fixing the financial system - HuffPost Fund Special Investigation

Hard Times Update: Readers Share Tales of Foreclosure Schemes, Mortgage Misfortune

Amanda Zamora — Tue, 09 Mar 2010 22:34:57 +0000

Send Us Your Tips and 'Bandit Sign' Photos Read more »

Another Wall Street Bonus Tax Falters in Congress

Ben Protess — Tue, 09 Mar 2010 16:53:37 +0000

Bill Faces Industry Opposition and Skepticism from New York Senators

Editor's Note: The bonus tax failed Tuesday. See full story. Read more »

Profiting From Recession, Payday Lenders Spend Big to Fight Regulation

Keith Epstein — Tue, 02 Mar 2010 15:05:20 +0000

Industry Steps Up Lobbying as Senate Grapples With Financial Reform

The influential $42 billion-a-year payday lending industry, thriving from a surge in emergency loans to people struggling through the recession, is pouring record sums into lobbying, campaign contributions, and public relations – and getting results. Read more »

Consumer Complaints Soar on Mortgage 'Rescue' Schemes

Ben Protess — Wed, 24 Feb 2010 16:42:42 +0000

VIDEO: FTC Consumer Chief To Fraudsters: 'I Want to Put You in Jail'

As many Americans sank deeper into financial trouble last year, a record number reported that they fell victim to schemes seeking to profit from their misfortune, according to a federal report released Wednesday. Read more »

HARD TIMES PROFITEERS: Help Us Investigate 'Signs of Deception'

Ben Protess — Fri, 19 Feb 2010 02:36:53 +0000

Article Lede:

Drive through most any city in America and the offers will leap out at you: "Repair Your Credit!" "Modify Your Loan!" "Sell Your House Quick!"

The creators of these signs -- Hard Times Profiteers, as we at the Huffington Post Investigative Fund have dubbed them -- are moving to capitalize on the financial troubles of others. They are posting advertisements on walls, street lamps and bus shelters. The ads range from handwritten cardboard cutouts to printed plastic signs. Read more »

VIDEO: Senate Deal on Consumer Agency in Doubt

Ben Protess — Wed, 03 Feb 2010 23:28:53 +0000

Has President Obama’s plan to create a new consumer financial protection agency died on Capitol Hill? That may turn on whether two key senators can make a deal.

Over the last several months, the Investigative Fund has been tracking the agency's topsy turvy journey through Congress. The House in December narrowly approved a bill that would create an independent agency – the CFPA -- to oversee and write rules for consumer credit products such as mortgages and credit cards. Now the Senate Banking Committee is working on its own version of financial regulatory reform. Read more »

Victim of a Real Estate Scheme? Tell Us Your Story

Amanda Zamora — Wed, 03 Feb 2010 16:08:45 +0000

It’s a no-brainer: As people lose their jobs and struggle to pay the mortgage, they are increasingly vulnerable to those looking to make a quick profit off their troubles.

The Huffington Post Investigative Fund would like to shine a light on real estate schemes going on around the country. How widespread are these activities? Who is behind them? And who is getting hurt? Read more »

Additional Authors:

Ben Protess

Lagan Sebert

Congressman to AIG: Show Us Your E-mail

Ben Protess — Fri, 29 Jan 2010 20:09:19 +0000

You might imagine that by now the public would know every last cause and consequence of the government’s $180 billion bailout of insurance giant American International Group. Read more »

FDIC Responds to I-Fund Story on Sheila Bair's Bank of America Mortgages

Investigative Fund Staff — Sat, 23 Jan 2010 00:10:01 +0000

Below is a statement received Jan. 22, 2010, from the Federal Deposit Insurance Corp. regarding the Jan. 21 article by the Huffington Post Investigative Fund about FDIC chair Sheila Bair. Responses from the Investigative Fund are in red. Read more »

FDIC Chief Got Bank of America Loans While Working On Its Rescue

Keith Epstein — Thu, 21 Jan 2010 15:14:17 +0000

Agency Grants Sheila Bair Retroactive Ethics Waiver on Mortgages

Sheila Bair, one of the chief regulators overseeing Bank of America’s federal rescue, took out two mortgages worth more than $1 million from the banking giant last summer during ongoing negotiations about the bank’s bailout and its repayment.

In the weeks between the closings on her two mortgage loans, Bair met with Bank of America’s chief negotiator in the bailout talks. Read more »

FDIC Statement Regarding Sheila Bair's Dealings with Bank of America

Investigative Fund Staff — Thu, 21 Jan 2010 15:10:26 +0000

In response to inquiries from the Huffington Post Investigative Fund about FDIC chair Sheila Bair's dealings with Bank of America, Andrew Gray, Director of the FDIC Office of Public Affairs, provided the following statement on Jan. 15, 2010: Read more »

What's Still Hidden in AIG's Files?

Ben Protess — Fri, 15 Jan 2010 19:26:14 +0000

Company Trustees, Lawmakers Resist Calls for More Disclosure

As federal hearings into the cause of the financial crisis got underway this week, attention has focused on one key outstanding question: Whether the giant insurer American International Group committed fraud in the run-up to its $182 billion bailout. Read more »

VIDEO: Barney Frank: Consumer Reforms at Risk in Senate

Lagan Sebert — Thu, 07 Jan 2010 16:42:45 +0000

Financial reform legislation faces an uncertain future in the Senate where Republicans stand opposed to creating a new consumer protection agency. Rep. Barney Frank (D-Mass.), who ushered a financial overhaul through the House last month, explains how the agency was tempered in his bill and may not survive the Senate. President Obama has said creating the agency is a must. » Related Story: Dodd’s Departure Could Endanger Potential Consumer Agency Read more »

Dodd’s Departure Could Endanger Potential Consumer Agency

Ben Protess — Thu, 07 Jan 2010 15:18:06 +0000

It’s the question buzzing around Washington and Wall Street this week: Will Sen. Christopher Dodd’s sudden retirement announcement further jeopardize his already thorny task of overhauling the nation’s financial regulatory system?

At risk in particular, some Capitol Hill observers say, may be a proposal to create a new consumer protection agency that President Obama has characterized as a must for financial reform. Read more »

WaMu's Fateful Decision

David Heath — Wed, 23 Dec 2009 19:57:05 +0000

Executives at Washington Mutual made a fateful decision as a white-hot mortgage market turned ice cold in the fall of 2003.

WaMu's chief executive, Kerry Killinger, decided to reignite profits by aggressively pushing the lender’s riskiest but most profitable loans, including the Option ARM and subprime mortgages. Read more »

VIDEO: The Fate of a Subprime Loan: Can This Man Hold On to His Mortgage?

Amanda Zamora — Tue, 22 Dec 2009 15:25:41 +0000

Video Lede:

Eliseo Guardado came legally to the United States in search of his own American Dream. But after he bought his home in a Maryland suburb in 2006, his dream quickly became a nightmare. Long Beach Mortgage, a subsidiary of Washington Mutual, put him in a loan that he could not afford. The story of this one bad loan helps tell a bigger tale- how fraud in the loan process was at the center of the largest bank failure in American history.

Second of two articles about the roots of the subprime lending bubble.

With the housing boom still in full force in early 2006, Long Beach Mortgage Co., one of the nation’s biggest subprime lenders, sent its eager Wall Street investors yet another package containing thousands of new home loans. Read more »

By Christine MacDonald
Special to Huffington Post Investigative Fund

VIDEO: William K. Black's Theory of Corporate Fraud

Lagan Sebert — Mon, 21 Dec 2009 15:41:13 +0000

William K. Black is a former senior deputy chief counsel at the federal Office of Thrift Supervision. During the savings and loan crisis of the late 1980s Black investigated accounting fraud. He spoke with Huffington Post Senior Reporter David Heath about how fraud can infiltrate entire corporations. » Related Story: At Top Subprime Mortgage Lender, Policies Were Invitation to Fraud Read more »

At Top Subprime Mortgage Lender, Policies Were Invitation to Fraud

David Heath — Mon, 21 Dec 2009 15:20:36 +0000

Long Beach Mortgage Employees Say Firm Routinely Ignored Warnings

First of two articles about the roots of the subprime lending bubble.

Diane Kosch had one of the most thankless jobs in the subprime lending craze.

Sitting elbow to elbow with colleagues at a conference table in a northern California office building, Kosch’s job was to review a huge stack of loans each day at Long Beach Mortgage for problems, including evidence of fraud. She was given 15 minutes per file. Read more »

Barney Frank vs. the Credit Raters

Ben Protess — Fri, 18 Dec 2009 19:02:37 +0000

Financial Services Chair Got Tough Measures Passed, Some Want Tougher

After deftly dodging federal regulation for years, the nation’s top credit rating companies now must get past the formidable Barney Frank.

Last week, as the U.S. House debated the Wall Street reform package crafted largely by Frank, the Massachusetts Democrat quietly slipped regulations into the bill that would force the most significant overhaul of the credit rating industry to date. Read more »

How One Bank Failure Illustrates Lapses by Regulators

Keith Epstein — Mon, 14 Dec 2009 20:25:41 +0000

Overseers of Florida Bank Noted Risky Lending But Failed to Act

Article Lede:

Stalled real estate developments have transformed the once-pastoral landscapes around Ocala, Fla. MORE PHOTOS: For Banks and Builders: First Bonanza, Then Bust (U.S. Geological Survey/Google Earth)

Even by the distorted standards of the national housing bubble, north central Florida was a hot market. Between 2004 and 2006 new houses and property markers spread across cow pastures and horse farms, their values soaring so fast that bankers and builders could hardly believe their good timing, or keep up with the workload. Read more »

Courts Examine Credit Raters' 'Intimate' Relationship With Bankers

Ben Protess — Fri, 04 Dec 2009 20:51:52 +0000

Documents Provide Window Into Raters' Role in Structured Finance

Editor’s Note: This is the last of three articles by the Investigative Fund on the credit rating companies.

A decade ago, the nation’s largest credit-rating companies developed a new line of business that boosted their profits and sent them on a hiring spree. They began rating complex investments that featured large packages of bonds sometimes based on subprime mortgages. Read more »

Federal Regulator Gets Derivatives Advice From Industry Insiders

Keith Epstein — Wed, 18 Nov 2009 20:15:36 +0000

Advisory Group to Commodities Commission Dominated by Finance Lobbyists, Execs

Like many federal agencies contemplating reform these days, the Commodities Futures Trading Commission is hearing a lot from the industry it regulates.

But executives and lobbyists don’t always have to knock on the commission’s door. Some are already inside. Read more »

How Credit Raters Fended Off Oversight From Congress and SEC

Ben Protess — Wed, 11 Nov 2009 19:49:16 +0000

Editor’s Note: This is the second of three articles by the Investigative Fund on the credit rating companies. Read the first article here.

When the nation’s top credit rating companies came under attack in Washington in recent years, Charles E. Schumer often emerged as their strongest ally. Read more »

When Banks Fail, So Do Those Promised CD Rates

Keith Epstein — Tue, 03 Nov 2009 18:21:36 +0000

FDIC Allows New Owners to Slash Interest Payments on Deposits

Norma Jean Scott, a 63-year-old Alabama retiree, thought she was being prudent three years ago when she stashed her $100,000 retirement nest egg in a pair of certificates of deposit. Her bank, CapitalSouth, promised her 5.7 percent interest for five years.

“I thought that was in concrete,” she said, “and backed by my government.”

But then CapitalSouth collapsed and the government brokered a deal to sell its business to another institution -- Louisiana-based IberiaBank.

The bank’s new owner promptly cut Scott’s interest rate – to 1.6 percent. Read more »

Under Attack, Credit Raters Turn to the First Amendment

Ben Protess — Wed, 28 Oct 2009 21:57:50 +0000

Editor's note: This is the first of three articles by the Investigative Fund on the credit rating companies.

For two decades, the nation’s top credit rating agencies have managed to fend off a crackdown from Washington by relying on a surprising ally – the First Amendment. Read more »

Top Derivatives Regulator: 'We Haven’t Filled the Gaps'

Ben Protess — Wed, 07 Oct 2009 19:06:27 +0000

Gary Gensler, the top regulator of the commodities markets, sees the U.S. financial system still “vulnerable” to the murky world of privately negotiated derivatives.

As chairman of the U.S. Commodities Futures Trading Commission (CFTC), Gensler wants to comprehensively oversee the trading of these complex financial contracts for the first time.
Read more »