Posts Tagged ‘bank’
People have an amazing ability to justify anything in their minds. ‘Abilities’ is defined in the free dictionary as “The quality of being able to do something, especially the physical, mental, financial, or legal power to accomplish something.” Our emphasis is on the financial. (perhaps it should be on the power to accomplish something?) Positive proof exists and suggests that one can be asleep, miss critical factors, destroy their company, and still walk away a bonus, although slightly embarrassed. Take the case of Northern Rock.
Hillary Rodham Clinton’s campaign manager, Maggie Williams, earned about $200,000 on the board of a Long Island subprime lender that charged prepayment penalties — a practice that Clinton, a critic of the subprime industry, now seeks to eliminate.
Katherine M. Porter, a University of Iowa law professor, examined 1,700 recent Chapter 13 bankruptcy cases filed in 24 states, including Georgia. She discovered that mortgage lenders regularly fail to file documents required by law and that fees and charges billed to homeowners often are unreasonable.
One point is perfectly clear after the subprime debacle, which is the need for federal-level regualtors that will actually do something. Finger pointing is frustrating for consumers and mortgage holders. Recently we received a report of a mortage holder who was bounced from the OCC to the FTC, later to be told that the FTC gathers complaints but does not take action on individual complaints.
The excesses of the current ‘subprime’ era are not the only excesses with ties to structured finance transactions. Many banks were sued by Enron Corporation. Enron filed suit in September 2003 against 11 banks, accusing them of conspiring with former Enron officials to manipulate the energy company’s finances. Enron says the banks helped set up a series of structured finance transactions with Enron that buried the company in debt, forcing it into bankruptcy. Every bank settled and paid Enron.