxes. We’ll be slammed with hidden tax increases in utilities, purchases, and more. When now Mayor Rahm Emanuel left his post as White House Chief of Staff to run his election, the Chicago mayoral race centered partly around steps, including budget cuts, needed to solve Chicago’s serious fiscal issues: See also my previous post: ” Third World America: ‘Fast-Tracking to Anarch y;” Huffington Post , August 25, 2010. On December 19, 2010, I was (at first) happy to see 60 Minutes highlight fiscal problems of states and municipalities. It explained how Illinois was late on payments to service suppliers, and it’s a huge problem for people doing business with the state. The state’s pension fund is underfunded and although 60 Minutes didn’t mention it, state pension funds are the prey of Wall Street cronies that stuff them with losses and then propose fee-loaded leveraged financial products that are bets to make up the shortfall. The 60 Minutes went completely off the rails by suggesting that these problems would lead to widespread defaults on municipal bonds in 2012. You can still view the segment, ” State Budgets: Day of Reckoning ,” on the CBS web site. A “Performance” Instead of focusing on the implication of these problems to public services including police protection, fire departments, city maintenance, and city jobs (among other things), 60 Minutes let a pundit claim these problems translate into near-term massive municipal bond defaults. Meredith Whitney, the pundit, had written a report, Tragedy of the Commons, which supposedly backed her claims. Contrary to 60 Minutes’s assertion, Meredith Whitney, a banking analyst, did not have a great track record. Gullible reporters had given her great PR for a call on Citigroup that had been correctly made many months earlier in her presence by my friend Jim Rogers, a legendary investor. I was later bemused to see that either she or her PR flacks apparently took credit for my early warnings about serious problems at AIG. (See: ” Reporting v. PR: Meredith Whitney and AIG ,” TSF , March 23, 2009.) Whitney was quoted as claiming: “Clients are not pleased with my call and I have had several death threats.” A 2008 Fortune cover story reported she had received “one death threat.” (Perhaps clients were displeased that her ignoring Rogers had already cost them thirteen points and even then she didn’t directly tell people to bail out.) With characteristic humor Rogers quipped : “Gosh, I have never received a death threat ever for saying I was short a stock or that a company would be going bankrupt. What have I been doing wrong?” Whitney told 60 Minutes: “You could see 50 sizeable defaults. Fifty to 100 sizeable defaults. More. This will amount to hundreds of billions of dollars’ worth of defaults….It’ll be something to worry about within the next 12 8months.” A Wild Guess Whitney wouldn’t justify her analysis saying “Quantifying is a guesstimate at this point.” (” Whitney Municipal-Bond Apocalypse Short on Specifics ,” by Max Abelson and Michael McDonald, Bloomberg News, Feb 1, 2011.) 60 Minutes admitted it had never reviewed her much-touted report. It never mentioned sizeable defaults, only that there “invariably” would be defaults. It also reported that 60 Minutes was wrong about her “untarnished’ track record. Since she started her company in 2009, about two-thirds of her stock picks since starting her company underperformed market indexes. A 2008 Fortune cover story ranked Whitney 1,205th out of 1,919 equity analysts the previous year, based on stock picks. Whitney told Bloomberg’s reporters: “A lot of this is, you know it, but can you prove it? There are fifth-derivative dimensions that I don’t think I need to spell out to my clients.” As a derivatives expert I can attest that this is gibberish. But I want to hear her explanation of “fifth-derivative dimensions,” because I adore a good belly laugh. Genuine Research via Bloomberg Bloomberg is also the financial news service that has done great early work on fraud and related municipal bond defaults, because that’s a worthy story. Municipal credit issues are granular and the severity of the problem — or non-problem — depends on the specific situation. In September 2005, Bloomberg broke a story about Jefferson County’s hair raising problems, ” The Banks that Fleeced Alabama ,” by Martin Z. Braun, Darrell Preston and Liz Willen. According to the article, “taxpayers blame the $160 million in fees JPMorgan Chase and other banks have charged to arrange the county’s financing–in deals that were never put out to bid.” This year, Jefferson County filed for bankruptcy. As the year wore on, Meredith Whitney waffled and by May she told a Bloomberg radio host: “In the cycle of this municipal downturn, I stand by it. But we never had a specific estimate for that.” Fortunately, Joe Mysak, a Bloomberg print reporter exposed that for the nonsense it was. Whitney had indeed given a one-year time frame on 60 Minutes and had called for hundreds of millions in defaults with 50 to 100 or more in defaults. (” Meredith Whitney Trips Over Her Muni Default Tale ,” May 19, 2011.) A Stellar Performance Whitney’s prediction of “hundreds of billions” of defaults was way off the mark. Even with Jefferson County’s $943 million filing, defaults for 2011 were down from 2010. Bonds that dipped into reserves to make payments totaled only $24.6 billion according to Richard Lehmann, publisher of the Distressed Debt Securities Newsletter. Defaults defined as bonds that missed payments are down to only $2.1 billion from $2.8 billion in 2010. In 2011, municipal bonds had stellar performance as an asset class returning more than 10% of potentially tax exempt returns. They beat the S&P, treasuries, corporate bonds and most commodities. (” Whitney’s Armageddon Belied by ’11 Returns ,” by Martin Z. Bruan, Bloomberg News , December 16, 2011). CNBC Schools 60 Minutes As for the actual analysis in Meredith Whitney’s Tragedy of the Commons report, it seems that it had serious flaws at least when it came to Nevada. Nevada State Treasurer Kate Marshall appeared on CNBC to debunk Whitney’s claim that Nevada’s municipal bonds were troubled. Marshall challenged Whitney’s analytics saying (among other things) that Whitney apparently misinterpreted a PEW report on pension plan liabilities. Nevada only represented 1/16th of the plan, and state employees pick up half the tab. Marshall then explained why Nevada’s municipal bond claims paying ability is much better than it would appear to the casual observer. The economy was still tough, but Nevada managed in anticipation of the ongoing crunch. Property tax revenues dropped, but sales tax revenues were up, gambling revenue was up, and business modified tax revenues were up. Her cash position in June 2011 was much better than 2010.

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Oakland Protesters, Officials Take Stock Of Costs

November 5, 2011

By TERRY COLLINS, The Associated Press OAKLAND, Calif. (AP) — The tear gas clouds have cleared, graffiti has been scrubbed off buildings and shattered glass has been swept away. (CLICK HERE OR SCROLL DOWN FOR LATEST UPDATES) As downtown Oakland attempts to get back to normal – which for now seems to include a massive Occupy Wall Street tent encampment in front of city hall – the costs of the movement on the long-struggling city are just starting to come into focus. And the divisions over the violent tactics that capped an otherwise peaceful day of protest may be taking a toll on the movement itself. In contrast to New York’s thriving island of affluence, Oakland has spent decades on the cusp, a tough, blue-collar town that struggles with poverty and crime. The protests have been centered in a part of town that has been the target of economic revitalization efforts that recently have lent the area a more upscale vibe but where abandoned storefronts remain plentiful. City politicians at a chaotic five-hour meeting Thursday night homed in on the price of business lost because of the protests. Downtown retailers and business leaders say customers and businesses have been scared off. One high-profile real estate developer said he stood in the lobby of his historic office building next to the encampment early Thursday morning and sent vandals at the door scattering when he racked his loaded shotgun. “We’re losing 300 to 400 jobs on people who decided to not renew their leases or not to come here,” said Mayor Jean Quan, who also complained about what she said was the protesters’ lack of willingness to talk with city officials about seeking common ground. The president of the Chamber of Commerce blames Quan for three deals falling through. Two businesses planning to lease a total of 50,000 square feet of office space and another planning to bring 100 jobs into the city pulled out after Quan allowed protesters to return to their camp after a police raid had cleared them out, Joseph Haraburda said. “We have economic development in reverse right now,” he said. Quan has paid a high political price over her handling of the Occupy encampment. From an early morning police raid to clear the camp to a tear gas-filled clash with protesters that night to an about-face that has allowed the camp to grow bigger than ever, Quan has faced a barrage of criticism from all sides claiming she has failed to show leadership in the crisis. The City Council did not vote Thursday on an expected resolution to pledge the city’s support to the Occupy movement as several councilmembers expressed doubts, leaving the city’s position unclear. What is clear is that the cash-strapped city’s response to the protests is incurring major costs, especially in the form of police overtime. The Oakland Police Officer’s Association, which represents the rank-and-file, estimates that the city will have spent about $2 million in the past two weeks on the police response to the protests, which at one point included help from more than a dozen outside police forces. “Occupy Wall Street comes in, takes over the park, starts to bleed the resources of this city – resources that this city does not have,” said Sgt. Dom Arotzarena, the union’s president, who added that officers support the message of the movement but not its tactics. The high-crime city laid off 80 officers last year in its effort to close a recession-driven budget gap. Those hardships have not earned the police much sympathy from protesters, who have implored officers to cross the riot lines, in a city that has a long history of tensions between residents and officers. Before Wednesday’s massive turnout, Occupy Oakland had adopted several official positions, but none stating that the leaderless group was committed to non-violence. Like anti-Wall Street encampments in other cities, the Oakland offshoot adopts stands at evening meetings known as a General Assembly that are held four times a week. Among the stances taken by Occupy Oakland was one encouraging participants to use a “diversity of tactics” outside the main encampment to register dissatisfaction with the economic status quo. As an example, it noted that during confrontations with police, some protesters might want to have calm conversations and urge officers to be non-violent, while others might choose to express their anger by yelling, trying to remove police barriers, or disrupting traffic. Yet at a news conference Thursday, divisions among protesters surfaced as several spokespeople addressed the latest vandalism. Shake Anderson, a member of Occupy Oakland’s media committee, said participants in the encampment had called the mayor’s office to disavow the people who were causing damage, an action Quan later praised as helping prevent a bigger blowup between protesters and police. “We called the mayor’s office the instant we understood what was taking place over there,” Anderson said. “That was an anonymous action. That was nothing to do with Occupy Oakland,” Anderson said. Another committee member, Varucha Peller, interrupted and pleaded with Anderson to stick with the group’s approved message of focusing attention on the thousands of people who shut down the Port of Oakland on Wednesday night. “Occupy Oakland did not call the mayor’s office. Individuals called the mayor’s office. Occupy Oakland has a policy that has been passed through the General Assembly that we do not negotiate with politicians and we do not involve political parties,” Peller said. An early Occupy supporter whose views appear to be diverging from the group is Councilwoman Desley Brooks, who camped out with protesters early on. At the council meeting, she expressed skepticism about the camp’s sustainability. “I believe and understand the lack of hope and the pain and the frustration that people are feeling,” said Brooks as her colleagues nodded in agreement. “But I have been extremely troubled, troubled by how far do we allow your rights to go and infringe on other people’s rights.” ___ Associated Press writers Marcus Wohlsen in San Francisco and Lisa Leff in Oakland and video journalist Haven Daley in Oakland contributed to this report.

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Obama Moves Forward On Forgiving Student Loans, But Recent Grads Left Behind

October 26, 2011

NEW YORK — Compared to many of her unemployed classmates, Gabby Bladdick counts herself among the lucky ones. Since graduating with a degree in public relations from Valparaiso University in December, Bladdick has landed a full-time job in her chosen field that even includes benefits. But she’s quickly learning that $1,700 a month doesn’t stretch far, especially with student loan payments now due. Bladdick, who owes about $40,000, devotes more than a third of her salary — or $590 each month — toward paying them back. “When I first started looking at colleges, I figured I’d take out loans and get a job and that it wouldn’t be that big of a deal,” said Bladdick, now 22. “But I had absolutely no idea how much of a burden $600 a month really is for a recent grad.” Earlier today, President Obama announced a new program to help make higher education more affordable by helping current college students not only consolidate their loans, but lower their monthly payments . Borrowers who graduate next year and in the years following will be eligible to consolidate their federal loans at a slightly lower interest rate . Further, the plan also alters the existing income-based repayment program to allow graduates to pay 10 percent of their discretionary income over a period of 20 years — versus requiring enrollees to pay 15 percent of their discretionary income over a period of 25 years before any education-related debt can be forgiven. While the new plan will help current college students who take out loans beginning in 2012, Obama’s plan fell short of providing relief to the millions of debt-strapped borrowers who already struggle to make their monthly loan payments. “It’s a step in the right direction, but a lot of people who need the relief right now won’t be the ones who benefit,” said Mark Kantrowitz, who publishes the financial aid websites Fastweb.com and Finaid.org . “This plan doesn’t do anything for a majority of distressed borrowers. It only helps those still in school.” Earlier today, during a speech about college affordability at the University of Colorado, Denver , Obama announced his plan while also highlighting the increasing cost of higher education. “Over the past three decades, the cost of college has nearly tripled. And that is forcing you, forcing students, to take out more loans and rack up more debt,” Obama said. “Last year, graduates who took out loans left college owing an average of $24,000. Student loan debt has now surpassed credit card debt, for the first time ever.” In addition to Obama’s plan to help future graduates better manage the issue of rising debt loads, the College Board also released its annual “Trends in College Pricing” report . The report underscored the worsening issue of college affordability. It found that over the past three decades, average costs at four-year public universities have nearly quadrupled. While the average public in-state tuition rates at four-year institutions are 8.3 percent higher than they were in 2010-2011, tuition and fees at private colleges and universities increased by 4.5 percent. “While the price of college goes up every year, it’s very clear that public college prices are rising more rapidly than private college prices and that’s certainly related to the decline of state budgets,” said Sandy Baum, an economist at Skidmore College who co-authored the College Board’s report. Kantrowtiz sees today’s report as only the latest indication of the decreasing affordability of college for the average American . “Everyone is struggling, not just to pay for college, but in all aspects of their lives,” said Kantrowitz, who highlighted that the rising cost of college occurs at a time when family income and starting salaries have largely stagnated over the past decade. In the longer term, he sees future college students either graduating with thousands of dollars in additional debt, shifting their enrollment to less expensive colleges and subsequently graduating at lower rates — or simply foregoing the dream of a college education altogether. Given the increasing cost of college, Matthew Segal, the 25-year-old founder of Our Time , a national membership organization for Americans under the age of 30, sees Obama’s plan as a hopeful first step in the right direction. “More money in the pockets of cash-strapped young people already struggling to pay their rent and buy groceries is definitely a good thing,” said Segal, referring to the future changes in income-based repayment rates. “In a perfect world, this would also address the larger problem of why higher education is so expensive in the first place.” It’s a question that Bladdick often ponders, especially at the start of each month when her loan payments are due. Bladdick grew up in a middle class home in St. Louis. Her father is a real estate agent and her mother is a mail carrier. In recent years, when her family fell on tough financial times, the sole burden of paying for college fell squarely on her shoulders. Still, she can’t help but feel frustrated by how quickly the rules have changed. “I wouldn’t change having gone to college for anything,” said Bladdick, during her lunch break. “But it’s frustrating to hear that Obama’s new plan won’t really apply to us. We’re the people who went through college and graduated when the economy collapsed and these loans, they’re absolutely killing us.”

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Is This The Next Michigan?

October 15, 2011

ANN ARBOR, Mich. — When Rich Sheridan lost his job in the dot-com bubble about a decade ago and decided to start his own company, he had some trouble explaining the idea to his wife. “I came home and told Carol I had lost my job and she went, ‘So you’re unemployed,’” he said. “And I said, ‘No, I’m an entrepreneur now.’” Even after weeks of working in his basement with friends on the business plan, when it came time to invest some $15,000 of the family’s money in the nascent firm, Carol was confused. “I was just thinking, what business?” she recalled, adding that she thought her husband and his friends had been applying for jobs together in the basement. What they had been plotting instead was Menlo Innovations , a software-design outfit that now has 42 employees and that Sheridan and his partners expect will bring in about $5 million in revenue this year. And they weren’t alone. While Michigan’s economy is distressed overall, the emergence of countless small technology start-ups here in recent years gives some hope that there are better days ahead. But even as a report issued this month showed that, for all the state’s challenges, Michigan gained more tech jobs than any other state in 2010, there is still some lingering uncertainty about a brand of business that is much different from automobile manufacturing. Take Carol Sheridan’s father, for one. He worked for Chrysler for 10 years and was later a tool and die maker for an auto parts manufacturer. When Rich Sheridan wanted to start Menlo, his father-in-law “looked at him funny,” as James Goebel, another of the founders, remembered. The state as a whole has had to wrap its mind around these new kinds of companies, which are among the fastest growing in Michigan. Even as GDP growth struggles here, the high concentrations of students and engineers have made it an attractive place to start new companies. Many of these have been founded by graduates of the University of Michigan, which recently announced that it would begin investing in companies that begin on its campus. Still, Goebel said that Michigan investors in general are more risk-averse than venture capitalists in other states. “People here only want to start the next HP or Apple,” he said. “But you have to start 10,000 firms to end up with HP and Apple. It’s a new idea here that you would start companies knowing so many would fail.” Menlo certainly hasn’t failed, and nobody is looking at its founders with anything except admiration anymore. The company has been named a “Michigan Economic Bright Spot” and one of the fastest-growing private companies in America. Software they developed for a cytometer manufacturer helps count cells in fluid and has been one of the firm’s biggest successes. Now they’re ready to branch out into even riskier territory. Nontraditional business arrangements, such as deferring design fees in exchange for an equity stake or royalties in the final product, have always been central to what Menlo does, and was central to getting the firm off its feet in its earliest days. Now the founders are considering making this kind of “leveraged play” almost their entire business. “It’s a completely new model,” as Goebel put it, “and that’s true for us and also for the state in general.” This post is part of Patch: The Road Trip . Read Arianna Huffington’s introduction to the project , and be sure to follow Paul on Twitter and MapQuest .

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Free Loan Consultation

September 3, 2011

Call me or complete the form below for the free consultation.   Our goal is to understand your commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed. * = required field First Name * Last Name * Phone Number Email * Loan Type * Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason * New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up Email Phone Your Role Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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Home Builders Run Out of Lifelines

August 31, 2011

From WSJ.com… Five years into a housing meltdown, questions are arising about how long some home builders can survive without significant improvement in the market. Follow this link: Home Builders Run Out of Lifelines Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

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Washington hard money loans

August 29, 2011

We help clients better understand Washington hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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San Jose hard money loans

August 29, 2011

We help clients better understand San Jose hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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San Diego hard money loans

August 29, 2011

We help clients better understand San Diego hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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Riverside hard money loans

August 29, 2011

We help clients better understand Riverside hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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Raleigh hard money loans

August 29, 2011

We help clients better understand Raleigh hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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Portland hard money loans

August 29, 2011

We help clients better understand Portland hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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Phoenix hard money loans

August 29, 2011

We help clients better understand Phoenix hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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Orlando hard money loans

August 29, 2011

We help clients better understand Orlando hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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Mountainview hard money loans

August 29, 2011

We help clients better understand Mountainview hard money loans. Our goal is to understand our clients commercial real estate loan needs and use our capital markets expertise, connections, and partners to provide the best loan solutions.   We find the best debt or equity loan solution for your requirement and get the loan closed.   Example Term Sheet Please Call for Details Loan Amount:                           $1,000,000 to $100,000,000 Maximum Loan to Cost:             Debt to 75% – Mezzanine to 85% Equity to 90% Interest Rate:                             From 3.9% – Must Quote Per Transaction Term:                                        From 6 months to 35 Years Origination Fees:                       Must Quote Per Transaction Prepayment Penalty:                 Must Quote Per Transaction 3rd Party Fees:                         Borrower pays all 3rd party fees including title and escrow Closing Date:                                       As Fast as, within 5 days from receipt of full package Example of Partners Offerings – Subject to Change   * = required field First Name * Last Name * Phone Number Email * Loan Type *   Debt Equity Both Debt & Equity USER/SBA Hard Money Bridge Rehab Property Type   Apartments Office Retail Industrial Hotel Senior Datacenter Healthcare Mixed-Use Single-Tenant Student Housing Other City * Reason *   New Purchase Re-Finance Loan Buyout Line of Credit Other Loan Amount Property Value NOI Other Notes Follow-Up   Email Phone Your Role   Borrower Broker Attorney Other   Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide Bryan Shaffer – Questions: bshaffer@gspartners.com   Loans and Services: Construction Debt & Equity Financing | Interim Loans | Rehab Loans | Bridge Financing | Construction | Perm Financing Fixed-Rate and Adjustable-Rate Loans | Participating Loan Financing | Joint Venture Financing | Second Mortgage Loans Owner Occupied User Loans | Mezzanine Debt Financing Preferred Equity Financing | Credit | Tenant Lease Financing | Sale | Leaseback Financing | Bond Credit Enhancements | Hard Money | Quick Close Loans Specialty Healthcare Real Estate Loans | Specialty Technology & Data Center Loans

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UK- Range Resources reiterates "exponential" growth agenda

August 11, 2011

(MENAFN – ProactiveInvestors – UK) Range Resources’ (LON:RRL, ASX:RRS) executive director Anthony Eastman says that while the company is “distressed” by the fall in its share price amid the market …

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Debt Ceiling Deal A Major Setback For American Labor Market

August 1, 2011

For American workers — both those employed and those looking for work — the deal reached over the weekend to stave off an American default could spell disaster, labor economists say. The deal struck between Obama and congressional leaders, announced Sunday night, may have averted a historic U.S. default, but the $917 billion dollars in cuts planned for the next decade could worsen an already stagnant labor market . While many of the specifics of the planned cuts have yet to be settled, with less government spending to lift the labor market, employed workers, full- or part-time, could enjoy less job security and increasingly stagnant wages, economists say. And those without a job will face an ever more difficult route back to employment. An extension of federal unemployment insurance for the long-term unemployed, discussed in negotiations as late as July, was not included in the final plan . And cuts to government and state spending will likely mean that following months of decreases in public sector employment, even more government workers will be laid off. “This deal represents a consensus of policymakers to look the other way at America’s persistent high unemployment,” said Lawrence Mishel, president of the liberal think tank Economic Policy Institute. “The deal ensures that unemployment will stay high. It will do nothing to help the labor market and the labor market is deeply distressed right now.” In June, a scant 18,000 jobs were added to the American economy, while the unemployment rate ticked up to 9.2 percent. More troubling still, economists say, is that the rise in unemployment was driven primarily by layoffs in May and June, rather than companies’ reluctance to hire. With American manufacturing stalling out in July and GDP growth slowing to a crawl, there is little to suggest that a jump in job creation is on the horizon. The weekend’s deal to prevent debt default will not change this picture. In fact, experts say, it will likely make it worse. Economic historians liken Sunday’s deal to Roosevelt’s decision in 1937 to try to balance the budget after a robust recovery brought on by New Deal spending, dropping the United States back into the Great Depression. “Despite years and years of study by economic historians that we shouldn’t repeat the mistakes of 1937, we seem to be doing it again,” said Lawrence Katz, a professor of economics at Harvard University. The debt deal, as many economists see it, is the opposite of a stimulus: Instead of putting money into the economy to generate jobs and increase demand, money is being taken out. “There’s the classic mantra: When the consumer is not spending and business is not spending, then government needs to get in and spend,” said John Challenger, the chief executive officer of Challenger, Gray & Christmas, an outplacement consultancy group in Chicago. But now, the effects of the government’s package of spending measures aimed at stimulating the economy are becoming exhausted and the debt deal practically ensures that nothing will soon be on the way to replace it. Challenger thinks the first areas of the labor market hit by the deal will be government employees and the businesses that depend on government spending. State and local governments have already been slashing payrolls for months, and companies that depend on government contracts — like Lockheed Martin, a Maryland-based defense contractor that has already begun rounds of layoffs — will likely cut many more positions. “A lot of those billions of dollars that will be cut in the deal goes to pay people’s salaries,” Challenger said. In the private sector, he thinks that the effects won’t be as immediate, and said some employers may be feeling relief that the threat of default has passed. “Private sector businesses are saying, ‘Let’s hope that this means that the country is going to be on sounder footing: that we’re going to get more access to loans that we need to grow our business, that the economy will be more competitive with the rest of the world.’ The big fear is that it’s going to take a long time for that to work.” But economists point out, even if employers are feeling relief that the threat of default is passed, that relief may not translate to increased hiring. The majority of hiring decisions are based on consumer demand and sales prospects, not anxiety over a default. And with U.S. consumer confidence dropping to the lowest level since the recession’s official end last week, an increase in demand may not come anytime soon. “To the typical American, in any meaningful way, we are still in a great recession,” said Katz, the economics professor. Once you account for population growth, Katz added, “the labor market has shown no recovery at all since the recession’s supposed end. We clearly need the federal government, in the short run, providing some kind of demand for labor. This deal signals that there will likely be no attempts at that forthcoming.”

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Rep. Hansen Clarke: Congress Is Obsessed With the Wrong Kind of Debt

July 28, 2011

Congress is now completely focused on reducing debt. This would be a positive development, if not for one detail: it’s focused on the wrong kind of debt. With over a quarter of all American homeowners “underwater” — owing more on their homes than their homes are worth — and total student loans slated to exceed $1 trillion this year, it is household debt, not government debt, that is constraining spending, undermining confidence, and precluding sustainable long-term growth. For all the hysteria about government debt, one simple fact remains: the cost of government borrowing remains extremely low. The federal government can raise funds in the short term at interest rates of almost zero; the benchmark 10 year U.S. Treasury bond yields is just three percent, an extremely low long-term rate. This is a powerful statement that international markets have confidence in the US government’s finances. In stark contrast, a hardworking American who lost his or her job in the recession and fell behind on a credit card payment might be subjected to usury-level interest rates of up to 30 percent. Something is wrong with this picture. Such high interest rates — and high levels of household debt more generally — have more of an impact on most Americans’ real disposable income than higher European-style levels of taxation. They reduce Americans’ purchasing power, which means they reduce demand for American goods and services and, in turn, worsen our employment situation. The situation is similar with mortgages and student loans. In 2009, average mortgage payments surpassed $1,000 per month . This year, the average borrower graduating from a four-year college left school with roughly $24,000 of student debt, despite the grim statistic that — according to a Rutgers University study — only 56% of 2010 graduates were able to find work following completion of their studies. It stands to reason: reducing consumer debt is necessary for stimulating the economy. But, there’s a further reason why Congress should focus on cutting the crippling burden of consumer debt. Congress is deeply responsible for creating the problem. I believe that the legislative branch played both a passive and active role in creating the consumer debt crisis by deregulating dangerous lending and securitization practices, creating incentives for banks to offer risky loan products, and rigging bankruptcy laws against everyday Americans. Consider the 2005 bankruptcy law , which made it harder for consumers to discharge credit card debt through bankruptcy proceedings. By eliminating the risk associated with targeting borrowers with questionable ability to pay, this legislation enabled many banks to have a field day preying on people with limited financial literacy, making as many loans as possible to maximize fees. Similarly, an opaque system of securitization — facilitated by Congress through the Commodity Futures Modernization Act and other legislation — empowered mortgage lenders to profit from processing fees regardless of whether or not the mortgages were sound. This further incentivized predatory lending. This deregulation also helped give rise to the mother of all bubbles, an $8 trillion bubble in the housing market. When this burst, millions of innocent people lost their jobs. Because of recklessness in Washington and gambling in the Wall Street casino, untold numbers of hardworking Americans were thrust into a situation in which they could no longer afford to make their payments and therefore faced massive fees, usury interest rates, and/or eviction. These people never received a bailout. But, then again, most are not asking for one. They are simply asking for a system that is not rigged against them. And Congress has a moral obligation to deliver that. Right now, Congress could take several important steps with minimal budgetary impacts. It could, for instance: Create the right incentives for banks to come to the table and negotiate with distressed lenders. This might mean applying “carrots and sticks” in the tax code to favor lenders that seek to avoid evictions. It could also mean legislation such as “Right to Rent,” which would enable foreclosed homeowners to stay in their homes by paying an independently-assessed monthly fair market rent. Provide tax credits for education expenses and for student loan debt Make private student loans — particularly those written under unfair terms — eligible for discharge in bankruptcy proceedings Swiftly confirm the new director of the Consumer Financial Protection Bureau so it can get to work restricting unfair and deceptive lending practices It’s time to change the national conversation. While relieving government debt should be a medium and long term priority, addressing consumer debt is a short-term imperative. Let’s get to work.

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Nonprofit To Place Young Entrepreneurs In Poor Cities To Fuel Economy

July 25, 2011

A new nonprofit is pairing creative, eager entrepreneurs with distressed cities nationwide. Venture for America , modeled after Teach For America, is confident it can do for business what TFA has done for schools. Just as the successful education nonprofit puts high-performing college grads to work at schools in disadvantaged areas, VFA will recruit top college graduates to work for two years at business startups in hurting cities such as Detroit, New Orleans and Providence, R.I., according to Silicon Republic . The program seeks to help jumpstart the local economy starting next month through specific fields such as renewable energy development, health care innovation, nanotechnology and education. “Our goal is to have a micro-impact,” VFA president Andrew Yang told Boston Herald . “We want to be as big as possible and do as much good as possible. We want to rebuild the economy.” The grads will go to cities in groups to work at a startup. At the end of the two years, the top performer will get $100,000 in seed funding for a new business or to put toward his VFA position, according to the Herald. The young people who enroll in the program will be paid between $32,000 and $38,000 annually for two years. After that time, companies can opt to hire the VFA workers under new terms. Yang said he hopes that the college grads will end up staying in the cities where they’ve worked. “Our concrete goal is to generate 100,000 U.S. jobs by 2025,” the Herald reports. Yang also said his project should help young people coming out of college gain some direction. “The primary driver [for applicants] will be the desire to get into startups and learn how to build businesses,” he told Fast Company. “It’s not easy to find that experience out of college.”

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While Prosecutors Nail Banks Over Offshore Tax Abuses, Lobbyists Push To Delay New IRS Rules

July 15, 2011

Today’s news that Credit Suisse is being probed by the Department of Justice as part of a wider probe into foreign banks suspected of aiding tax evasion is the latest sign of a government crackdown on the illegal practice. In February, four current and former Credit Suisse bankers were charged with helping wealthy Americans avoid paying taxes. Other banks targeted in the probe are HSBC (Europe’s largest bank), Julius Baer and Basler Kantonalbank. Evidence for the current investigation was provided by those banks’ rival, UBS, which agreed to hand over information on almost 5,000 secret accounts held by U.S. citizens as part of a settlement deal with DOJ in 2009. Though prosecutors are taking an aggressive approach, lawmakers and regulators appear to be more passive in their approach to the problem. Last week, two powerful Democratic senators introduced the Stop Tax Haven Abuse Act to help stop what they claim is $100 billion lost to offshore tax abuses. Among its provisions, it would give the Treasury secretary the authority to pursue foreign jurisdictions or financial institutions that impede U.S. tax enforcement. It would also strengthen penalties on tax shelter promoters and those who enable tax evasion by raising the maximum fine to 150 percent of any ill-gotten gains. Its prospects look dim, however, with Republican lawmakers fiercely opposed to any changes to the tax code that could be construed as tax increases. The Internal Revenue Service is also delaying an offshore bank reporting rule, pushing back the deadline by which they have to disclose their efforts to track down their U.S. clients. Banks won’t be required to withhold 30 percent from payments that may have originated in the United States until January 1, 2014, and other withholdings on U.S.-sourced income won’t start until Jan. 1, 2015, reports Bloomberg News . Industry opposition to the proposal has been fierce, with one bank official saying it would turn U.S. citizens into “pariahs.” In response to initial criticism, the IRS emphasized that it would be targeting citizens with more than $500,000 in offshore bank accounts. Transparency advocates warn that the longer that the proposal gets delayed, the more chance that it will be weakened by lobbyists from the Securities Industry and Financial Markets Association and others. Five Years Before WikiLeaks, Rumsfeld Warned U.S. Can’t Keep Secrets Five years before the WikiLeaks document dumps panicked the Defense Department and the State Department — leading to federal investigations and Congressional hysteria — Donald Rumsfeld was warning that the United States is “incapable of keeping a secret.” In 2005, then-Defense Secretary Rumsfeld stated in one of his trademark “snowflake” memos that the system to keep information secure was a failure, reports the Federation of American Scientists’ Steven Aftergood on his Secrecy News blog . “The United States Government is incapable of keeping a secret,” he wrote on November 2, 2005. “If one accepts that, and I do, that means that the U.S. Government will have to craft policies that reflect that reality.” Wachovia Lobbyists Tried Influencing Bailout In the darkest days of the financial crisis, lobbyists for Wachovia frantically sought to influence the shape of the government bailout, according to emails obtained by the Charlotte Observer . The main priority was to ensure that the bank’s worst-performing loans would be included in the Treasury Department’s initial plan to buy distressed assets from the banks. Wachovia lobbyists wanted to add the word “loans” to the legislation’s original definition of such assets, likely broadening the pool to include the bank’s struggling adjustable-rate mortgage portfolio. The bank was sitting on a $120 billion portfolio of such mortgages, and getting rid of them would have enormously benefited its balance sheet. Blackwater May Have Overbilled The United States By $300 Million Blackwater may have overbilled the federal government by more than $300 million for security work in Iraq and Afghanistan, according to two former employees who are suing the company. In documents filed in federal court in Alexandria, Va., Melan and Brad Davis cite a report from an outside auditor who says that information about allegations of overbilling and bribing foreign officials was withheld from him by the State Department and Blackwater executives. The audit clearly put Blackwater founder Erik Prince “on notice that his company may be overbilling for labor – in an amount in excess of $300 million,” claim the Davises in court papers, as reported by the Virginian-Pilot . Attorneys for Blackwater — now known as Xe Services — have not responded to the allegations. Conflicts Of Interest Taint Academic Research Conflicts of interest in the world of academic research have made headlines in recent years, particularly with drug studies conducted by doctors who have been paid by pharmaceutical companies or medical device companies. But such issues also arise among economists, as noted in the Oscar-winning documentary, ” Inside Job .” In the most recent example, two professors at George Washington University released a research report last month that forcefully argued that the Federal Housing Administration should play a smaller role in insuring mortgages — without revealing that the paper was partially underwritten by private mortgage insurance company Genworth Financial, reports American Banker . Any pull-back in the trillion-dollar mortgage insurance market would naturally benefit private insurers like Gemworth. “FHA Assessment Report: The Role of the Federal Housing Administration in a Recovering U.S. Housing Market,” by Professor Robert Van Order, chair of the school’s Center for Real Estate and Urban Analysis there, and Professor Anthony Yezer, director of the university’s Center for Economic Research, states that the FHA could reduce its loan limits by 50% and still serve its core mission of helping low and moderate-income homebuyers. Yezer confirmed that Gemworth helped fund the report but said that that was the extent of their involvement. “I am not getting anything out of it, and Bob Van Order is not getting anything,” he told American Banker . Ferguson tells HuffPost via email that he’s not surprised by the allegations. “There has been lots of talk in academia, several universities and departments have announced new conflict of interest rules, in some cases meaningful (Stanford, the Wharton School), in most cases cosmetic,” he wrote. In addition, he noted that the American Economics Association formed a committee to study whether it should have ethics guidelines or standards, which it has never had in its history but it’s not clear where those efforts stand. Elsewhere in academia, three prominent psychiatrists from Harvard Medical School and Massachusetts General Hospital were sanctioned earlier this month for violating conflict of interest rules, Pharmalot reports . Joseph Biederman, who is known for promoting the use of antipsychotics in children, Thomas Spencer and Timothy Wilens received grant money from several pharmaceutical companies while they were studying the companies’ drugs. Yet they neglected to report some of that outside income to their institutions while receiving grants from the National Institutes of Health to conduct the research. NRC Inspectors ‘Dependent’ On Plant Operators Not Told About Risks Inspectors from the Nuclear Regulatory Commission did not know about a significant safety problem at an Illinois nuclear plant in 2007 because they are usually “dependent” on nuclear plant operators to “identify and correct problems,” according to a NRC memo obtained by the Project on Government Oversight . Plant managers did not recall informing the inspectors about the problems that led up to the incident — which involved the leak of a water system that cooled emergency equipment — led to a 12-day shutdown of the plant and reportedly could have led to a nuclear catastrophe.

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As Government Nears Accord With Banks, Questions Swirl Over Scope Of Investigation

July 11, 2011

WASHINGTON — State and federal prosecutors are pressing to complete a proposed settlement with the nation’s five largest home loan companies over alleged mortgage abuses, even though they’ve only initiated a limited investigation that hasn’t examined the full extent of the alleged wrongdoing, according to interviews with more than two dozen officials and others familiar with the state and federal probes. The deal with the mortgage companies would broadly absolve the firms of wrongdoing in exchange for penalties reaching $30 billion and assurances that the firms will adhere to better practices going forward, these sources told The Huffington Post. Negotiators met in Washington last week to hash out the settlement. For federal and some state officials, expedience now appears to be trumping other considerations in settlement talks with major mortgage servicers. Despite failing to marshal a strong case proving misconduct during the foreclosure crisis, the government is seeking to craft a settlement quickly, in the hopes that this will inject greater certainty into the financial system, stabilize home prices and add vigor to a flagging economy. But some officials with experience sitting across the negotiating table with major banks say the government is making a critical miscalculation that jeopardizes the public interest by seeking a deal before amassing a credible threat of successful prosecution: In essence, they say, the government would give servicers a blanket pass for widespread alleged acts of fraud while extracting too little in return and operating from a relative position of weakness. “I would never want to go into a negotiation without solid evidence of actual misconduct to hold as leverage over my counterpart,” said Neil M. Barofsky, the former special inspector general for the Troubled Asset Relief Program, which was crafted to bail out teetering banks. “It would also be very dangerous from a public policy perspective to waive all future claims as part of such a settlement if you do not have a good sense of the size, scope and severity of the underlying misconduct.” According to sources familiar with the ongoing state and federal probes, state and federal officials have wasted months not digging into the details of the foreclosure crisis, yielding little of value in court and undercutting the lenders’ incentive to strike a settlement of greater benefit to homeowners and taxpayers. The investigators have yet to gather many documents, conduct depositions or assemble tallies of aggrieved homeowners. They don’t yet have a good handle on the number of wrongful foreclosures, the amount of fraudulent documents filed in local courts or the volume of legal instruments processed by so-called “robo-signers,” the agents that lenders employed to process foreclosure filings en masse without examining the underlying paperwork. “The evidence a prosecutor would use is not in the possession of the prosecution,” said one person familiar with the ongoing settlement talks. Even so, state and federal officials are nearing a settlement that would release companies like Bank of America and JPMorgan Chase from legal liability in exchange for a cash settlement, reduced payments for homeowners, transition assistance for troubled borrowers and promises to improve performance and comply with state and federal rules. The Justice Department is pressing state attorneys general to release the banks from liability for a host of alleged violations in exchange for a far-reaching settlement, people familiar with internal discussions said. The Justice Department declined to comment. BofA, JPMorgan, Wells Fargo, Citigroup and Ally Financial are willing to pay a large sum in fines for use in pools that will be used to lower monthly payments for struggling homeowners, but only in exchange for broad amnesty, these people said. In May, the banks offered just $5 billion for the alleged wrongdoing, angering the government officials on the other side of the negotiating table. In April, these banks signed consent orders with federal bank regulators, promising to clean up bad practices. They neither admitted nor denied wrongdoing. All five banks declined to comment for this story. State and federal authorities’ failure to collect more evidence of wrongdoing by mortgage servicers comes in contrast to the public statements of influential officials who have cast the banks as culprits in a national epidemic of foreclosures. Sheila Bair, the former chairman of the Federal Deposit Insurance Corporation, told a Senate panel in May that “flawed mortgage banking processes have potentially infected millions of foreclosures.” Iowa Attorney General Tom Miller, a Democrat leading the multi-state negotiations, has vowed to hold banks accountable for their actions, bringing praise from anti-foreclosure activists. But he’s also tempered his remarks by putting the focus on stabilizing home prices and foreclosure filings. “We first have to fix the housing market,” he said last month during an interview in Chicago. Indeed, halting the long slide in home prices has emerged as the government’s primary goal in its settlement talks with lenders. Following the robo-signing scandal last autumn, many major servicers halted home seizures. But in the months since then, more homeowners have fallen into distress amid high unemployment and a weak economy, adding to the inventories of potential foreclosures to come. The government fears that if it can’t stanch the flood of foreclosures by lowering troubled homeowners’ monthly mortgage payments — and if mortgage servicers cannot resume taking possession of homes for which borrowers have long been delinquent and sell them to people able to afford them — the housing crisis could drag on for years, keeping the broader economy in a feeble state. This is the scenario the government is seeking to stave off by striking a swift settlement with banks, restoring legal clarity to the foreclosure process and providing additional relief for distressed borrowers. By including assistance for homeowners in the settlement agreement — like loan modifications that reduce payments or the overall amount owed — state and federal authorities said they believe they can help the housing market recover. “Our goal is to get people modifications,” Illinois Attorney General Lisa Madigan told activists last month outside a state attorneys general conference in Chicago. “The housing market cannot heal and recover until mortgage servicing and foreclosure problems are resolved,” Mark Pearce, the FDIC’s director of depositor and consumer protection, told a congressional panel last Thursday. “A comprehensive resolution for past servicing errors is essential to the recovery of the housing market and greater economy.” When settlement figures were first floated earlier this year — before any findings from federal or state agencies were publicly disclosed — some members of Congress likened the amounts to “shakedowns.” The ultimate target, up to $30 billion, would constitute the second-largest attorneys general-led settlement ever, trailing only their landmark settlement with the tobacco industry. To be sure, those pushing for a settlement said they have enough proof that BofA, JPMorgan, Citigroup, Wells and Ally abused homeowners and broke state laws in the process. According to people familiar with the findings, that evidence includes: – Two sets of confidential reports — one of which was first reported by The Huffington Post — that accuse the five companies of defrauding taxpayers on government-insured mortgages and violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government, because defective foreclosures, reckless underwriting, flawed quality controls and inadequate foreclosure prevention led to taxpayer losses. – Findings from the Justice Department’s U.S. Trustee Program, a unit overseeing the integrity of bankruptcy courts, that show mortgage servicers filed inaccurate claims in as many as 10 percent of bankruptcy cases. – Undisclosed multi-state audits of state-regulated mortgage servicers like Ally, which found “egregious” violations of consumer protection laws. – Public reports from federal banking regulators detailing a “pattern of misconduct and negligence” in the way mortgage servicers processed home repossessions, which represent “significant and pervasive compliance failures.” – Recent audits from the Treasury Department’s Home Affordable Modification Program, which concluded that BofA, Wells and JPMorgan abused homeowners, violated program rules and needed “substantial improvement” in their servicing operations. But upon closer inspection, the evidence file is surprisingly thin, sources said. Probes launched by the Department of Housing and Urban Development and its inspector general only reviewed loans insured by the Federal Housing Administration, a small part of the broader mortgage market. The Justice Department’s bankruptcy unit only reviewed a limited number of loans that even entered bankruptcy. And Justice’s recent subpoena of Ally, which requested “documentation and other information in connection with its investigation of potential fraud related to the origination and/or underwriting of mortgage loans,” was only sent last month, according to a company filing with the Securities and Exchange Commission. The federal bank regulators’ review examined just 2,800 loan files, or 0.001 percent of homes that received a foreclosure filing last year, according to calculations made using data from the Office of the Comptroller of the Currency and RealtyTrac, a data provider. Only about 200 loans each were examined at banking behemoths JPMorgan, Bank of America, Citi and Wells, Julie L. Williams, the No. 2 official at the OCC and the agency’s chief counsel, told a House panel last Thursday. Those four firms collectively service $5.7 trillion in home loans, or about 54 percent of all outstanding residential mortgages, according to Inside Mortgage Finance . Bair has raised questions over the size of that sample in congressional testimony. Attorneys general, which act as their respective state’s top law enforcement officer, haven’t seen the underlying documentation that supports any of the findings from the various federal agencies that undertook reviews of mortgage practices, said people familiar with the probes. Many of the findings were communicated to them verbally. Representatives of HUD and the Justice Department declined to comment. Federal bank regulators, which have access to the most sensitive bank documents given their oversight role, said they can’t share specifics for individual firms, supervisory reports or any underlying documentation that formed the basis of their findings, citing federal rules prohibiting their disclosure. The bank watchdogs, specifically the Federal Reserve and the OCC, have near-exclusive oversight authority over national banks like BofA, JPMorgan, Citigroup, Wells Fargo and their holding companies. The states could push for expanded investigative powers, but they would likely face a hard slog in court. The state attorneys general do not have any findings from their own investigation that could be used to guide their settlement discussions. Individual states such as New York, Delaware, Illinois, California, Michigan, Utah, Florida, Nevada, Arizona and Washington have begun to probe alleged illegalities, combing through foreclosure files in local courts, subpoenaing documents and sending investigative demands requesting information from the targeted banks. But the investigations are in nascent stages and far from producing conclusions. “There is also no way of knowing if the deal you are striking is a fair and equitable one for the people you represent if you have not conducted an adequate investigation into the harm that may have been inflicted upon them,” Barofsky said. “They’re going bear hunting with no ammo in the gun,” Adam J. Levitin, a bankruptcy and mortgage expert who teaches law at Georgetown University, said of the state attorneys general. In a recent interview with the Rochester Democrat and Chronicle , New York Attorney General Eric Schneiderman said he was “stunned” by the lack of depositions and paperwork documenting illegality. “We have no leverage,” Schneiderman said. The government side is using a “small sampling of evidence” to “extrapolate liability,” one person said of the negotiations. Some of the attorneys general, who asked to remain anonymous, said the government should use whatever evidence it currently has to extract as much money as possible, and then move on. The states lack the resources to conduct a comprehensive investigation that could take many more months, if not years, they said. States had a cumulative budget deficit of nearly $84 billion in the 2011 fiscal year, according to an April report by the National Conference of State Legislatures. That gap is expected to swell to $86 billion for the 2012 fiscal year. On May 23, Kamala Harris, the attorney general of California, flanked by advocates, homeowners, the mayor of Los Angeles and HUD representatives, announced the formation of a “Mortgage Fraud Strike Force” designed to protect borrowers and investors in her state, the nation’s largest housing market. California ranked third last year on the Mortgage Asset Research Institute’s Mortgage Fraud Index. But Harris announced last week that the special unit will likely lose its investigative abilities, a consequence of a debilitating $71 million budget cut. Her office will lose the ability to follow up on open investigations ranging from foreclosure scams to “multi-million dollar corporate fraud,” she said in a statement. “It’s all about their budgets,” Senator Tom Coburn (R-Okla.) said last week about the state attorneys general and their settlement talks with the banks while rubbing his thumb against his fingers. The AGs launched their 50-state probe nine months ago. The law enforcement officials, along with HUD, Justice, Treasury, the Federal Trade Commission and more than 30 state bank regulators, sought to investigate allegations that banks routinely mistreated distressed homeowners whose loans they serviced and that the firms employed faulty, and at times illegal, practices when foreclosing on defaulted borrowers. The reviews came in response to news reports that companies like BofA and JPMorgan used flawed documentation and improper procedures to seize delinquent borrowers’ homes. The resulting national scandal led to voluntary foreclosure freezes by BofA, JPMorgan and the fifth-largest U.S. mortgage servicer, Ally. Others, like HSBC North America Holdings, soon followed suit. The lack of a rigorous probe since has inflamed members of the Senate Banking Committee. “We need a full-fledged investigation,” said Alabama Republican Sen. Richard Shelby, the ranking member on the committee. “There’s no substitute for a thorough investigation and finding of fact.” “I want them to be aggressive. Whatever it takes to send a message that robo-signing and that kind of behavior won’t be tolerated,” said Sen. Sherrod Brown (D-Ohio), another committee member. Sen. Jeff Merkley (D-Ore.), another banking committee member, said of the state attorneys general that “in terms of doing right by homeowners in this country, they need to have all the data and all the figures so they can pursue what is a fair deal.” The state legal officers have a record of reaching high-profile settlement agreements with predatory mortgage companies. Firms like Ameriquest Mortgage, Household Finance and Countrywide Financial all found themselves ensnared in multi-state probes that eventually yielded settlements in the hundreds of millions of dollars — in the case of Countrywide, the settlement yielded more than $8 billion. In those cases, the states largely targeted the companies on their own. Now, they have the backing of the Obama administration. “A comprehensive investigation with full disclosure and meaningful settlement terms would be a first step toward fixing the damage to American families caused by lax oversight of mortgage lending and servicing over the past decade,” Brown said. “These negotiations must provide justice for homeowners, confidence for investors and certainty for the housing market.” * * * * * Shahien Nasiripour is a senior business reporter for The Huffington Post. You can send him an email ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 1-917-267-2335.

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Slideshow: What homebuyers can get for $250,000

June 10, 2011

Each week, TODAY real estate expert Barbara Corcoran looks around the U.S. to see what homebuyers can get for their money.

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Celebrity Adviser Ken Starr Name-Dropped Peterson, Mellons in Alleged Scam

June 9, 2011

By John Helyar and David Glovin June 18 (Bloomberg) — Kenneth I. Starr knew how to cultivate relationships with powerful people, and he did it in the most transparent way — by serial name-dropping. Dining with Starr in the Grill Room at the Four Seasons in New York meant listening to him reel off bold-face names as fast as he guzzled Diet Cokes, according to one occasional lunch companion who asked not to be identified. Certain people would come up again and again in his boasts, according to a story in the June 21 issue of Bloomberg Businessweek. Starr would say he had lunch with Peter Peterson, co-founder of the private-equity firm Blackstone Group LP , or that he and “Pete” were talking at the Council on Foreign Relations, long chaired by Peterson, or that he had done something with “Pete,” according to the companion. Starr managed money for a living, and his relationship with Peterson was one of his key assets. Rachel “Bunny” Mellon, the 99-year-old widow of the bank heir and philanthropist Paul Mellon was a longstanding client, according to Alex Forger , Mellon’s lawyer. It was his connection to the Mellons that started Starr on his path to wooing the rich, according to people who knew Starr and who asked not to be identified. Starr’s career famously came to an end last month when government agents arrived at his home on Manhattan’s Upper East Side and found him hiding in a closet, prosecutors in Manhattan said on the night of his arrest. His $7.5 million condominium, which he shared with his fourth wife, Diane Passage, a pole dancer, featured floor-to-ceiling windows, a granite lap pool, and a 1,500-square-foot garden, financed with what prosecutors said was plundered cash, according to a criminal complaint. ‘Secret’ Interest Days after his arrest, a grand jury indicted Starr for cheating 11 clients — Jim Wiatt, the former head of the William Morris Agency, and actress Uma Thurman among them — out of $59 million. Starr pocketed half that amount, while the other half was placed in investments in which he or his friends had a secret interest, prosecutors said. Starr has denied wrongdoing and is being held at the Metropolitan Correctional Center in lower Manhattan. The Securities and Exchange Commission brought its own civil fraud lawsuit against Starr and Passage, seeking the return of tens of millions of dollars. The two haven’t yet responded to the SEC suit. A judge last week extended the freeze on the couple’s assets at a hearing attended by Passage, who looked uncharacteristically demure in a pink cardigan and a black skirt. She declined all reporters’ questions except for one from Bloomberg Businessweek, about her age. “Thirty-four,” she said. “You can take a couple of years off that if you want to.” Elite Crowd The disintegration of Starr & Co., which once managed more than $700 million for about 175 wealthy individuals, exposes an uncomfortable truth about the elite crowd he preyed on — that wealthy, sophisticated people could be such easy marks for fraud. While the numbers involved aren’t on the scale of Bernie Madoff ’s Ponzi scheme, Starr shared Madoff’s ability to create an aura of exclusivity around himself that appealed to the elite. His allure was augmented by Starr’s attendance at invitation-only business gatherings, such as Allen & Co. President Herbert Allen ’s annual media conference in Sun Valley, Idaho. Still, there is no special trick to Starr’s alleged con game that one can glean from his indictment or the SEC complaint. So how is it so many people so willingly allowed their pockets to be picked? The Herd “Everyone follows the herd,” said Ken Springer, a former Federal Bureau of Investigation agent and founder of New York- based investigative firm Corporate Resolutions. “Everyone says this guy is the best, and no one vets the people.” Starr & Co. rose by buzz and fell by buzz. A court- appointed receiver has reported that only 30 to 40 clients remained with the firm, after scores of others left amid repeated incidents of unauthorized client wire transfers and money-losing investments. Individuals once affiliated with Starr have typically gone mum — Peterson declined to comment on either his relationship with Starr or the accusations against him — or distanced themselves from him. Millennium Technology Ventures, a venture- capital firm that grew out of one co-founded by Starr and Peterson, addressed the issue in a June 4 letter to investors. ‘Not Involved’ “He has not been involved in investment decisions for the fund and has not been actively involved in any operational or strategic decision-making capacity with the fund for many years now,” wrote Daniel Burstein , one of Millennium’s two managing partners who were once with Blackstone. In addition, he wrote, “Mr. Starr has been removed from his role as a member of the Special Advisory Board.” Peterson remains a special advisory partner with Millennium, according to the firm’s website. Burstein declined to comment for this story. Starr’s connections to Blackstone go back to the early 1990s, when the firm was considerably smaller than it is now. Blackstone received $90 million from clients of Starr & Co., according to a lawsuit filed in 2009 by the estate of former Starr client Joan Stanton. Actor Wesley Snipes , for instance, put $1 million into Blackstone, according to testimony in the actor’s 2008 tax- evasion trial. Injecting himself as a middleman, Starr charged clients for placing their money with the firm and pooled their investments in partnerships he controlled, prosecutors said. The Stanton complaint doesn’t claim that Blackstone was aware of Starr’s motives. ‘Excessive’ Fees The Stanton estate’s suit decried “excessive fees,” which came on top of Starr’s regular ones. His annual charges rose from $120,000 in the years after he began working with Stanton in 1987 to $240,000 in 2004. The suit also accused Starr of using the partnerships to prevent Stanton from having direct communication with Blackstone. Stanton committed $5.1 million to a fund called Blackstone Domestic Capital Partners II, a Blackstone entity, her estate alleged. Her money didn’t go straight to Blackstone Domestic, according to the lawsuit. Stanton’s money was instead put with that of other Starr clients in a $12.4 million pool he formed called Blackstone Investors Partnership, which wasn’t affiliated with the Peterson Blackstone, according to the complaint. Stanton’s Blackstone Domestic returns were supposed to go to a trust whose assets would be distributed tax-free to heirs. Those Blackstone returns went to purposes unknown, according to the Stanton estate’s complaint. Venture Firm By 1997, Starr and Peterson had grown close enough to create and co-invest in a tech venture firm called P.S. Capital, according to filings and a person familiar with the enterprise. The vehicle’s chief financial officer and general counsel was Ronald Starr , a son from Ken Starr’s first marriage, and it created two investment funds totaling $13 million, according to this person. As Internet fever spiked around the year 2000, P.S. Capital morphed into the more ambitious Millennium Technology Venture Fund, which, according to press releases, raised $160 million of investor capital, yielded more than two dozen technology startups, and included “special limited advisory partners” Peterson and Starr. Dan Burstein , who previously had been a senior adviser to Blackstone and chief investment officer of P.S. Capital, became a managing partner of Millennium, as did Richard Kimball, then Peterson’s son-in-law. Settled Suit The firm’s location in the same office building as Starr & Co. enabled Starr to be active in the firm. He was “actively involved in managing personnel matters,” according to a former Millennium secretary named Mystery Masiello, who filed a discrimination lawsuit against the company in 2003. She alleged that when she told the firm’s leaders she was pregnant in July 2001, Starr said, “Oh great, now Dan is going to have to get a new assistant,” referring to Burstein. The case was settled on undisclosed terms in 2003. The Millennium fund, launched just before the Internet bubble burst, proved to be a dud. Its few successes — such as the Internet security company Phobos, which was sold to SonicWALL in 2000 — were overshadowed by big losses. About half of the original $160 million has been returned to investors, according to a person familiar with its finances who asked not to be identified. Millennium is in the process of being wound down, according to the June 4 letter to investors. ‘Land Rush’ “They were caught up in the Oklahoma land rush” along with many other Internet investors, says Neil Livingstone, former chief executive officer of GlobalOptions Group Inc. , a security company. GlobalOptions, which he said was the Millennium Fund’s only non-tech investment and its top- performing portfolio company after the bubble burst, went public in 2005. It owed much of its success to business it received directly from Millennium during the post-bubble malaise. “We shut down a lot of their Silicon Valley companies,” said Livingstone, who is now CEO of Washington security firm ExecutiveAction. The firm was an early example of Starr’s growing propensity to invest client funds “in questionable and suspicious investments, often with a direct benefit to himself, his wife,” or friends, prosecutors said last month in Starr’s criminal complaint. Starr also put his clients’ money straight into GlobalOptions stock. In a February 2008 SEC filing by GlobalOptions, Thurman and playwright Neil Simon together were listed as owning almost as many shares as the company’s CEO, Harvey Schiller . New Incarnation In 2004, Millennium was reinvented by Burstein as Millennium Technology Value Partners, a provider of liquidity for distressed tech companies in exchange for equity stakes. In its new incarnation it has had some success, investing in companies that were later bought by Amazon.com Inc. , Microsoft Corp. and AT&T Inc. , and in April it closed a new $280 million fund to new investors, according to Millennium’s press releases. Starr was listed on the Millennium website as a “special limited advisory partner” until February 2008. He effectively ceased involvement when Burstein changed the concept, according to people familiar with the firm. Starr met Bunny Mellon when he was a young certified public accountant with Manhattan-based Oppenheim, Appel, Dixon & Co. The Bronx-born graduate of Queens College and Brooklyn Law School loved the idea of handling taxes for one of America’s richest families, according to a person familiar with the situation. Modest Dress He absorbed his clients’ methods and desires, though he dressed inexpensively himself. He was following the advice of Paul Mellon, according to Livingstone, who recalls Starr invoking this line from the philanthropist: “If you have a bigger yacht than your clients, they won’t trust you.” The Mellons led Starr to another big-fish Oppenheim client, Arthur Stanton, who made his fortune as the first U.S. distributor of Volkswagen Beetles. Stanton and his wife, Joan, lived at one of Manhattan’s finest addresses, 10 Gracie Square, according to a published report of her apartment’s sale in February. The Stantons’ apartment served as a salon to many of the city’s elite. Joan Stanton was an actress who had played Lois Lane in The Adventures of Superman radio show, and their home was often filled with performing artists, according to a person familiar with the matter. When their daughter turned 21, Leonard Bernstein led the singing of Happy Birthday, the daughter, Jane Stanton Hitchcock, once recounted in an interview. Arthur Stanton introduced Starr to his social circle and endorsed his accounting. Film director Mike Nichols and stage director Hal Prince became Starr clients. Arthur Stanton died in 1987, leaving $60 million to his widow, and Starr pitched himself to manage it for her, according to a person familiar with the matter. ‘Predator’ The lawsuit brought against Starr by Joan Stanton’s estate 22 years later, soon after her own passing at age 94 in May 2009, portrayed him as a predator who defrauded her of “tens of millions of dollars.” “Mrs. Stanton’s lack of financial acumen was known to Mr. Starr,” according to the complaint. “Mr. Starr began to cultivate Mrs. Stanton as a client who would come to rely on his services exclusively.” Starr left Oppenheim in 1987 to start his own firm, he said in testimony at the 2008 tax-evasion trial of client Wesley Snipes. Skills honed on the Mellons and Stantons served him well in building a larger clientele, according to a person who has known him professionally for years. The person describes Starr as a master of ingratiating himself with people. He wasn’t suave; he wasn’t a Madoff in appearance and charm; he was rather abrupt. Detailed Investments So what was the appeal? This person describes Starr as very bright and says he came across as sincere. He could sit down with a piece of paper and map out detailed investments. Starr’s reputation took its first public beating in 2002 when his client Sylvester Stallone sued him for keeping him invested in Planet Hollywood from 1997 to 2001, as the restaurant chain spiraled toward bankruptcy and the value of his 4 million shares withered. The actor accused Starr of putting his friendship with Keith Barish , a founder of Planet Hollywood, ahead of his fiduciary duty to clients, and sought at least $10 million in damages. The litigation, settled on undisclosed terms in 2003, was an example of what prosecutors later said was Starr’s habit of making decisions without his clients’ approval. In 2006, Starr formed Starr Investment Advisors; regulatory filings indicate he had 26 to 100 clients and 11 to 50 employees. Two Funds Starr placed $6.5 million of Bunny Mellon’s fortune into two investment funds from 2005 to 2007 without informing his longtime client that they were “highly speculative and risky,” according to prosecutors. He also failed to “disclose certain conflicts of interest,” according to indictment against Starr. Barish didn’t return a call seeking comment. Only in August 2009, when investigators asked Mellon’s attorney about these illiquid investments, did her representative become aware of the funds. Starr returned $4.3 million to Mellon that month, according to the indictment. Starr’s behavior outside the office also turned erratic after taking up with Passage in 2005. He began to forsake his own counsel about modest appearances, spending more than $400,000 on jewelry from Jacob & Co., aka Jacob the Jeweler, during the span of several months in 2006, according to the criminal complaint. Pole Dancer In May 2007, he divorced Marisa Starr. He did so by filing court documents without her knowledge that claimed she agreed to end 16 years of marriage, according to her 2009 lawsuit. Starr’s fourth wife was a flashy, jarring presence in Manhattan society — tattooed, provocatively dressed and a pole dancer. She put on a Poledance Superstar competition in New York in October 2009 to raise money for a charity she started called S.P.I.N. (Single Parents In Need), according to a website promoting the event. Starr was proud of her, too, showing iPhone pictures of her gyrating on a pole to fellow attendees at a Tribeca Film Festival function in 2008, according to people who were there. In early 2008, Starr recruited Jacob the Jeweler, whose real name is Jacob Arabo , as an investment client. His money was invested in “sure deals” that included Glassnote Entertainment Group, which gave Passage a $150,000-a-year job, and Martin Bregman Productions, a movie venture involving Marty Bregman, a Starr client and a veteran producer of films such as Scarface, according to the criminal complaint. Prosecutors said Passage wanted to make the film version of “The Desert Rose,” Larry McMurtry ’s novel about an aging Las Vegas showgirl. The two doomed ventures represented $2.7 million of the $13 million of which Arabo was defrauded by Starr, according to the complaint. Strange Behavior The same network that made Starr rich quickly undid him, as stories of losses and strange behavior spread. Clients left the firm, including Mike Nichols and his broadcaster wife, Diane Sawyer , according to a person familiar with the matter. Four months after Stanton’s death, her estate sued Starr for “gross abuse of trust and confidence” over 20 years. The Stanton complaint, combined with some individual complaints, spurred the Manhattan District Attorney’s office and the SEC to start asking questions. Starr settled with the Stanton estate for an undisclosed sum in January, according to a person familiar with the situation. He also reached a $4 million settlement that month with an unidentified playwright and screenwriter who complained of being fraudulently induced to invest in a failed restaurant chain, according to the indictment. Top Clients Starr raided other clients’ accounts to make the payment, prosecutors said. In another winter development, a veteran account manager for Starr named Arnold Herrmann left for rival firm Citrin Cooperman & Co. and took some of his top clients, according to a Feb. 11 Citrin Cooperman press release. One of the clients was Barbara Walters , according to a person familiar with the matter. As his firm disintegrated, Starr tried to maintain appearances. In February he borrowed $2.6 million from Los- Angeles-based City National Bank , according to a lawsuit filed by the bank on June 16, two weeks after Starr missed a $9,385 interest payment. At a March 10 meeting with federal investigators, he said his firm had 200 clients. While that would have almost been true at its peak, the list had dwindled to less than a quarter of that by the time of his arrest, according to the criminal complaints and a document filed in court by the Starr & Co. receiver, Aurora Cassirer. Final Straw In April, prosecutors said, Starr bought the $7.5 million condominium. This proved to be the final straw. On May 25, the lawyer for Bunny Mellon, Starr’s first big client and one of his last, was looking through her financial statements. He saw a series of mid-April wire-transfers out of her Starr & Co. account, totaling $5.75 million, according to prosecutors. Starr had allegedly raided the account to close on his condominium. The lawyer called the authorities. Two days later, federal agents were removing him from the closet. The civil case is SEC v. Starr, 1:10-cv-04270, and the criminal case is U.S. v. Starr, 1:10-mj-01135, U.S. District Court, Southern District of New York (Manhattan). To contact the reporters on this story: John Helyar in Atlanta at jhelyar@bloomberg.net ; David Glovin in New York federal court at dglovin@bloomberg.net .

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Primary Cause Of Foreclosure Now Unemployment

June 5, 2011

The Obama administration’s main program to keep distressed homeowners from falling into foreclosure has been aimed at those who took out subprime loans or other risky mortgages during the heady days of the housing boom. But these days, the primary cause of foreclosures is unemployment.

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Investors Jump Back Into Rebounding Hotel Market — Industry Partners

June 2, 2011

Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide. Retail – Office – Industrial – Hotels – Multi-Family – Student Housing – Single Tenant SBA Loans . Distressed REO Properties – Whole Loans …

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Updated: Cassidy Turley Bolsters Southeast Presence With Carter …

June 1, 2011

Cassidy Turley announced its intention to acquire the brokerage and property management operations of Atlanta-based commercial real estate services firm Carter, a move that would gain it a significant foothold in the Atlanta and Central … Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide. Retail – Office – Industrial – Hotels – Multi-Family – Student Housing – Single Tenant SBA Loans . Distressed REO Properties – Whole Loans …

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Jones Lang LaSalle Aligns With MOB Developer — Industry Partners

June 1, 2011

Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide. Retail – Office – Industrial – Hotels – Multi-Family – Student Housing – Single Tenant SBA Loans . Distressed REO Properties – Whole Loans …

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Morgans Hotel Group Sells Two for $140M — Industry Partners

June 1, 2011

Commercial Real Estate & Multi-Family Loans – Both Debt & Equity – California & Nationwide. Retail – Office – Industrial – Hotels – Multi-Family – Student Housing – Single Tenant SBA Loans . Distressed REO Properties – Whole Loans …

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Real Estate | Gauntlet Commercial Real Estate Capital Closes $6 …

May 31, 2011

“We are looking for equity investors and property owners in downtown Los Angeles to possibly joint venture with or who are looking to sell,” said Elzufon.Gauntlet Commercial Real Estate Capital is a boutique investment …

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PCCP Partners With Principal Real Estate Investors to Acquire …

May 31, 2011

… real estate private equity firm focused on commercial real estate debt and equity investments. PCCP has over $6 billion under management in multiple closed-end funds and joint ventures with institutional investors. …

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Leo Hindery, Jr.: Note to Boeing’s Jim McNerney: All We Are Saying Is Give the Truth — and Your Union — a Chance

May 24, 2011

Back in 1969, John Lennon famously wrote, ” All we are saying is give peace a chance .” Well, here in May 2011, while labor peace is not always at hand, maybe we can at least give labor truth a chance. Unfortunately, telling the truth seems to be increasingly difficult for the CEOs of our multinational corporations when talking about “Making It In America” and saving and creating American jobs. And Exhibit A right now is Jim McNerney, who is the Chairman, President and CEO of the Boeing Company. The reason I am picking on Mr. McNerney is that he is defending Boeing’s decision to retaliate against its union workforce in Everett, Washington, by moving thousands of jobs to a non-union location in South Carolina, with statements that are among the most misleading and disingenuous by a major American CEO ever. And I’ve been around long enough to have heard a lot of statements by a lot of big company CEOs. Compounding my dismay with Mr. McNerney is that he also happens to currently hold a very senior economic advisory position in the Obama administration as head of the President’s “Export Council.” He holds this position of crucial influence despite the fact that for years he’s been exporting thousands of his American manufacturing jobs to Mexico and China. The facts of this dispute are pretty simple. As reported by Hal Weitzman and Jeremy Lemer in the Financial Times , ” nineteen [Republican] Senators are threatening to block President Barack Obama’s two appointments to the National Labor Relations Board…after the organisation filed a complaint last month against Boeing that seeks to force the manufacturer to transfer 787 production from the non-union factory in South Carolina to its unionised facilities in the Seattle region .” The NLRB believes that Boeing selected South Carolina — a right-to-work state — purely in retaliation for a strike in 2008 at the Everett facility. To attack the NLRB’s conclusion, Mr. McNerney, in a preferentially placed op-ed in the Wall Street Journal , said the following (the underscoring is mine): ” We viewed Everett as an attractive option and engaged voluntarily in talks with union officials to see if we could make the business case work. Among the considerations we sought were a long-term ‘no-strike clause’. “Despite months of effort…union leaders couldn’t meet expectations on our key issues. “We hold no animus toward union members, and we have never sought to threaten or punish them for exercising their rights, as the NLRB claims. About 40% of our 155,000 U.S. employees are represented by unions – a ratio unchanged since 2003 .” Now, for the truth: The most important right any union has is the right to strike. Without this right, what real opportunity does it have to ensure fair and balanced treatment for workers? Thus it is at once irresponsible for McNerney to make this unreasonable demand and disingenuous for him to then say that union leaders couldn’t meet his ” expectations on key issues .” As Christopher Corson, General Counsel of the International Association of Machinists and Aerospace Workers, wrote on May 9, “In every state in our nation, the law provides important protections for individual workers when they act together to improve their work lives for themselves and their families…If retaliation were permitted, there would be no protection.” McNerney says that ” Boeing never sought to threaten or punish [workers] for exercising their rights.” Yet the NLRB based its finding on the very specific comment by Boeing executives that ” avoiding strikes was a central reason for the decision .” Yes, ” 40% of Boeing’s [overall] U.S. employees ” today may be ” represented by unions “, and yes, this ratio may be “unchanged since 2003.” However, in the late ’60s when I was in college in Seattle and working nights as a Sheetmetal Workers journeyman, the number of Machinists and other union members working for Boeing in the greater Seattle-Everett area was around 22,000, and by the year 2000 it was around 50,000. Now just a decade later, with McNerney as CEO for the last five years, the number of union members at Boeing in the Pacific Northwest has shrunk to around 35,000, with at least 20,000 of these jobs having moved to China. In just 15 years or so, using an initiative benignly called “systems integration mode of production” which entails providing foreign suppliers and overseas subsidiaries with massive amounts of business knowledge, management practices, training and other intangible exports, Boeing has gone from producing nearly 100% of its commercial aircraft and parts in America to today producing only a small fraction of that work here. The workhorse 727 airframe, launched in 1963, had just a 2% foreign content; the 777 airframe, launched in 1995, has about 30% foreign content; the new 787 Dreamliner, officially launching this year, will have nearly 70% of its manufacturing content coming from foreign sources, with workers in Everett accounting for only about 4% of each aircraft’s value. This massive transfer by Boeing, and by almost every other American corporation committed to offshoring, of intellectual property that took decades to develop with internal investment and support from government-funded research laboratories will, with its massive ripple effects throughout our economy, ultimately be an even bigger ‘drain’ on America than even the direct offshoring of millions of American jobs over the last 15 years. Jim McNerney’s very public and cynical efforts, however, are just another egregious example of the broad opportunism that many American multinational corporation CEOs have embraced in their continuing efforts to offshore American jobs, cut the wages and benefits of the American workers whose jobs are not being shipped overseas, and, whenever they can, BUST UNIONS. As reported by David Wessel ( Wall Street Journal , 4-19-11), ” U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization’s effect on the U.S. economy. ” According to the Commerce Department, these companies cut their work forces in the U.S. by 2.9 million during the last decade while increasing employment overseas by 2.4 million, which is a big shift from the ’90s when they added 4.4 million jobs in the U.S. and 2.7 million abroad. In just the year 2009, they cut 1.2 million, or 5.3%, of their workers in the U.S. but only 100,000, or 1.5%, of their workers abroad. Three highlights: Between 2005 and 2010, General Electric, the nation’s largest industrial conglomerate and #6 on the Fortune 500 list, cut 28,000 workers in the U.S. but only 1,000 workers overseas. This notwithstanding that GE’s Chairman and CEO, Jeffrey Immelt, now heads President Obama’s “Council on Jobs and Competitiveness”, which is supposed to help create jobs in the United States and not ship them overseas. Cisco Systems Inc., the Fortune #62 company that makes networking gear, has also been creating jobs much more rapidly overseas. Over the past five years, it has added 21,350 employees overseas, but only 10,900 in the U.S. At the beginning of the last decade, 26% of Cisco’s work force was overseas; today, around 46% is. Oracle, the Fortune #96 company that makes business hardware and software, added twice as many workers overseas over the past five years as in the U.S. At the beginning of the last decade, it, like Cisco, had many more workers at home than abroad; today, however, around 63% of its employees are located overseas. McNerney and his fellow CEOs tout many global ‘differentials’ as the reasons why they’ve been economically ‘downgrading’ some jobs (with moves to South Carolina and other right-to-work states) and offshoring others (to China and elsewhere). Wessel further wrote that American multinationals repeatedly say in justification that it is the ” combination of the U.S. tax code, the declining state of U.S. infrastructure, the quality of the country’s education system, and barriers to the immigration of skilled workers [that is] making the U.S. less attractive to multinationals. ” Yet it is these very multinationals which every day support and maintain these differentials by: Fighting to preserve the corporate tax practices that favor overseas earnings and employees (read ” The Tax Man Cometh – Just Not For Everybody “); Resisting efforts to couple government infrastructure investments with ‘Made in America’ requirements that are no more demanding than every other member of the G-20 has for its own infrastructure investing; Fighting the adoption of our own Manufacturing & Industrial Policy, which we need in order to compete with the mercantilist practices of our major trading partners, often by blaming the relatively poor state of American public school education, which, while of grave concern, has absolutely no correlation; and Manipulating our immigration practices so that these companies can continue to hire employees from India, Taiwan and China at the expense of qualified American job seekers. At the end of the day, as I noted earlier, what’s really going on here is a massive, nation-wide attempt to bust unions in order to further enrich our nation’s multinational corporations. Yet this is happening at precisely the point in time when the United States needs millions more, not millions fewer, union jobs in order to stabilize our middle class. For our country to be ascendant again, American workers everywhere — at Boeing and hundreds of other major corporations — must be treated as the highly skilled, enormously productive and wealth-producing ‘assets’ they are. We need more union-made quality goods to sell abroad and many more union paychecks producing fair incomes here at home if we are to grow ourselves out of the dismal ongoing jobless recovery we are experiencing. Expanding union membership will be one of the surest signposts on the road back to a vibrant, consuming middle class, more income equality, and fairness in employment. And when we have all of this again, along with fairer trade practices, our nation will prosper as it did for the half century before unfair globalization and union-busting practices began to run amok twenty or so years ago. In all of our manufacturing industries — not just in aircraft manufacturing — we must ensure that American workers compete on level-playing fields. Right now, however, our workers are forced to compete against foreign workers, many of whom work for American multinational corporations, who are the indirect beneficiaries of illegal subsidies, massive currency manipulation and shameful environmental practices that swamp any measure of true country ‘comparative advantage’. All the while here at home, with very limited mobility in general but especially in this distressed economy, workers must confront the enormous power that multinational corporations’ almost unlimited geographic, capital and technology mobility gives them. The members of America’s unions are skilled, resilient and tenacious. They did not win the 40-hour work week, benefits and safer working conditions in one fell swoop. These integral pathways and others to the middle class lifestyle — a lifestyle that is now being challenged in so many of our cities and towns — were hammered out over years of negotiations with very powerful corporations. And sometimes these women and men had to strike to ensure fair dealing. But in exchange for their skills, hard work and productivity, these unionized workers produce real wealth that’s been shared for generations across our entire economy and society. I can’t envision a day when unions don’t represent the best path to fair and balanced dealing between companies and workers, for without union voices workers have little or no say in their future. And no worker anywhere should have to work without organizing protections, which is why Jim McNerney’s and Boeing’s demand that Boeing workers now agree to ” a long-term no-strike clause ” is so obviously unfair. Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.

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Equity Investment Services Sells Flowood Office Complex (REO)

May 23, 2011

  ORLANDO, FL— Nicholas Ledvora (top right photo)  and Christopher Savino middle  left photo) , Managing Directors with Equity Investment Services (EIS), successfully closed the sale of two bank owned office buildings totaling 29,274 square feet and located in Flowood, MS. Ledvora and Savino represented both the buyer and seller in the above referenced transaction. EIS brokered this transaction in association with Brandon Brown with TL Brown Properties of Jackson, MS.   “Like all distressed sales, this transaction was a great move for both the buyer and seller. Zions Bank was able to liquidate a non-performing asset and the buyer acquired a solid investment well below replacement value with plenty of upside.” said Ledvora on the transaction.   Mr. Ledvora and Mr. Savino are currently representing Zions First National Bank and other National lenders in a number of REO dispositions throughout the Southeastern United States.   Equity Investment Services is a full service commercial real estate investment advisory company based in Orlando, Florida. Our group was strategically created to serve the needs of its clientele.  EIS represents owners in the dispositions and acquisitions, leasing and professional management of shopping centers, office buildings, industrial properties, single tenant net leased investments and multi-family properties.   For more information, visit: www.EISRE.com .   Contact: Alana L. Champagne Operations Manager Director of Property Management Phone: 407.573.0711 ♦ Fax: 407.573.0710 Email: AChampagne@EISRE.com   or Nicholas Ledvora (o) 407/573-0711 nledvora@eisre.com Website: www.EISRE.com

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Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers

May 16, 2011

WASHINGTON — A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post. The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said. The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges. The federal audits mark the latest fallout from the national foreclosure crisis that followed the end of a long-running housing bubble. Amid reports last year that many large lenders improperly accelerated foreclosure proceedings by failing to amass required paperwork, the federal agencies launched their own probes. The resulting reports read like veritable indictments of major lenders, the sources said. State officials are now wielding the documents as leverage in their ongoing talks with mortgage companies aimed at forcing the firms to agree to pay fines to resolve allegations of routine violations in their handling of foreclosures. The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents. Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company — the nation’s largest handler of home loans — failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Back then, the bank said it was resuming foreclosures, having satisfied itself that prior problems had been solved. According to the sources, the Wells Fargo investigation concludes that senior managers at the firm, the fourth-largest American bank by assets, broke civil laws. HUD’s inspector general interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, the sources said. The investigations dovetail with separate probes by state and federal agencies, who also have examined foreclosure filings and flawed mortgage practices amid widespread reports that major mortgage firms improperly initiated foreclosure proceedings on an unknown number of American homeowners. The FHA, whose defaulted loans the inspector general probed, last May began scrutinizing whether mortgage firms properly treated troubled borrowers who fell behind on payments or whose homes were seized on loans insured by the agency. A unit of the Justice Department is examining faulty court filings in bankruptcy proceedings. Several states, including Illinois, are combing through foreclosure filings to gauge the extent of so-called “robo-signing” and other defective practices, including illegal home repossessions. Representatives of HUD and its inspector general declined to comment. The internal audits have armed state officials with a powerful new weapon as they seek to extract what they describe as punitive fines from lawbreaking mortgage companies. A coalition of attorneys general from all 50 states and state bank supervisors have joined HUD, the Treasury Department, the Justice Department and the Federal Trade Commission in talks with the five largest mortgage servicers to settle allegations of illegal foreclosures and other shoddy practices. Such processes “have potentially infected millions of foreclosures,” Federal Deposit Insurance Corporation Chairman Sheila Bair told a Senate panel on Thursday. The five giant mortgage servicers, which collectively handle about three of every five home loans, offered during a contentious round of negotiations last Tuesday to pay $5 billion to set up a fund to help distressed borrowers and settle the allegations. That offer — also floated by the Office of the Comptroller of the Currency in February — was deemed much too low by state and federal officials. Associate U.S. Attorney General Tom Perrelli, who has been leading the talks, last week threatened to show the banks the confidential audits so the firms knew the government side was not “playing around,” one official involved in the negotiations said. He ultimately did not follow through, persuaded that the reports ought to remain confidential, sources said. Through a spokeswoman, Perrelli declined to comment. Most of the targeted banks have not seen the audits, a federal official said, though they are generally aware of the findings. Some agencies involved in the talks are calling for the five banks to shell out as much as $30 billion, with even more costs to be incurred for improving their internal operations and modifying troubled borrowers’ home loans. But even that number would fall short of legitimate compensation for the bank’s harmful practices, reckons the nascent federal Bureau of Consumer Financial Protection. By taking shortcuts in processing troubled borrowers’ home loans, the nation’s five largest mortgage firms have directly saved themselves more than $20 billion since the housing crisis began in 2007, according to a confidential presentation prepared for state attorneys general by the agency and obtained by The Huffington Post in March. Those pushing for a larger package of fines argue that the foreclosure crisis has spawned broader — and more costly — social ills, from the dislocation of American families to the continued plunge in home prices, effectively wiping out household savings. The Justice Department is now contemplating whether to use the HUD audits as a basis for civil and criminal enforcement actions, the sources said. The False Claims Act allows the government to recover damages worth three times the actual harm plus additional penalties. Justice officials will soon meet with the largest servicers and walk them through the allegations and potential liability each of them face, the sources said. Earlier this month, Justice cited findings from HUD investigations in a lawsuit it filed against Deutsche Bank AG, one of the world’s 10 biggest banks by assets, for at least $1 billion for defrauding taxpayers by “repeatedly” lying to FHA in securing taxpayer-backed insurance for thousands of shoddy mortgages. In March, HUD’s inspector general found that more than 49 percent of loans underwritten by FHA-approved lenders in a sample did not conform to the agency’s requirements. Last October, HUD Secretary Shaun Donovan said his investigators found that numerous mortgage firms broke the agency’s rules when dealing with delinquent borrowers. He declined to be specific. The agency’s review later expanded to flawed foreclosure practices. FHA, a unit of HUD, could still take administrative action against those firms for breaking FHA rules based on its own probe. The confidential findings appear to bolster state and federal officials in their talks with the targeted banks. The knowledge that they may face False Claims Act suits, in addition to state actions based on a multitude of claims like fraud on local courts and consumer violations, will likely compel the banks to offer the government more money to resolve everything. But even that may not be enough. Attorneys general in numerous states, armed with what they portray as incontrovertible evidence of mass robo-signings from preliminary investigations, are probing mortgage practices more closely. The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures. A review of about 2,800 loans that experienced foreclosure last year serviced by the nation’s 14 largest mortgage firms found that at least two of them illegally foreclosed on the homes of “almost 50″ active-duty military service members, a violation of federal law, according to a report this month from the Government Accountability Office. Those violations are likely only a small fraction of the number committed by home loan companies, experts say, citing the small sample examined by regulators. In an April report on flawed mortgage servicing practices, federal bank supervisors said they “could not provide a reliable estimate of the number of foreclosures that should not have proceeded.” The review of just 2,800 home loans in foreclosure compares with nearly 2.9 million homes that received a foreclosure filing last year, according to RealtyTrac, a California-based data provider. “The extent of the loss cannot be determined until there is a comprehensive review of the loan files and documentation of the process dealing with problem loans,” Bair said last week, warning of damages that could take “years to materialize.” Home prices have fallen over the past year, reversing gains made early in the economic recovery, according to data providers Zillow.com and CoreLogic. Sales of new homes remain depressed, according to the Commerce Department. More than a quarter of homeowners with a mortgage owe more on that debt than their home is worth, according to Zillow.com. And more than 2 million homes are in foreclosure, according to Lender Processing Services. Rather than punishing banks for misdeeds, the administration is now focused on helping troubled borrowers in the hope that it will stanch the flood of foreclosures and increase consumer confidence, officials involved in the negotiations said. Levying penalties can’t accomplish that goal, an official involved in the foreclosure probe talks argued last week. For their part, however, state officials want to levy fines, according to a confidential term sheet reviewed last week by HuffPost. Each state would then use the money as it desires, be it for facilitating short sales, reducing mortgage principal, or using the funds to help defaulted borrowers move from their homes into rentals. In a report last week, analysts at Moody’s Investors Service predicted that while the losses incurred by the banks will be “sizable,” the credit rating agency does “not expect them to meaningfully impact capital.” ************************* Shahien Nasiripour is a senior business reporter for The Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 917-267-2335.

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Foreclosures Fall To 40 Month Low — Due To Paperwork Delays, Not Recovery

May 12, 2011

Foreclosure activity has fallen to a 40-month low, but not because of any recovery in the housing market, a new report finds. Rather, the slowdown comes from massive delays in processing foreclosure paperwork. In April, overall foreclosure filings — including default notices, scheduled auctions and bank repossessions — declined for the seventh month straight to 219,258, a 9 percent decrease from March and a 34 percent decrease from April last year. Banks seized 69,532 homes last month, a 5 percent drop from March, according to data provider RealtyTrac. “This slowdown continues to be largely the result of massive delays in processing foreclosures rather than the result of a housing recovery that is lifting people out of foreclosure,” said James J. Saccacio, chief executive officer of RealtyTrac, in a press release. Nationwide, foreclosures completed in the first quarter of the year took an average of 400 days from initial default notice to conclusion, up from the 340 days the process took last year and more than twice the average time — 151 days — it took to complete a foreclosure in the first quarter of 2007. In some states, that number soared higher. In New Jersey and New York, the average timeframe in the first quarter of this year was 900 days. In Florida, it was 619. With home prices still falling, a slowdown in foreclosures driven by paperwork delays is bad news for the overall housing market recovery. Home prices hit their lowest point in two years in April, falling 0.7 percent below March 2009 levels, according to a recent report by Clear Capital. Housing experts say the data from RealtyTrac’s report does not indicate a reversal of this trend will be quickly forthcoming. “As the servicers sort out their processing issues and staff up a little that means these homes will end up on the market as a distress sale and that will cause home prices to fall further,” said Celia Chen, a housing market analyst for Moody’s Analytics. “It delays the problem. It extends the recovery in the housing market,” Last fall, many of the nation’s largest lenders voluntarily halted home repossessions when flawed foreclosure practices came to light. On Wednesday, the Huffington Post reported that HSBC North America Holdings, the 12th-largest mortgage servicer in the U.S., will continue its moratorium on home seizures in some jurisdictions. According to the bank’s filings, the bank will not fully resume foreclosing on defaulted borrowers for a number of months. The Obama administration is now pushing for the creation of a federal account to help distressed borrowers and settle ongoing probes into faulty mortgage practices, the Huffington Post reported on Wednesday. There is still a large stock of homes in distress — at least 3.7 million homes are in a late stage of the foreclosure process, according to the report — and housing experts stress that processing these properties as quickly as possible is critical to the recovery of the housing market. “This is what frees up the economy to make forward progress and allows home prices to rise,” said Michael Englund, chief economist at Action Economics. “It will probably take about another year to work our way through the foreclosure mess.”

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Gordon Whitman: Day of Reckoning Coming Soon on Foreclosure Scandal

May 12, 2011

This is going to come as a big shock: Wall Street banks are manipulating the media in their campaign to avoid responsibility for throwing millions of people out of their homes and sending our economy into a tailspin. For months, the attorneys general from all 50 states have been investigating the big banks for fraudulent, criminal, and generally unconscionable behavior in their handling of mortgages and foreclosures across the country. On May 11, the American Banker which serves as a mouthpiece for Wall Street, reported incorrectly that the Attorneys General investigating dropped principal reduction from the terms of an emerging settlement. Principal reduction means adjusting mortgages to reflect homes’ current values — values reflecting the crash caused by the banks. Principal reduction would help reset the housing market and get our economy back on track, and it represents an essential component of a fair settlement. Fortunately, the story being peddled by the American Banker is inaccurate. Reports in the Wall Street Journal and the Huffington Post , suggest that the attorneys general haven’t given up on this key opportunity to hold big banks accountable and provide justice for millions of homeowners. But this effort to spread misinformation about principal reduction being off the table is part of a coordinated effort by Wall Street banks to confuse the public and push off the day of reckoning on their fraudulent foreclosures practices. This week, Zillow issued a report showing that housing values fell in the first quarter of 2011 in the biggest drop since 2008. A full 28 percent of mortgage holders in the U.S. — more than one quarter — now owe more on their mortgage than their home is worth. The primary cause for the continued slide in housing values? It’s the glut of foreclosed homes now flooding the market, thanks to the big banks’ foreclosure frenzy. The good news is that while Wall Street banks have been putting a full court press on the attorneys general to water down an eventual settlement, there’s been a coordinated national campaign to shine a light on the negotiations and make sure that homeowners and communities are protected. Groups like PICO, Alliance for a Just Society and National People’s Action have come together to fight against the big banks and for American families. To ramp up our campaign, we have formed The New Bottom Line — a coalition of community organizations, congregations, labor unions, and individuals working together to build a movement that puts the needs struggling and middle-class families and communities ahead the interests of Wall Street. In San Francisco on May 3, homeowners, clergy, and community leaders converged on the Wells Fargo shareholder meeting , demanding a new bottom line – one that puts homeowners and communities ahead of bank profiteering. They directly challenged Wells CEO John Stumpf to drop his opposition to loan modifications. This week in North Carolina, homeowners, clergy, community leaders and others descended on the Bank of America shareholder meeting to protest the big bank’s fraudulent handling of mortgages. In New York City, people are taking back Wall Street in a weeklong series of events targeting bank practices that driven cities and states into fiscal crisis. In coming days, community and faith leaders will be taking the same message and passion to the J.P. Morgan Chase shareholder meeting . Until banks are held accountable, these actions will continue. As of May 11, 2011, it’s been 864 days since the big banks caused our financial system to implode, and despite causing massive hardship for American families, these mega financial institutions have never wanted to be held accountable for anything. Fixing the mess they created in the housing market is no exception. We need our attorneys general to stand with homeowners, community leaders, clergy, and small businesses to hold banks accountable – not to the banks’ profit but to our new bottom line that puts people first. For more information and to join The New Bottom Line campaign, go to www.newbottomline.com .

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HSBC Continues Freeze On Home Seizures

May 11, 2011

HSBC North America Holdings, the ninth-largest U.S. bank by assets, told investors Wednesday that the bank’s moratorium on home seizures continues in some jurisdictions and it will be “a number of months” before the bank fully resumes foreclosing on defaulted borrowers. The lender did not specify in filings with federal regulators where it continues to restrict home repossessions or how many borrowers have been affected. HSBC handles more than 892,000 home loans, making it the 12th-largest mortgage servicer in the U.S., according to the Federal Reserve. The foreclosure freeze, which started last autumn, came on the heels of months-long criminal and civil probes by federal and state regulators into lenders’ faulty mortgage practices. The nation’s largest lenders voluntarily halted home repossessions when flawed document practices — like so-called “robo-signing” — came to light and erupted into a nationwide scandal. Officials subsequently found that the nation’s largest mortgage firms illegally seized the homes of at least dozens of borrowers and engaged in shoddy practices that allegedly deceived local courts, broke numerous state laws and federal rules, and short-changed distressed borrowers. HSBC, though, did not halt home seizures until after Nov. 5 , according to its filings with the Securities and Exchange Commission. Many of its competitors froze new foreclosures a few months earlier. HSBC’s two major U.S. subsidiaries, HSBC Finance Corp. and HSBC Bank USA , disclosed that its moratoria continue in certain parts of the country due to defective foreclosure practices. “We have resumed foreclosures on a limited basis in certain geographies,” the two divisions reported to investors. “It will be a number of months before we resume foreclosures in all jurisdictions as we need to ensure we are satisfied that applicable enhanced processes have been implemented.” HSBC initiated more than 43,000 home foreclosures in 2009 and 2010, according to the Fed. HSBC’s admission underscores the difficulty firms face trying to weed out faulty practices that went on for years before they were recently discovered. By taking shortcuts in processing troubled borrowers’ home loans, the nation’s five largest mortgage firms have saved more than $20 billion since the housing crisis began in 2007, according to a confidential presentation prepared for state attorneys general by the nascent Bureau of Consumer Financial Protection and obtained by The Huffington Post in March . That estimate, which did not measure HSBC’s savings, suggests that the nation’s largest banks reaped tremendous benefits by under-serving distressed homeowners, a complaint that appeared frequently enough that federal regulators finally acknowledged the industry’s fundamental shortcomings and took action. “We have already made several key procedural improvements to enhance our foreclosure processes as a result of our own internal reviews,” HSBC’s U.S.-based units disclosed in securities filings. Spokesmen for the firm did not immediately respond to a request for comment. In April, the lender was one of 14 mortgage firms to be sanctioned for their sloppy practices by the Fed and the Office of the Comptroller of the Currency. State attorneys general, Obama administration officials and representatives from the nation’s five largest mortgage firms — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — are meeting this week outside Washington, D.C. to discuss standards governing their treatment of delinquent borrowers and remedies for past abuses. Some state and Obama administration officials want to levy fines approaching $30 billion — a few officials want even larger fines. The targeted banks said Tuesday they’d collectively pay $5 billion to settle all claims . Government officials balked at the offer, according to sources involved in the discussions who spoke on the condition of anonymity.

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Government May Force Big Banks To Reduce Loan Balances For Distressed Homeowners

May 11, 2011

The nation’s five largest mortgage firms may be forced to reduce loan balances for distressed homeowners as part of an agreement with state attorneys general and the Obama administration to settle claims of faulty mortgage practices, a top state official involved in the negotiations said Tuesday. The proposal is part of a set of remedies banks would have to agree to in order to settle the state and federal probes launched last autumn, which found that the largest mortgage firms illegally seized the homes of at least dozens of borrowers and engaged in shoddy practices that short-changed troubled borrowers. Mortgage principal reductions would comprise part of a larger fine levied on Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial. Penalties could reach $30 billion, officials said. The forced reduction of mortgage principal as a penalty against flawed past practices has proven contentious. Some Republican attorneys general have objected, as have some Republican members of Congress. On Tuesday, however, a state official told The Huffington Post on condition of anonymity that the option “very much remains on the table.” While officials have not determined how much would be exacted from the banks — and specific dollar amounts to settle the probes have not yet been discussed between the state and federal governments and the banks — the proposal to compel financial firms to cut loan balances is part of one of two documents circulated Tuesday at a hotel in northern Virginia, where bankers, state officials and policy makers from the Obama administration began a three-day meeting. The targeted banks have argued vociferously, both in private discussions and in public, that they opposed cutting distressed homeowners’ principal balances. During meetings two weeks ago, representatives from such banks conducted a presentation which they claimed illustrated that mandating principal reductions would not prevent a significant number of new foreclosures and would be harmful to the general economy. The banks said “it would trigger a stampede of strategic defaults,” an official familiar with one of the two discussions said at the time, referring to instances in which borrowers who can afford to make good on their obligations choose not to. Strategic defaults are much more common in the business world than among homeowners, according to experts who study the issue. Homeowners generally feel a moral obligation to continue making their payments, whereas corporations view the breaking of contracts as pure business decisions. Government officials questioned the banks’ assumptions and fought back against their claims. The other document circulated Tuesday outlines standards that mortgage firms would have to adhere to for current and future borrowers, like forcing banks to ensure they have the right documentation when they move to repossess homes. The document was revised from an earlier draft first circulated in early March, The Huffington Post reported last week . The standards are a response to investigations launched last fall after the nation’s largest lenders voluntarily halted home seizures when faulty document practices — like so-called “robo-signing” — came to light, erupting into a nationwide scandal. Currently, no national standards govern how mortgage firms should treat borrowers who fall behind on their payments or default on their obligations. Congress has taken up the matter, and officials generally agree on how mortgage firms should treat borrowers. Tuesday’s bipartisan meeting included the Washington Attorney General Rob McKenna (R) and Colorado Attorney General John Suthers (R), who called in remotely. Top officials from Florida’s and Texas’ attorney general offices, both led by Republicans, attended, along with the Democratic attorneys general from Delaware, Iowa, Illinois, North Carolina and Connecticut. Top officials from the Treasury Department, Department of Justice and the Department of Housing and Urban Development were also present.

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Yvette Kantrow: Connect Some Dots

May 10, 2011

It seems as if every magazine on the face of the planet is seeking to redesign itself for a digital world, which mostly means littering their pages with arrows, bullet points, swooshes and other assorted doodads, all in an attempt to appeal to readers who consume much of their media via the Internet. (See Bloomberg Businessweek ). But one publication is taking the webification of its pages to the next level: Forbes , the one-time “capitalist tool”. While other magazines develop new sections, revamp covers, choose new typefaces and call it a redesign, Forbes is altering the very way it reports and delivers its stories with an eye toward making their consumption more of a social media-like experience. Exhibit A: a piece — really, a set of pieces — in the May 9 issue about Lynn Tilton, the unconventional head of distressed investor Patriarch Partners. Forbes warns readers up front that its Tilton feature is not “a traditional profile,” though it did start out as one. We learn that a Forbes reporter began talking to Tilton as a possible subject for the mag’s “World’s Billionaires” issue, but things quickly turned difficult. The reporter couldn’t understand how Tilton made her money; Tilton ” took umbrage ” at the reporter’s questions; nasty threats of lawsuits followed. Forbes threw more staffers on the case, who accumulated a “welter of material”. But Team Tilton, we are told, didn’t know what to do with all the information it had gathered. The solution: Forget writing a profile. (That’s so last century, not to mention a lot of hard work.) Instead, “let the story unfold” mostly on Forbes.com, by allowing different members of Team Tilton to give their different points of view, complete with comments from visitors to the website and from the subject herself; then run excerpts from the posts in the magazine. “The process of getting the story became the story,” coos the intro in the magazine (emphasis Forbes ‘). The result, according to the mag ( riffing on Wallace Stevens), is “13 Ways of Looking at Lynn Tilton.” Interesting, but really: Do we want to look at her 13 different ways? Reading through the magazine’s Tilton feature feels a bit like wading through a data dump; you’re given a lot of information — she won’t disclose her wealth; she’s being sued by lots of people; her collateralized loan obligations look troubled — but no real context in which to think about it. Unlike a traditional profile, this feature doesn’t try to explain to readers why they should care about Tilton, save for her outlandish wardrobe and the fact that she gave Forbes a hard time. There’s no real attempt to construct a compelling narrative that is informative, entertaining and has a definitive point of view (though the sheer amount of reporting resources Forbes devotes to this exercise does feel vindictive). Of course, one could argue the more viewpoints, the better. Who wants some snooty, biased, know-it-all journalist to tell us what to think? Just report; we’ll decide, thank you. But is that really what we want from magazines? From the media? Even from social media? Is it enlightening to know what other visitors to Forbes.com had to say about Tilton? Should we care? I don’t know the answers. And either way, you have got to give the folks at Forbes credit for really trying to change their magazine, rather than just settling for a few randomly placed arrows and doodads. Whether it will work is another question. Interestingly, a few weeks before Forbes hit the newsstands, another magazine, New York , ran its own , more traditional profile of Tilton. While it certainly didn’t provide 13 ways of looking at her, it did manage to paint a complex, in-depth and entertaining portrait of a woman who is not easily understood. The Forbes effort, by comparison, seems disjointed and confused. Maybe that’s the point. In a world of Twitter and Facebook, we like our information fast and raw, like the tweets from the newly famous 33-year-old computer programmer in Abbottabad who unwittingly microblogged the U.S. raid on Osama Bin Laden’s compound in real time. (Sample tweet: “Helicopter hovering above Abbottabad at 1AM (is a rare event).”) By his own admission, @reallyvirtual had no idea of the import of the events he was broadcasting to the world. That’s the difference between social media and the more traditional kind; between citizen journalists and their more professional brethren. As Forbes goes about its grand experiment, it might want to keep that in mind. See the complete archive of Media Maneuvers Yvette Kantrow is executive editor of The Deal magazine.

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Reports Of Mortgage Fraud Rose To Record Level Last Year

May 10, 2011

After the housing market crashed, reports of suspected mortgage fraud soared. As lenders, homeowners and brokers rushed to close deals, the process during the boom years was tainted by fakery, according to reports later submitted to the Financial Crimes Enforcement Network, an agency of the Treasury Department. The number of reports of suspected mortgage fraud rose to its highest level on record last year, as 70,472 reports were submitted to the government agency, according to a new release from the LexisNexis Mortgage Asset Research Institute. That’s nearly double the number of cases reported in 2006 when the market was at its peak, and it’s nearly 22 times the number of cases reported in 2000. From the LexisNexis release: Fraudsters thrive on inadequacies within lengthy loan-related processes and a lack of consistency across organizations and/or industries that help them hide their true motives. Technology has enabled faster loan production through automation, ease of processing, and analytics. Industry professionals have keen knowledge of those processes, which makes it much easier to manipulate protocols in place to thwart adverse activities. The number of verified cases of mortgage fraud declined from 2009 to 2010, but that’s partially attributable to a decline in the number of new loans, the LexisNexis report says. Reports of suspected fraud increased nearly 5 percent during that period. Homeowners and investors have filed numerous lawsuits against mortgage companies, claiming that crucial mortgage documents were misplaced or even forged. Some of these suits have been successful, bolstered by testimony from bank employees. In a widely cited example, an employee of the lender now owned by Bank of America testified in a New Jersey court in 2009 that her company regularly held onto mortgage notes even as the loans were sold to investors, contradicting what contracts usually require. Without a note, a bank cannot prove it has a right to foreclose on a home; homeowners have used the absence of a note to contest foreclosures. Likewise, a missing note compromises the legal rights of an investor in a mortgage security, a situation that has prompted some investors to sue the banks that sold them the securities. But it’s not just the banks who have been accused of fraud. The Wall Street Journal describes a practice some brokers allegedly used, in which they would get artificially low valuations of distressed homes, and then help a buyer sell those homes for a profit. Homeowners, too, have been accused of misstating their income on mortgage documents. One borrower is now serving a 21-month prison sentence for mortgage fraud, the New York Times reported. The chiefs of the lenders that helped fuel this boom, meanwhile, have largely escaped punishment. Examples of alleged fraud extend to the foreclosure process as well. When it came out last fall that employees at foreclosure processing companies would sign thousands of foreclosure documents daily without even reading them, some of the county’s biggest lenders temporarily halted their foreclosures. The nation’s five biggest mortgage lenders — Bank of America, Wells Fargo, Citigroup, JPMorgan Chase and Ally Financial — have been accused of wrongfully foreclosing on homeowners and improperly handling mortgages. All 50 state attorneys general along with the Obama administration are working to reach a settlement deal. Fines could reach $30 billion , The Huffington Post reported.

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Obama Administration, State Officials Expected To Give Banks New Mortgage Terms

May 6, 2011

WASHINGTON — The Obama administration and state officials are expected to offer the nation’s five largest mortgage firms updated terms next week in ongoing negotiations over a settlement regarding the firms’ faulty treatment of borrowers , according to three people with knowledge of the government plan. As part of their discussions to settle months-long state and federal probes into shoddy mortgage practices and wrongful foreclosures, the new terms are expected to incorporate suggestions offered by the banks in response to an earlier term sheet circulated in early March by state and federal officials. Bankers said the original terms were too stiff; investors said they didn’t go far enough. Consumer advocates said they were a good start. The new term sheet will mark another attempt to get bankers and policymakers on the same page regarding the treatment of borrowers who fall behind on their mortgage payments or default on their obligations. But it is not expected to detail any fines to be meted out in response to banks’ flawed practices, which include improper home seizures and other actions that broke federal and local laws. Officials also remain undecided on a possible mandate to banks to reduce borrowers’ loan balances , according to the three sources, who were not authorized to speak publicly about the matter. Banks are reluctant to slash mortgage principal balances ; some agencies in the Obama administration want to require it, as do most of the state attorneys general leading their mortgage probe. A vocal minority — all Republicans — are opposed. On April 28, the disagreement played out during meetings held in Washington. State and federal officials held two in-person meetings with bankers, with many state officials calling in from their respective states. Representatives of the five firms — JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Ally Financial — made a presentation which they claimed showed why mandating principal reductions would not prevent a significant number of new foreclosures and would be harmful to the general economy . The banks said “it would trigger a stampede of strategic defaults,” said an official familiar with one of the two discussions, referring to instances in which borrowers who can afford to make good on their obligations choose not to. Strategic defaults are much more common in the business world than among homeowners, according to experts who study the issue. Government officials questioned the banks’ assumptions, which were partly based on data from the Obama administration’s signature foreclosure-prevention initiative, the Home Affordable Modification Program, according to people familiar with the meetings. HAMP, which seeks to reduce monthly payments, is primarily known for its lackluster results. But the bankers and government officials did not discuss the size of potential fines, nor did they address the mortgage firms’ push for release from legal liability for their unlawful actions in their treatment of borrowers and pursuit of home repossession. The nation’s largest lenders voluntarily halted home seizures last autumn after faulty document practices — like so-called “robo-signing” — came to light, erupting into a national scandal. Federal and state investigations began shortly afterward. Now, the top law enforcement officers in some states, most notably New York Attorney General Eric Schneiderman, want to make sure they are not constrained in taking legal action against mortgage firms for violations of state and local laws. Some have grown frustrated with the pace of negotiations, people familiar with the matter say, and fear a broad release from legal liability will likely be sprung on them at the last minute as a condition of their settlement with the targeted banks. Attempts to begin discussions over the liability release have thus far been thwarted, however. Also at issue are potential fines. The Department of Housing and Urban Development and the Bureau of Consumer Financial Protection are looking to impose penalties on the five firms nearing a total of $30 billion, according to people familiar with the matter. The Federal Deposit Insurance Corporation has suggested levying at least $20 billion in penalties. Other federal agencies have suggested amounts closer to $5-10 billion, with the banks open to fines just under that range. Some state officials are pushing for more than $30 billion. However, the size of possible fines was not discussed Thursday, people familiar with the discussions said. This week, Bank of America , Wells , JPMorgan and Citigroup said they collectively could shell out as much as $11.8 billion in litigation losses beyond amounts that they’ve already set aside , regulatory documents filed with the Securities and Exchange Commission show. By taking shortcuts in processing troubled borrowers’ home loans, the nation’s five largest mortgage firms have saved more than $20 billion since the housing crisis began in 2007, according to a confidential presentation prepared for state attorneys general by the nascent Bureau of Consumer Financial Protection inside the Treasury Department and obtained by The Huffington Post in March . The estimate suggests that the nation’s largest banks have reaped tremendous benefits from underserving distressed homeowners, a complaint frequent enough among borrowers that federal regulators have repeatedly acknowledged the industry’s fundamental shortcomings. The dollar figure provides a basis for regulators’ internal discussions regarding how best to penalize Bank of America, JPMorgan, Wells, Citigroup and Ally. Much of the money would go towards reducing troubled homeowners’ mortgage payments and lowering loan balances for underwater borrowers, who owe more on their home than it’s worth. This week, 33 Democratic members of Congress signed a letter sent to Attorney General Eric Holder and Iowa Attorney General Tom Miller (D), urging them to extract a meaningful settlement with the targeted banks. “In the communities we represent, and in others across the country, the flagrant disregard for the law and predatory practices by lenders and servicers have imposed substantial hardships on both homeowners and their neighbors,” the letters read. “We hope that, as these talks proceed, you will work to protect the rights of those harmed by these practices, provide meaningful immediate relief to homeowners, hold lenders and servicers accountable for any unlawful practices that they engaged in, and ensure that, in the future, the practices that brought about this crisis will not reoccur.”

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BofA Plans To Triple Its Centers For Struggling Homeowners

May 6, 2011

Bank of America announced Thursday that it will create dozens of new service centers to work with distressed homeowners in cities around the country, including in the Washington area.

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New Home Sales Inch Up From Rock Bottom

April 25, 2011

Sales of new homes rose slightly in March after reaching a record low in February, bolstering hopes among economists and home builders that the housing market’s multi-year decline has finally hit rock bottom. New home sales — tabulated when contracts are signed — grew 11.1 percent in March to a seasonally-adjusted rate of 300,000, according to estimates released Monday by the Census Bureau. Last month, only 270,000 new homes were sold, the lowest number recorded since the government started tracking the data in 1963. Housing experts say that some of the March increase reflects catch-up from February and January, when bad winter weather delayed home sales and construction projects. Although the 11 percent monthly growth is welcome, new homes sales are still down a staggering 21.9 percent from March of 2010. The median sale price for a new home was $213,800, up 2.9 percent from $207,700 in February, but down 4.9 percent from the March of last year. Analysts are awaiting a Tuesday release of the closely watched S&P/Case-Shiller index of home prices in the 20 largest US cities, which is expected to show a 0.4 percent decline since February. “With existing homes being sold at much more competitive prices, the demand for newly built properties will recover only very gradually,” Capital Economics, a London-based research firm, wrote in response to the latest data. Meanwhile, a separate report indicates that nearly half of the housing market is now made up of distressed properties. “It’s certainly a case that we’re establishing a pretty solid bottom for how low [home sales] can go,” said Michael Englund, chief economist at Action Economics. “The outlook is pretty bleak for housing, but not as bad as we thought a month ago. It does appear that without any sort of big outside shock, things are not going to get any worse.” Last month showed several mildly encouraging signs that the housing market may be on the mend: existing home sales and new home construction both increased slightly in March. Even so, President Obama said last week that housing is “probably the biggest drag on the economy right now.” Englund and others who think the housing bust has finally bottomed out argue that the general uptick in economy will eventually translate to a pick-up in home sales. “I look more to the housing market being pulled by the rest of the economy, and therefore I’m counting on the housing market moving forward because the rest of the economy is moving forward,” said David Crowe, chief economist of the National Association of Home Builders. First time home buyers, Crowe argues, will begin buying more as the job market improves. In the past year, the national unemployment rate has dropped from 9.7 to 8.8 percent — but much of that decrease has come from Americans dropping out of the labor force entirely . “We still have a sizable pool of people waiting to enter the job market, and that’s just one more factor hanging over the head of the housing market. People that quit looking for jobs are probably also not looking for a new home,” Englund said. Englund points to employment as the key to improving the housing market, saying businesses have to start hiring again. “What’s unusual in this recovery cycle is that the business community remains remarkably terrified,” Englund said. “By year three, that’s usually when the business starts to go gangbusters. I’ve never seen such a spooked economy at this state of the cycle.”

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