Bank of America to settle Countrywide discrimination suit for $335 million
Matthew Borghese – AHN News Contributor
Washington, DC, United States (AHN) – Bank of America (BoA) will settle a dispute with the U.S. Justice Department stemming from home loan discrimination. Authorities say BoA’s Countrywide unit discriminated against 200,000 African-American and Hispanic borrowers who qualified for prime loans but were nonetheless pushed to sign riskier subprime loans.
“At the core of the allegations in the complaint is a simple story: If you were African-American or Hispanic and you went to Countrywide for a loan, and you were qualified, you likely paid more simply because of the color of your skin,” Assistant Attorney General Thomas E. Perez said Wednesday.
“They understood marketing and how to build trust… they exploited that trust,” Perez explained. “‘Se habla espanol,’ they said in Latino communities, and two-thirds of our victims are Hispanic.”
“In our complaint, we allege that from 2004 to 2008 Countrywide engaged in a nationwide pattern or practice of discrimination based on race or national origin. The period in question represented the height of the housing bubble, and it is appropriate to focus on this time frame because abusive practices were most pervasive, and often unchecked,” Perez added.
Now, BoA will settle with the Justice Department and pay $335 million to compensate those who were effected.
Fitch downgrades world’s top banks
Diane Alter – AHN News Reporter
New York, NY, United States (AHN) – Citing “increased challenges the financial markets face,” Fitch Ratings on Friday downgraded several of the world’s leading banks.
The agency said in a statement, “Fitch Ratings has today taken rating actions on nine global trading and universal banks (GTUBs). The actions complete its assessment of the GTUBs, carried out in conjunction with a broad review of the ratings for the largest banking intuitions in the world. Fitch has downgraded eight insurers’ Viability Ratings (VRs) and affirmed one, removing them from Rating Watch Negative where they were placed on Oct. 13, 2011.”
While Fitch believes that overtime market conditions are expected to ease, it expects market volatility to remain above historical averages and economic growth in developed markets to remain sluggish for an extended period. This will make many business lines in securities operations more trying due to lower activity and higher funding costs.
The global banks downgraded are: Bank of America, Barclays plc, BNP Paribas, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Societe General, and UBS.
Eurozone crisis pushes Swiss to lower economic growth forecast
Linda Young – AHN News Writer
Geneva, Switzerland (AHN) – The worsening eurozone crisis caused Swiss government officials Tuesday to lower the nation’s expected economic growth forecast for 2012.
They now predict that the gross domestic product will only grow by 0.5 percent instead of the 0.9 percent previously forecast.
However, the government remains optimistic that Switzerland will not experience a recession as long as the eurozone crisis does not become worse. They forecast economic expansion of 1.8 percent for 2011, which is still down from the 2.7 percent recorded in 2010
Nevertheless, there is ongoing concern over recession and deflation.
The Swiss National Bank has acted to weaken the Swiss franc since summer, citing those concerns. The central bank acted after investors drove up the value of the franc because they viewed it as a safe currency.
Central bank officials set a floor exchange rate of 1.2 Swiss francs to the euro in September, which helped Swiss exporters. Government officials forecast export growth for 2012 will drop to 0.4 percent from 3.4 percent for this year.
Analysts now wonder if the Swiss National Bank will act to weaken the Swiss franc again. However, the central bank has not yet made any announcement regarding the matter.
Equitalia tax officer injured in Rome parcel bomb attack
AHN News Staff
Rome, Italy (AHN) – Just two days after Deutsche Bank received a parcel bomb, Rome’s tax collection office said that a letter bomb exploded in the agency, shattering a glass desktop and causing injuries to one of its directors, Marco Cuccagna.
Italian far-left group Federazione Anarchica Informale (FAI) claimed responsibility for both the attacks. It said that it sent the first one to Deutsche Bank headquarters in Frankfurt on Wednesday.
The police managed to intercept the first one sent to Deutsche Bank’s chief Josef Ackermann. Police said that they recovered a letter by FIA along with the package, which promised three more attacks later this month at unidentified locations.
Doctors treating Cuccagna said that they successfully removed glass pieces from his eyes but were still attending to a hand injury.
In a statement to Italian news agency ANSA, Equitalia official Angelo Coco said, “We believe Equitalia has been the victim recently of a denigration and disinformation campaign.”
49ers, city of Santa Clara announce loan deal for new stadium project
John Nestor – AHN Sports Correspondent
Santa Clara, CA, United States (AHN Sports) – The San Francisco 49ers might need a name change soon.
The 49ers and the City of Santa Clara announced Friday that they have secured funding for a new stadium project. Santa Clara is about 45 miles south of San Francisco.
The two sides announced that Goldman Sachs, Bank of America-Merrill Lynch and U.S. Bank have agreed to an $850 million loan with the city’s stadium authority and the 49ers.
The money will cover most of the estimated $1 billion project with funding from the National Football League, a hotel tax and city redevelopment funds expected to make up the difference.
The goal is to open the new stadium in 2015 and that goal is closer to becoming reality now that the loan for the project has been secured.
“It’s like first-and-goal from the 9-yard line,” said Ron Garratt, a consultant helping lead the project for the city. “We think we’re going to score from here.”
More than just a word game
New York, NY, United States (IRIN) – While poor countries are jostling to ensure the lives of their people are protected in a deal on the changing climate being negotiated in Durban, various NGOs, agencies and research institutes are lobbying to get a word into the negotiating text. They include groups who are keen on the words “nutrition security,” and others who want to ensure that “women and children” feature in the text each time the word “vulnerable” appears.
“It is not opportunistic. We are pushing for the empowerment of women and the recognition of the words ‘nutrition security’ – by that we are addressing so many issues at the same time,” said Cristina Tirado, director of the Centre for Public Health and Climate Change at the US-based Public Health Institute.
“Protection and promotion of nutrition and health are essential components of climate-resilient and sustainable development,” she added. “Women serve as agents of change. Through their unique roles in the family and child care, agricultural labor, food and nutrition security, health and disaster risk reduction, they can be instrumental in addressing climate change, health and nutrition in an integrated way.”
In the developing world women are almost entirely responsible for growing the food for their households, according to the UN Food and Agriculture Organization (FAO). Yet only 10 to 20 of every 100 land owners is a woman, says the World Bank’s World Development report 2012, which focused on gender equality and empowerment.
[lLnk for the World Bank report: http://web.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTWDRS/EXTWDR2012/0,,contentMDK:22850821~pagePK:64167689~piPK:64167673~theSitePK:7778063,00.html]
The weight of words
Including such words in the text of the proposed climate change deal can translate into money for programs related to them, says Jazmin Burgess, a climate change policy and research officer with the UN Children’s Fund (UNICEF). Women and children are the most vulnerable segment of any society – children even more so – she maintains.
UNICEF and Burgess were involved in a long battle to ensure the word “children” featured in the text on the proposed new Green Climate Fund, set up to provide money for those most vulnerable to a changing climate.
Recent research has shown women and children are more likely than men to die from natural hazards. A study of-1 countries found that more women than men die from natural hazards, the World Bank says in their report.
UNICEF notes that some of the leading killers of children – malnutrition, cholera, diarrhea, dengue fever, malaria – are highly sensitive to climate change. Any funds for programming on any of these issues would now ensure that children were targeted, said Burgess.
Tirado has been lobbying for some years for the inclusion of the words “nutrition security” and is among various organizations and forums – the UN Standing Committee on Nutrition (UNSCN), the World Food Program (WFP) and NGO Action Against Hunger (ACF) – that have written a paper to position women as the catalyst in delivering nutrition security and health in a world becoming more difficult to live in because of climate change. [link for the paper:
Tirado hopes the significance given to empowering women in the Durban talks will influence countries to develop especially the aspects addressing nutrition and health issues in their National Adaptation Plans.
Empowering women and children works
Catherine Zanev, from Climate Change and Disaster Risk Reduction at WFP, said the agency’s experience in emergencies has shown that “in the hands of women, food is far more likely to reach the mouths of needy children. Whenever possible, WFP therefore distributes food and cash to women in emergencies, empowering them to better manage crises.”
By doing this, aid agencies not only ensure their programs are more effective but also have a long-term impact on improving the status of women, said Harjeet Singh, climate expert at Action Aid International. “So it is a win-win for all.”
The move has worked. Zanev cited the management of communal granaries constructed by WFP in Cameroon’s dry north, left almost entirely in the hands of women.
“After one year of operation of the granaries, the number of hectares cultivated and the level of food production had increased significantly, contributing also to social stability, as it encouraged the male work force to stay in the community. No more emergency operations have been necessary in the region since setting up the community granaries.”
Denise Coitinho Delmuè, executive secretary of the UNSCN said it was “very important that things are done simultaneously to be mutually reinforcing, empowering women for taking a catalytic role in improving nutrition. It therefore requires that from the analysis and design phases of nutrition programming, women take center stage.”
She cited examples of such programs from Brazil, which managed to reduce its malnutrition levels by 70 percent in six years. Women’s literacy classes concentrate on nutrition, including information on preparing traditional and indigenous food.
Local school feeding programs in Brazil buy produce from small scale farmers who are mostly women and mothers of children at the school.
UNICEF’s Burgess says climate change education among school children in parts of Asia has helped to spread awareness in societies with a high population of illiterate adults.
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– Provided by Integrated Regional Information Networks.
Massachusetts sues five big banks over foreclosures
Matthew Borghese – AHN News Contributor
Boston, MA, United States (AHN) – The Bay State has taken the lead in an ambitious lawsuit against five major banks over the foreclosure crisis that has struck the American economy. Massachusetts Attorney Gen. Martha Coakley has filed charges against Bank of America, Citi, GMAC, JPMorgan Chase, and Wells Fargo in Suffolk Superior Court. The suit also names Mortgage Electronic Registration System (MERS) as a defendant.
“The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis,” Coakley said. “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law. Our action today seeks real accountability for the banks illegal behavior and real relief for homeowners.”
Among the complaints, Massachusetts charges “the banks used false documentation in the foreclosure process, including so-called ‘robo-signing,’ whereby bank personnel signed affidavits that were untrue, or not based on the signor’s actual knowledge… By October 2010, the banks’ flagrant disregard of affidavit and notary process requirements became widely known.”
The suit also alleges “Ibanez violations” stemming from foreclosures without legal authority, charges of undermining public records, and misrepresenting loan modification programs.
Bank of England warns U.K. banks that eurozone crisis poses biggest threat
Linda Young – AHN News Writer
London, United Kingdom (AHN) – The head of the Bank of England issued a strongly worded warning to United Kingdom banks to get their financial houses in order to shield themselves from repercussions from the eurozone credit crisis.
Although the UK is not on the euro, the crisis in the 17-member nation eurozone could seriously affect the UK.
Governor Sir Mervyn King said the eurozone financial problems posed the largest threat to UK banks. King said the eurozone crisis presented a “significant and immediate threat to UK financial stability” and could cause a second credit crunch.
He warned UK banks to develop contingency plans in case of a break-up in the eurozone.
King warned the banks to raise more funds, by cutting bonuses to staff and dividend payments to shareholders. However, he said they should not stop lending to households and businesses.
Deputy governor Paul Tucker also warned banks, saying the situation represented an exceptional peril in which conditions could degrade to allow virtually anything to happen.
King, speaking in his role as chair of the interim Financial Policy Committee (FPC), the Governor told commercial banks that they must build up their reserve funds in order to serve as increased insurance against potentially catastrophic developments in the eurozone.
While strongly advising banks to continue lending while cutting staff bonuses and shareholder dividends, the committee suggested issuing new shares to raise capital for reserves if necessary.
Foreclosure Contractors Face New Scrutiny From States
United States (ProPublica) – by Marian Wang
While federal and state officials investigating flawed foreclosures have largely focused on holding the banks accountable and bringing relief to wronged homeowners, officials in a few states have begun targeting the more obscure middlemen of the foreclosure scandal.
Prosecutors in California and Illinois have sent subpoenas to Lender Processing Services, one of the largest firms that processed mortgage documents for the banks. (Read more about LPS in our guide to who’s who of the foreclosure scandal.)
As we’ve noted, the firm—which helps handle more than half of all U.S. mortgages—has been accused of using the same “robo-signing” practices as the major banks, such as signing and notarizing documents that appeared inaccurate or invalid. Bank employees have testified under oath that they relied on LPS to vet the information in foreclosure documents.
LPS has had its share of legal troubles over its mortgage processing. Michigan’s attorney general announced an investigation last month into potentially fraudulent mortgage documents processed by an LPS subsidiary. (LPS has said that it discontinued the practices used by the subsidiary.) Along with the big banks, the firm recently received an order from federal regulators to correct problems with its processing of mortgage documents. (Read that consent order.)
Illinois Attorney General Lisa Madigan also sent a subpoena to Nationwide Title Clearing, another firm contracted to provide mortgage services to banks. As we’ve noted, Nationwide Title Clearing employees have testified to robo-signing thousands of mortgage documents—known as assignments—that establish the ownership of a mortgage loan and are key to establishing who has the right to foreclose on a homeowner.
Nationwide Title Clearing said in a statement that its procedures have been “thoroughly audited and examined for accuracy” and that it would cooperate with any investigation. LPS declined to comment.
The latest actions on foreclosure problems as an attempted comprehensive settlement by all 50 state attorneys general has hit a few roadblocks. As we noted in our cheat sheet on bank investigations, the negotiations have been hampered by disagreement with the banks over the size of penalties as well as some disagreement among the attorneys general—at least eight of whom have opposed any settlement that would require banks to cut borrowers’ mortgage debt.
Bloomberg reports today that Bank of America has also received independent scrutiny from the attorneys general of Utah and Connecticut accusing the firm of invalid foreclosures and insufficient loan modifications. Utah warned that it would sue.
– Provided by ProPublica.org
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