This Treasury Department data shows how the largest mortgage servicers participating in the administration's $75 billion foreclosure prevention program have been performing. See our Eye on the Loan Mod Program for our complete coverage.
Identifying Suspicious Short Selling, But Not Who’s Behind the Trades
Last weekend, The Wall Street Journal highlighted new academic research showing that investors may be trading on insider information after companies approach hedge funds for loans.
Researchers found that on average, in the five days before companies announce a loan from a hedge fund, the volume of short sales increases by 75 percent as compared with the 60 days before a deal is announced. There was no comparable uptick in betting against companies that borrowed money from commercial banks instead.
With short selling, hedge funds and other investors make money by wagering that a stock's price will fall. Borrowing from hedge funds rather than commercial banks can be seen as a sign of distress, as hedge funds tend to charge higher interest rates.
Treasury’s ‘Point Man’ on AIG Bailout That Benefited Goldman, Owned Goldman Stock
Deep in an article today on the government's bailout of AIG, The New York Times cites sources saying that the Treasury Department's "point man" on AIG, Don Jester, was a former Goldman Sachs employee who owned stock in the bank even as he was making decisions on the bailout that ultimately channeled billions of taxpayer dollars to Goldman.
Owning stock in a company an official oversees typically is verboten, but because Jester was working as an outside contractor rather than an official employee, he was exempt from conflict-of interest rules.
Goldman Sachs stood to benefit from the AIG bailout because Goldman had roughly $20 billion in insurance-like credit-default swaps with AIG -- essentially bets by the investment bank that the housing market would go south. But if AIG collapsed, Goldman wouldn't be able to collect on the bets. When the government instead bailed out AIG, taxpayers paid out the swaps at full face value, and Goldman Sachs got $12.9 billion -- more than any other of AIG's customers.
Q & A: Former SEC Chairman Sees Financial Reform as Changes on the Margins
After a 20-hour, all-night session, Senate and House negotiators agreed last Friday on a compromise financial reform bill meant to prevent future economic meltdowns. Just before the bill was being finalized, former SEC Chairman Arthur Levitt wrote a scathing op-ed in The Wall Street Journal, saying the bill was "bled dry of nearly every meaningful protection of investors." Levitt headed the SEC from 1993 to 2001, leaving just before the accounting scandals of Enron and WorldCom erupted, and is now an adviser to Goldman Sachs and the Carlyle Group, a private equity firm.
As the dust settled last Friday, we checked in with Levitt to understand just why he believes the bill, as he says, "totally left investors in the dust." Here are his thoughts on the topic.
Behind the Financial Reform Push, Worries of Warring Regulators
Backers of financial regulatory reform are gearing up for the final stretch in a yearlong effort to construct a new, streamlined architecture. But recent reports and testimony about the financial crisis suggest a crucial ingredient in any new structure is in short supply: cooperation among the watchdogs.
A proposal to eliminate one regulator seen by many as particularly weak -- the Office of Thrift Supervision -- could alleviate some friction. A soon-to-be-released federal examination of the Washington Mutual collapse found that OTS resisted efforts by a more skeptical regulator, the Federal Deposit Insurance Corporation, to take a closer look at WaMu, according to an account in The New York Times.
The Call Geithner Didn’t Make While His New York Fed Watched Over Citigroup
The proposition that Treasury Secretary Timothy Geithner, in his prior job as president of the Federal Reserve Bank of New York, didn’t do enough to rein in banking giant Citigroup just gained new support.
On Wednesday, the Financial Crisis Inquiry Commission disclosed that a peer review study by other Federal Reserve banks in 2005 found that the New York Fed "had insufficient resources to conduct supervisory activities" of Citigroup.
Treasury, Ahem, Clarifies Goals for the Mortgage Mod Program
April 15: This post has been corrected.
How many struggling homeowners will get a mortgage modification through the government’s $75 billion program? It would seem to be a simple question. But for the past year, the administration has been saying one thing, and observers have been hearing another.
What the administration has been saying is that the program “will help up to 3 to 4 million at-risk homeowners avoid foreclosure by reducing monthly mortgage payments.” Sounds like the Treasury Department is aiming to get 3 million to 4 million modifications, right?
Actually, Treasury’s real goal is between 1.5 million and 2 million permanent modifications, according to a new watchdog report.
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Financial Reform Amendment Would Address Loan Mod Problems with ‘Homeowner Advocate’ – 5/7
Disorganization at Banks Causing Mistaken Foreclosures – 5/5
Treasury, Ahem, Clarifies Goals for the Mortgage Mod Program – 3/25
TARP Watchdog Launches Audit of Bailout Contracts – 2/9
Chase Denied Loan Mods for Now Forbidden Reason—Homeowners in Limbo – 2/4
Homeowners Say Banks Not Following Rules for Loan Modifications – 1/14
Bailout Breakdown: Losses Likely to Be Larger Than Treasury Estimates – 12/11
Homeowners Getting Blame for Lack of Loan Mods, but Evidence Points to Banks and Servicers, Too – 12/9
We're tracking where the bailout money is going. Our lead bailout reporter – and blogger – is ProPublica's Paul Kiel. Lead developer is Dan Nguyen.

- Our frequently updated database tracks every dollar. In the scorecard, we provide a summary generated from the latest numbers.

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