Receiving Wide Coverage ...
Foreclosure Settlement Talks: The Obama administration is pressuring New York attorney general Eric Schneiderman to accept a settlement with large banks over foreclosure practices, the Times reported. But Schneiderman has resisted because he believes it will restrict his ability to investigate things like how loans were bundled into mortgage securities. Banks are getting increasing frustrated with Schneiderman and asked the Obama administration for help in changing the New York AG's mind. The Journal, meanwhile, reports on a broader impediment to the settlement talks. The sides seem to be at a stalemate, with banks seeking wide-ranging immunity that would cover all mortgage-related charges, while state attorneys general are willing to clear the banks on robo-signing and servicer-related misdeeds, while leaving open the possibility of suits for wrongdoing in fair lending and securitization. New York Times, Wall Street Journal
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Wall Street Journal
A $200 million short-term loan to the Swiss National Bank from the Fed for an unidentified bank raised concerns in the U.S. and Europe about the stability of banks and caused a stock market sell off that took the Dow Jones Industrial Average down 1.6%.
Although two more banks failed Friday, bringing the year's total to 67, the paper says that's an improvement from the 110 that went under by this time last year.
Lydian Private Bank in Palm Beach, Fla., will be taken over by Sabadell United Bank, and First Southern National Bank, in Statesboro, Ga., will be run by HeritageBank of the South.
New York Times
Meanwhile, an unsigned Times editorial says banks have not done enough to help borrowers with troubled mortgages. Banks should be trying to slow the number of foreclosures. But banks in many cases make more money from fees on defaulted loans than from modifications. The economy won't recover until something is done to help borrowers who are underwater on their mortgages.
German chancellor Angela Merkel reiterated her opposition to the issuance of euro bonds, a stand that will please the majority of Germans. But it will rattle European investors, who want stability for the European market and a more detailed plan on how to deal with the European sovereign debt crisis.
Columnist Gretchen Morgenson writes that the Securities and Exchange Commission has sued brokerage firm Stifel Financial for fraudulently selling debt securities to a Wisconsin school district. In response, Stifel is defending itself instead of settling with the SEC, and Stifel is also suing Royal Bank of Canada, which built the debt securities, for covering up its plan to secure profits from the Wisconsin deal.
Washington Post
Allan Sloan, Fortune magazine's senior editor at large, wrote an op-ed in the Washington Post on how the debt crisis worries him more profoundly than the subprime crisis "because it stems primarily from politics, not economics." Last round, you could blame Mozilo or Goldman Sachs or the other usual suspects. After Sloan doles out the blame to both the Tea Party and the Obama administration he says, "adding to the current sense of foreboding, at least for me, is the fact that the Federal Reserve, which rode to the rescue last time, is legally constrained by provisions of Dodd-Frank legislation."
