116-year-old Mexican pensioner too old for bank software — not allowed welfare check for 3 months

Mexico News Daily

❝ Born at the turn of the past century, Maria Félix is old enough to remember the Mexican Revolution – but too old to get the bank card needed to collect her monthly 1,200 pesos ($63) welfare payment. Félix turns 117 in July, according to her birth certificate, which local authorities recognise as authentic. That would put her in the ranks of the world’s oldest living people.

❝ She went three months without state support for poor elderly Mexicans after she was turned away from a branch of Citibanamex in the city of Guadalajara for being too old, said Miguel Castro, development secretary for the state of Jalisco. Welfare beneficiaries now need individual bank accounts because of new transparency rules, Castro said.

“They told me the limit was 110 years,” Félix said with a smile in the plant-filled courtyard of her small house in Guadalajara.

❝ Félix, who sells candies from a stand outside her home, got by on her modest sales but was delighted when Castro became aware of her case, delivering a cheque and an apology to her in person. “Sooner or later, God provides,” said Felix, waving a hand. “Here I am.“

In an emailed statement, Citibanamex, a unit of Citigroup Inc, said Félix’s age exceeded the “calibration limits” of its system and it was working to get her the bank card as soon as possible. It said it was adjusting its systems to avoid a repeat of the situation.

And some banks run their IT department with the help of someone’s out-of-work nephew rather than a qualified professional. My Canadian password manager issued a qualitatively new version of their software, yesterday. One significant bug was discovered. It was patched, this morning, with an update identified as Version xxx001. Definitely fewer employees than Citibank’s Citibanamex.

Nope. Solutions to problems like this come down to considering customer service more important than disturbing the slumbers of some beancounter.

Liar loans redux — They’re back!

The pitch arrived with an iconic image of the American Dream: a neat house with a white picket fence.

But behind that picture of a $2.95 million home in Manhattan Beach, California, were hints of something darker: liar loans, those toxic mortgages of the subprime era.

Years after the great American housing bust, mortgages akin to the so-called liar loans — which were made without verifying people’s finances — are creeping back into the market. And, like last time, they’re spreading risks far and wide via Wall Street.

Today’s versions bear only passing resemblance to the ones that proliferated in the mid-2000s, and they’re by no means as widespread. Still, they reflect how the business is starting to join in the frenzy that’s been creating booms in everything from subprime car loans to junk-rated company bonds.

The Manhattan Beach story — how the mortgage on that house was made and subsequently packaged into securities with top-flight credit ratings — recalls a time when borrowers, lenders and investors all misjudged the potential danger…

…Federal regulations put in place following the crash effectively outlawed liar loans. Under so-called ability-to-pay requirements, lenders must take specific steps to ensure homebuyers actually can afford the mortgages. If they don’t, homeowners can sue and potentially win damages that can dwarf the value of the homes.

But in a throwback to subprime times, Velocity and other specialty lenders routinely offer certain mortgages with limited reviews, if any, of borrowers’ finances. That’s because the rules exempt mortgages made for “business purposes.” The setup lets borrowers avoid typical paperwork, in return for paying higher mortgage rates…

Chris Farrar, Velocity’s chief executive officer, says his company takes steps to ensure customers really are buying homes for business purposes…“Our goal is to never make a consumer loan,” Farrar said. Velocity’s lawyers have advised the company, previously known as Velocity Commercial Capital, that its processes would put it on solid ground even if it somehow failed to weed out inaccurate applications, he said…

Representatives for Nomura and Citigroup declined to comment…

It’s difficult to say how far the problems might go, but industry experts agree that mortgage lending is nowhere near as sloppy as it was during the last go-round, which created a bust that produced about 6 million foreclosures…

To Jeffrey Naimon, a partner at BuckleySandler, the real danger would be if unscrupulous mortgage brokers once again encouraged homebuyers to get in over their heads.

RTFA. We witnessed the same hustle last time – just before the tsunami of the Great Recession swamped millions of Americans in debt and unemployment. No one seriously at the top did time. No one suffered much more than a golden parachute to another Wall Street job.

Hear anyone in our fiscally-responsible, Republican-controlled Congress letting out a peep this time?

The $9 billion witness — JP Morgan’s worst nightmare

Alayne Fleischmann

Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn’t take it anymore.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.'”

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She’s had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing…

Six years after the crisis that cratered the global economy, it’s not exactly news that the country’s biggest banks stole on a grand scale. That’s why the more important part of Fleischmann’s story is in the pains Chase and the Justice Department took to silence her…

This past year she watched as Holder’s Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called “statements of facts,” which were conveniently devoid of anything like actual facts.

And now, with Holder about to leave office and his Justice Department reportedly wrapping up its final settlements, the state is effectively putting the finishing touches on what will amount to a sweeping, industrywide effort to bury the facts of a whole generation of Wall Street corruption. “I could be sued into bankruptcy,” she says. “I could lose my license to practice law. I could lose everything. But if we don’t start speaking up, then this really is all we’re going to get: the biggest financial cover-up in history.”

I won’t try to edit this superb Taibbi article down to something that fits the front page of a blog post. RTFA.

Suffice it to say Matt Taibbi has taken Alayne Fleischmann’s inside information about joint corruption between Wall Street Banks and our so-called department of Justice to whitewash syndicated crime on a scale never before seen. It brought us the Great Recession, an economic crash sufficient to sink the American economy absent the frantic and creative Keynesian scrambling and dispensing of billion$ in loans to keep the rolling disaster afloat.

It’s long and loaded with firsthand details. The details our government and most of our Free Press has been smothering with sound bites and sleight-of-hand for years.

Citigroup whistleblower refused to be intimidated — she’s awarded $31 Million

Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason.

She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska. Over the next 30 years, Hunt moved up the ladder to mortgage-banking positions in Indiana, Minnesota and Missouri…

In November 2004, Hunt, now 55, joined Citigroup as a vice president in the mortgage unit. It looked like a great career move. The housing market was booming, and the New York- based bank, the sixth-largest lender in the U.S. at the time, was responsible for 3.5 percent of all home loans. Hunt supervised 65 mortgage underwriters at CitiMortgage’ sprawling headquarters in O’Fallon, Missouri, 45 minutes west of St. Louis.

Hunt’s team was responsible for protecting Citigroup from fraud and bad investments. She and her colleagues inspected loans Citi wanted to buy from outside brokers and lenders to see whether they met the bank’s standards. The mortgages had to have properly signed paperwork, verifiable borrower income and realistic appraisals.

Citi would vouch for the quality of these loans when it sold them to investors or approved them for government mortgage insurance…

Continue reading

Whistleblower wins $18 million in bank foreclosure fraud

Attorney Lynn Szymoniak had spent a career investigating insurance fraud when a bank moved to foreclose on her Florida home in 2008. Almost four years later, the fraud she said she uncovered by combing through mortgage documents earned her $18 million.

Szymoniak, 63, is among six whistle-blowers who will pocket $46.5 million as part of a $25 billion national foreclosure settlement that state and federal officials reached in February with five banks, including Bank of America and JPMorgan Chase, according to the U.S. Justice Department.

“When they did this to her, they picked the wrong person at the wrong time in the wrong place,” Richard Harpootlian, Szymoniak’s attorney in two whistle-blower cases, said in an interview. “They stuck their hand into the beehive.”

Szymoniak’s examination, in which she relied on her experience as an insurance-fraud investigator, led to her claims against banks for submitting fraudulent documents to the federal government asserting that they owned loans insured by the Federal Housing Administration, she said.

The national foreclosure settlement with the five banks, which resolves claims of abusive foreclosure practices, provides mortgage relief to borrowers, pays $1.5 billion to those who lost their homes to foreclosure, and sets standards for how the banks service mortgage loans.

As part of the agreement, whistle-blower claims are being settled for about $228 million, according to court papers filed in federal court in Washington. A group of six whistle-blowers will receive $46.5 million out of that amount, said Alisa Finelli, a Justice Department spokeswoman…

Her work quickly uncovered widespread document fraud in the mortgage industry, she said, and eventually led to the filing of her whistle-blower cases in 2010.

The settlement underscores the benefits provided to taxpayers from whistle-blowers and the incentives for those who expose fraud through so-called qui tam cases, Brandon Peak said.

“This is what qui tam actions are for — to incentivize people to come forward and expose fraud,” he said. “The taxpayers actually receive this money back that they never would have received absent these whistle-blowers….”

When Barack Obama signed the Fraud Enforcement and Recovery Act in May 2009 he put a doomsday weapon in the hands of employees and ordinary citizens with information that would blow the whistle on corporate crime and fraud. This is the act that put these rewards into the hands of Lynn Szymoniak and her peers.

That doesn’t diminish her courage in facing down the banks involved in her foreclosure. RTFA for details and anecdotes. Worthwhile reading.

Citigroup bailout to deliver $12.3bn profit to U.S. taxpayers

The US treasury expects to net $312.2m on Monday when it sells the rest of its stake in Citigroup. The government holds 465.1m warrants in Citi that entitle it to purchase common shares in the banking group. The warrants, which it is auctioning, represent the remaining part of the US government’s $45bn investment in Citi during the financial crisis.

Taxpayers are expected to end up with a $12.3bn profit on the bailout, made under the troubled asset relief programme (TARP). The treasury sold its 34% stake of common shares of Citi last year.

“As we exit our investments in private companies and recover taxpayer dollars, it’s clear that the cost of the Tarp programme will be a fraction of what many had once feared during the depths of the crisis,” said Tim Massad, the treasury’s acting assistant secretary for financial stability.

The Tarp bailout is proving to be less expensive to taxpayers than first feared. The US government made $13.5bn selling its stake in General Motors. Last week the government chose four Wall Street banks to sell its stake in American Insurance Group (AIG), recipient of $180bn in bailout funds. The sale could be the largest in US history. AIG has already paid back significant chunks of the debt…

In his latest quarterly report, Neil Barofsky said “on the financial side, Tarp’s outlook has never been better. Not only did Tarp funds help head off a catastrophic financial collapse, but estimates of Tarp’s ultimate direct financial cost to the taxpayer have fallen substantially,” from $341bn in August 2009 to $25bn in November 2010.

Save a copy of this post for the next time your friendly neighborhood Tea Party nutball starts raving and ranting about how the socialist policies of the bailout were bankrupting the United States.

The U.S. Treasury is walking out of the remnants of Bush’s Great Recession smelling like a rose – the most successful bank in America.

Of course, you’ll have to point out 14 more sources for the information on repayment and the resulting profits. There isn’t anyone in the KoolAid Party who knows what actually is happening in the world of commerce.

Citigroup gets greenlight to pay back $20 billion bailout

Daylife/AP Photo used by permission

Citigroup has been given the go-ahead by the US treasury to repay its $20bn of government bailout money, a day after President Barack Obama accused Wall Street institutions of handing back funds simply in order to escape curbs on multimillion dollar bonus payouts.

The US bank, which teetered on the brink of collapse at the height of the financial crisis last year, is one of the few major US banks still supported by taxpayers’ funds. Its repayment plan follows a similar move earlier this month by Bank of America, leaving Wells Fargo as the last nationwide bank yet to institute repayment.

To raise the money, Citigroup intends to issue $20.5bn of stock and debt.

In total, the treasury pumped $45bn into Citigroup to prevent the bank from collapsing, although $25bn of this was converted into a 34% stake. The government, which has benefited from a 20% appreciation in Citigroup’s share price, said it will sell its shares in an “orderly fashion” over the next 12 months.

The plunge in Citigroup’s fortunes during the worst of the crisis was so severe that the bank was ejected from the blue-chip Dow Jones Industrial Average. Its share price slipped 4% on Monday as investors anticipated dilution in their holdings by Citigroup’s plan to issue a large amount of new stock.

I don’t give investment advice – though I’ve been having a good year – so, I have no suggestions about how to treat Citi’s stock issue.

I’m certainly pleased to see that taxpayers will be making 20% on our share of this TARP bailout.