Nevada Sues LPS
By Aljandro Lazo, Los Angeles Times, Dec. 16, 2011
Nevada has filed suit against a major player in the foreclosure business, Lender Processing Services, claiming the company is responsible for perpetrating widespread consumer fraud in the Silver State. The lawsuit against Florida-based LPS and several of its subsidiaries alleges that the company falsified, forged or fraudulently filed “countless” documents in foreclosure cases across the Silver State, requiring employees to execute or notarize as many as 4,000 foreclosure documents a day. Click here to read the LPS lawsuit.
Living By Default
By James Surowiecki, New Yorker, Dec. 19, 2011
We normally say that a company “went bankrupt,” implying that it had no choice. But when, recently, American Airlines filed for bankruptcy, it did so deliberately. The airline had four billion dollars in the bank and could have kept paying its bills. But it has been losing money for a while, and its board decided that it was foolish to keep throwing good money after bad. Declaring bankruptcy will trim American’s debt load and allow it to break its union contracts, so that it can slim down and cut costs.
SEC Charges Ex-Fannie, Freddie CEOs With Fraud
By Dereck Kravitz, BusinessWeek, Dec. 16, 2011
The Securities and Exchange Commission on Friday brought civil fraud charges against six former top executives at Fannie Mae and Freddie Mac, saying they misled investors about risky subprime loans that mortgage giants held when the housing bubble burst. Those charged include the agencies' two former CEOs, Fannie's Daniel Mudd and Freddie's Richard Syron. They are the highest-profile individuals to be charged in connection with the 2008 financial crisis.
Treat Foreclosure As A Crime Scene
By Matt Stroller, Politico, Dec. 15, 2011
Bubbling under the surface of politics is the foreclosure crisis — where the power of big finance is brushing up against the rule of law. The party leaders seem to have decided it is essentially a giant — but unavoidable — tragedy. GOP presidential candidate Mitt Romney said foreclosures have to clear for the housing market to reset. The Obama administration, meanwhile, has spent only about $2 billion of the $75 billion authorized for the Home Affordable Modification Program.
Home Builders Happier, Stocks Not So Much
Home Builders Are a Little Happier, But Home-builder Stocks Are Not
By Mark Gongloff, Dec. 19, 2011
The National Association of Home Builders’ housing-market confidence index rose to 21 from 19, the NAHB said a little while ago, a couple of points higher than expected.