61 Billion Outflow of Bonds

http://www.marketwatch.com/story/dumping-your-bond-funds-read-this-first-2013-07-01

Washington Post: “‘Act of Congress’: How Barney Frank foiled the banking lobby to form a new financial watchdog”

http://www.washingtonpost.com/business/economy/act-of-congress-how-barney-frank-foiled-the-banking-lobby-to-form-a-new-financial-watchdog/2013/05/05/94d93ed2-b0eb-11e2-9a98-4be1688d7d84_story.html

WSJ: Fannie’s Windfall Blurs Debate Over Its Fate

Fannie's Windfall Blurs Debate Over Its Fate

http://online.wsj.com/article/SB10001424127887323611604578398273539675906.html

WSJ: Mortgage Gamble Pays Off for Wells

Mortgage Gamble Pays Off for Wells

http://online.wsj.com/article/SB10001424127887323511804578298314242546302.html?mod=itp

NAR Economist: Home Prices to Rise 15% in 3 Years

NAR Economist: Home Prices to Rise 15% in 3 Years
http://blogs.wsj.com/developments/2012/11/09/nar-economist-home-prices-to-rise-15-in-3-years/

RBS Instant Messages Show Libor Rates Skewed for Traders

Royal Bank of Scotland Group Plc trader Tan Chi Min told colleagues the firm was able to move global interest rates, according to court filings.

Transcripts of the internal instant messages were included in a 231-page affidavit filed Sept. 19 by Tan, the bank’s former Singapore-based head of delta trading for Asia, who’s suing Britain’s third-biggest lender by assets for wrongful dismissal after being fired last year for allegedly trying to manipulate the London interbank offered rate, or Libor.

“Nice Libor,” Tan said in an April 2, 2008, instant message with traders including Neil Danziger, who also was fired by RBS, and David Pieri. “Our six-month fixing moved the entire fixing, hahahah.”

The conversations among traders at RBS and firms including Deutsche Bank AG (DBK) illustrate how the risk of abuse was embedded in the process for setting Libor, the benchmark for more than $300 trillion of securities worldwide. RBS, 81 percent owned by the British government, is one of at least a dozen banks being probed over allegations they colluded to manipulate the rate so they could profit from bets on interest-rate derivatives.

Barclays Plc (BARC), Britain’s second-biggest lender, was fined 290 million pounds ($470 million) in June for rigging the rate. Chief Executive Officer Robert Diamond and Chairman Marcus Agius resigned in the aftermath.

Singapore Suit

RBS sent Tan copies of instant-message chats he had with others as evidence of potential wrongdoing in an Aug. 29, 2011, letter telling him the bank was bringing disciplinary proceedings against him, the papers show. Tan said in his lawsuit, filed in December, that the bank had condoned the rates manipulation and sought scapegoats in an internal probe.

The bank asked in a Sept. 24 filing that the Singapore High Court seal the papers until at least one of the probes by the U.S. Commodity Futures Trading Commission, the Department of Justice’s fraud division and Britain’s Financial Services Authority is completed.

Making the documents publicly accessible may have “extensive potential prejudice” on the confidential regulatory investigations, RBS said in the filing. The court documents, inspected yesterday, have now been sealed.

“Our investigations into submissions, communications and procedures relating to the setting of Libor and other interest rates are ongoing,” the bank said in an e-mail. “RBS and its employees continue to cooperate fully with regulators.”

‘Mixed Feelings’

Libor is calculated by a poll carried out daily on behalf of the British Bankers’ Association that asks firms to estimate how much it would cost to borrow from each other for different periods and in different currencies. The BBA signaled yesterday it will give up oversight of the rate. The top and bottom quartiles of quotes are excluded, and those left are averaged and published for individual currencies before noon in London. RBS is among 13 banks that set yen Libor.

“What’s the call on Libor,” Jezri Mohideen, then the bank’s head of yen products in Singapore, asked Danziger in an Aug. 21, 2007, chat.

“Where would you like it, Libor that is,” Danziger asked, according to a transcript included in Tan’s filings.

“Mixed feelings, but mostly I’d like it all lower so the world starts to make a little sense,” another trader responded.

“The whole HF world will be kissing you instead of calling me if Libor move lower,” Tan said, referring to hedge funds.

‘Maybe More’

“OK, I will move the curve down 1 basis point, maybe more if I can,” Danziger replied.

Danziger and Pieri declined to comment. Mohideen, who was put in charge of the bank’s rates trading for Europe and the Asia-Pacific region in 2010, didn’t respond to messages left on his mobile telephone and his office.

In another conversation on March 27, 2008, Tan called for RBS to raise its Libor submission, saying an earlier lower figure the bank submitted may have cost his team 200,000 pounds.

“We need to bump it way up high, highest among all if possible,” Tan said.

Tan also asked for a high submission in an Aug. 20, 2007, instant message to Scott Nygaard, global head of RBS’s treasury markets in London.

“We want high fix in 3s,” Tan said in the message. “Neil is the one setting the yen Libor in London now and for this week and next.”

“Go Neil,” Nygaard responded. “Hahahaha.”

More E-mails

Managers including Nygaard, Todd Morakis, the Singapore- based head of trading for emerging markets, who joined in June 2010, and Lee Knight, the Tokyo-based chief operating officer of global trading, knew derivatives traders were making regular requests to change rates, Tan said in his lawsuit. He’s seeking to force RBS to release more e-mails that he says show the bank condoned the activity.

Nygaard and Morakis declined to comment.

Knight said he didn’t believe that managers including Mohideen, Nygaard or Morakis would have turned a blind eye if they knew traders tried to influence the bank’s rate-setters, according to minutes of an Oct. 17, 2011, meeting he had with an RBS disciplinary manager cited in Tan’s filing. Knight didn’t respond to phone and e-mail messages.

RBS traders also spoke about Libor with counterparts at other firms, Tan’s filing shows.

‘Cartel Now’

“It’s just amazing how Libor fixing can make you that much money or lose if opposite,” Tan said on an Aug. 19, 2007, conversation with traders at other banks, including Deutsche Bank’s Mark Wong. “It’s a cartel now in London.”

“Must be damn difficult to trade man,” Wong replied. “Especially you not in the loop.”

Michael Golden, a spokesman for Frankfurt-based Deutsche Bank, cited previous statements made by the company that it is continuing its investigation into the matter and cooperating with authorities. Golden said Wong declined to comment.

Tan started expressing misgivings about the Libor-setting process in May 2011 as regulators began investigating potential rate-rigging across the industry and RBS started its own internal probe, the transcripts show.

“This whole process would make banks pull out of Libor fixing,” Tan said in a May 16, 2011, chat with money markets trader Andrew Smoler. “Question is what is illegal? If making money if bank fix it to suits its own books are illegal… then no point fixing it right? Cuz there will be days when we will def make money fixing it.”

“Regulators need to be seen to be doing something but what negative thing can come to this?” Smoler, who declined to comment for this story, said according to the transcript.

The case is Tan Chi Min v The Royal Bank of Scotland. S939/2011. Singapore High Court.

To contact the reporters on this story: Andrea Tan in Singapore at atan17@bloomberg.net; Gavin Finch in London at gfinch@bloomberg.net; Liam Vaughan in London at lvaughan6@bloomberg.net

To contact the editors responsible for this story: Douglas Wong at dwong19@bloomberg.net; Edward Evans at eevans3@bloomberg.net

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Rethinking Reverse Mortgages

Rethinking Reverse Mortgages
http://online.wsj.com/article/SB10001424052702304373804577521062800205588.html

Bank of America Global Settlement

Details here about the principal reduction through Bank of America Department of Justice Settlement Announcements: http://homeloanhelp.bankofamerica.com/en/principal-reduction-announcement.html

$25 billion agreement provides homeowner relief & new protections, stops abuses

http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2012/SettlementFeb92012

“…At least $10 billion will go toward reducing the principal on loans for borrowers who, as of the date of the settlement, are either delinquent or at imminent risk of default and owe more on their mortgages than their homes are worth. At least $3 billion will go toward refinancing loans for borrowers who are current on their mortgages but who owe more on their mortgage than their homes are worth. Borrowers who meet basic criteria will be eligible for the refinancing, which will reduce interest rates for borrowers who are currently paying much higher rates or whose adjustable rate mortgages are due to soon rise to much higher rates”

 

Tax Assesment Appeal Works!

Last year I disputed my taxes with the Montgomery County Board of Assessment Appeals stating that home prices had lowered and that my taxes should be lowered.  About 10 months later, I received a $150 check in the mail from my mortgage bank due to an overage on the cushion.  I’m going back to appeal for a second year in a row this week and hopefully the benefits will be similar.  It’s interesting to note that when my taxes increase, the mortgage holder increases my the escrow portion of mortgage payment, yet, when the taxes decrease, they just cut a check back, rather than decreasing my monthly payment (which would have been my preference).