Post by soonerlew on Nov 15, 2007 14:38:25 GMT -5
interesting read: Posted by welsdra on millionaies board...
www.nypost.com/seven/11152007/business/insulted_judges_revenge_174283.htm?page=0
INSULTED JUDGE'S REVENGE
DEUTSCHE BANK LOSES KEY SUBPRIME FORECLOSURE CASE
November 15, 2007 --
A ticked off federal judge in Cleveland could complicate the subprime mortgage mess.
In a recent ruling, Judge Christopher Boyko tossed out a bunch of real estate foreclosure claims made by Deutsche Bank because he said the Wall Street firm couldn't prove that it was the owner of the property.
Worse for Deutsche Bank, a trustee for the mortgages, Judge Boyko took exception when the bank's attorney claimed the jurist just didn't understand how the complicated mortgage business works.
Boyko's ruling came last month but is just now coming to light on Wall Street.
The judge - who sits on the bench in the U.S. District Court for the Northern District of Ohio - said Deutsche Bank "alleges it is the holder and owner of the note and mortgage."
"However, the attached note and mortgage identify the mortgagee and promisee as the original lending institution," the judge wrote.
Most mortgages are sold these days to investors.
A bank will lend money to someone who wants to buy real estate. But then the bank usually takes the loan and sells it to Wall Street.
Wall Street puts that loan together with many others and creates a security that is sold to investors. Often homeowners don't even know this transaction has taken place because they continue to send their monthly payments to the bank that granted them the mortgage.
Right now, Wall Street is having a difficult time because too many homeowners with iffy credit are defaulting on their mortgages and causing the securities sold around the world by Wall Street to lose value or become worthless.
The only recourse that the Wall Street firms have is to foreclose on the properties on which the original loans were written.
If Judge Boyko's decision stands up to appeal, retrieving assets through a foreclosure could be more difficult.
And while Wall Street and the banking community could obviously fix the paperwork problem, the Boyko ruling could complicate pending foreclosures.
Deutsche Bank had no comment.
In a footnote to the ruling, Judge Boyko said "Plaintiff's 'judge, you don't under stand how things work,' argument re veals a conde scending mindset and quasi-monopo listic system where financial institutions have traditionally controlled, and still control, the foreclosure process." Ouch!
*
What was behind the big stock market rally this past Tuesday? Answer: it wasn't what you think. The market decided to look on the bright side, thanks to a drop in the price of oil, good earnings news from Wal-Mart and an announcement by Goldman Sachs that it doesn't have the same problems as everyone else on Wall Street.
But the 320-point gain in the Dow Jones industrial average was also caused by the calendar - this is one of those weeks in which stock options expire.
Over the past two years, there have been 12 gains of 100 or more points during the five days before options expire. That's 50 percent of the time. How does the market behave during weeks when options aren't expiring? There are triple-digit gains only 35.8 percent of the time.
*
The government said yesterday in its Producer Price report that the cost of gasoline fell 3.1 percent last month.
To which I say: I'd like to find that gas station.
This is another instance of government statistics not jibing with the real world.
*
Today's the day that financial institutions will have to start reporting a fair value for so-called level 3 assets - which are highly illiquid and hard to value.
But don't underestimate the number of ways around this requirement.
First off, the requirement only applies to fiscal years starting today. So the actual disclosures probably won't be made for months.
And banks can apparently avoid coming up with any valuation if these assets are held for investment and not intended for sale.
Stay tuned.
john.crudele@nypost.com
« Last Edit: Today at 8:33am by welshdra »
www.nypost.com/seven/11152007/business/insulted_judges_revenge_174283.htm?page=0
INSULTED JUDGE'S REVENGE
DEUTSCHE BANK LOSES KEY SUBPRIME FORECLOSURE CASE
November 15, 2007 --
A ticked off federal judge in Cleveland could complicate the subprime mortgage mess.
In a recent ruling, Judge Christopher Boyko tossed out a bunch of real estate foreclosure claims made by Deutsche Bank because he said the Wall Street firm couldn't prove that it was the owner of the property.
Worse for Deutsche Bank, a trustee for the mortgages, Judge Boyko took exception when the bank's attorney claimed the jurist just didn't understand how the complicated mortgage business works.
Boyko's ruling came last month but is just now coming to light on Wall Street.
The judge - who sits on the bench in the U.S. District Court for the Northern District of Ohio - said Deutsche Bank "alleges it is the holder and owner of the note and mortgage."
"However, the attached note and mortgage identify the mortgagee and promisee as the original lending institution," the judge wrote.
Most mortgages are sold these days to investors.
A bank will lend money to someone who wants to buy real estate. But then the bank usually takes the loan and sells it to Wall Street.
Wall Street puts that loan together with many others and creates a security that is sold to investors. Often homeowners don't even know this transaction has taken place because they continue to send their monthly payments to the bank that granted them the mortgage.
Right now, Wall Street is having a difficult time because too many homeowners with iffy credit are defaulting on their mortgages and causing the securities sold around the world by Wall Street to lose value or become worthless.
The only recourse that the Wall Street firms have is to foreclose on the properties on which the original loans were written.
If Judge Boyko's decision stands up to appeal, retrieving assets through a foreclosure could be more difficult.
And while Wall Street and the banking community could obviously fix the paperwork problem, the Boyko ruling could complicate pending foreclosures.
Deutsche Bank had no comment.
In a footnote to the ruling, Judge Boyko said "Plaintiff's 'judge, you don't under stand how things work,' argument re veals a conde scending mindset and quasi-monopo listic system where financial institutions have traditionally controlled, and still control, the foreclosure process." Ouch!
*
What was behind the big stock market rally this past Tuesday? Answer: it wasn't what you think. The market decided to look on the bright side, thanks to a drop in the price of oil, good earnings news from Wal-Mart and an announcement by Goldman Sachs that it doesn't have the same problems as everyone else on Wall Street.
But the 320-point gain in the Dow Jones industrial average was also caused by the calendar - this is one of those weeks in which stock options expire.
Over the past two years, there have been 12 gains of 100 or more points during the five days before options expire. That's 50 percent of the time. How does the market behave during weeks when options aren't expiring? There are triple-digit gains only 35.8 percent of the time.
*
The government said yesterday in its Producer Price report that the cost of gasoline fell 3.1 percent last month.
To which I say: I'd like to find that gas station.
This is another instance of government statistics not jibing with the real world.
*
Today's the day that financial institutions will have to start reporting a fair value for so-called level 3 assets - which are highly illiquid and hard to value.
But don't underestimate the number of ways around this requirement.
First off, the requirement only applies to fiscal years starting today. So the actual disclosures probably won't be made for months.
And banks can apparently avoid coming up with any valuation if these assets are held for investment and not intended for sale.
Stay tuned.
john.crudele@nypost.com
« Last Edit: Today at 8:33am by welshdra »