EIC/Wall Street investigations
Matthew's Feed
Aug 1, 2012
via Unstructured Finance

Will FHFA opposition to principal reductions boost eminent domain efforts?

By Matthew Goldstein and Jennifer Ablan

There’s nothing surprising about FHFA head Ed DeMarco’s decision to nix the idea of writing down some of the debt owed by cash-strapped homeowners on mortgages guaranteed by Fannie and Freddie. DeMarco, whose agency regulates Fannie and Freddie, has been a consistent opponent of principal reductions–something we pointed out last October in our story on the need for a “great haircut” on consumer loans and including student and mortgage debt to stimulate the economy.

But DeMarco’s renewed opposition comes at a time that there is a growing consensus that something needs to be done on the housing front to get the U.S. economy going, as opposed to simply churning along at the current anemic rate of growth. More and more economists are saying that reducing mortgage debt will not only reduce foreclosures, it will give ordinary Americans more money to spend on goods and services.

Aug 1, 2012

Ex-Morgan Stanley housing chief launches foreclosed home fund

By Jennifer Ablan and Matthew Goldstein

(Reuters) – Oliver Chang, the former head of U.S. housing strategy at Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz), on Wednesday announced the opening of an investment firm that intends to spend up to $1 billion to acquire distressed, single-family homes over the next two years.

Sylvan Road Capital is launching with a $300 million investment from an undisclosed private equity firm, the new firm said.

Jul 28, 2012
via Unstructured Finance

UF Weekend reads – The PIMCO edition

Jenn Ablan likes to tell me that people are always writing about PIMCO and Bill Gross, the long reigning “king of bonds.” And when you think of it there’s a lot of truth to that assertion.

Gross’ mammoth $263 billion Total Return Fund gets endless coverage because–by its very size–it really is the bond market. It’s one reason why so much ink is spilled whenever the Total Return Fund has a month where investors pull more money out of the fund than put in.  And it’s why there’s so much analysis of what Gross & Co. are doing with Treasuries and mortgage-backed securities–and whether they are using lots of leverage and derivatives to boost exposures.

Jul 27, 2012

Calif. official chastises SIFMA over eminent domain “threats”

July 27 (Reuters) – California Lieutenant Governor Gavin
Newsom on Friday warned influential investor group Securities
Industry and Financial Markets Association to “cease making
threats to the local officials of San Bernardino County” over a
plan to use eminent domain to seize underwater mortgages from
private investors.

San Bernardino County, located east of Los Angeles, and some
of its towns have set up a joint authority that would use the
power of eminent domain to forcibly purchase distressed
mortgages. Rather than evict homeowners through foreclosure, the
public-private entity would offer residents fresh mortgages with
reduced debts.

Jul 22, 2012

Prosecutors, regulators close to making Libor arrests

July 22 (Reuters) – U.S. prosecutors and European regulators
are close to arresting individual traders and charging them with
colluding to manipulate global benchmark interest rates,
according to people familiar with a sweeping investigation into
the rigging scandal.

Federal prosecutors in Washington, D.C., have recently
contacted lawyers representing some of the suspects to notify
them that criminal charges and arrests could be imminent, said
two of those sources, who asked not to be identified because the
investigation is ongoing.

Jul 22, 2012

Exclusive: Prosecutors, regulators close to making Libor arrests

By Matthew Goldstein and Jennifer Ablan and Philipp Halstrick

(Reuters) – U.S. prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates, according to people familiar with a sweeping investigation into the rate-rigging scandal.

Federal prosecutors in Washington, D.C., have recently contacted lawyers representing some of the individuals under suspicion to notify them that criminal charges and arrests could be imminent, said two of those sources who asked not to be identified because the investigation is ongoing.

Jul 20, 2012
via Unstructured Finance

Outrage isn’t asleep it’s just gone underground

By Matthew Goldstein and Jennifer Ablan

Where is the outrage? A year ago, the Occupy Wall Street movement was just getting started, with mass demonstrations across the nation against corporate malfeasance and greed.

But now it’s been crickets and we don’t mean the game. There’s no the steps of Wall Street or Capitol Hill since as revelations continue to unfold over the deepening scandal that big banks rigged Libor, the benchmark international lending rate; JPMorgan Chase’s mounting losses from disastrous credit bets and a possible cover-up attempt; and the disappearance of customer funds from Iowa futures broker PFGBest, discovered after its founder tried to commit suicide and left a note outlining a 20-year fraud.

Jul 19, 2012

Exclusive: Ex-Goldman mortgage chief plans foreclosed home fund

NEW YORK (Reuters) – Former Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research, Stock Buzz) executive Donald Mullen, one of the architects of the subprime mortgage trade, is trying to raise at least $500 million for a fund that will buy foreclosed homes with an eye toward renting them out.

Mullen, who until January was head of the credit and mortgage business inside Goldman’s securities division, began marketing his Fundamental REO Access fund in earnest about a month ago, said seven people familiar with the matter, but who did not want to be identified because they do not work for the upstart fund.

Jul 19, 2012

Ex-Goldman mortgage chief plans foreclosed home fund

NEW YORK, July 19 (Reuters) – Former Goldman Sachs Group
Inc. (GS.N: Quote, Profile, Research) executive Donald Mullen, one of the architects of
the subprime mortgage trade, is trying to raise at least $500
million for a fund that will buy foreclosed homes with an eye
toward renting them out.

Mullen, who until January was head of the credit and
mortgage business inside Goldman’s securities division, began
marketing his Fundamental REO Access fund in earnest about a
month ago, said seven people familiar with the matter, but who
did not want to be identified because they do not work for the
upstart fund.

Jul 18, 2012
via Unstructured Finance

The hedge fund world’s version Elvis plays cupid

You know Bill Ackman as a hedge fund rabble rouser, but did you know on the side he likes to play cupid. Here’s Svea Herbst-Bayliss with a post on the Pershing Square Capital manager’s softer side:

By Svea Herbst-Bayliss

Bill Ackman is known as many things: investor, corporate nudge and quick-talking television pundit. But matchmaker?