Study: Credit Card Statements Virtually Incomprehensible

To determine the Periodic Rate Finance Charges, we multiply each Balance Subject to Finance Charge by its applicable Daily Periodic Rate and that result by the number of days in the billing cycle. To determine the total Periodic Rate Finance Charge for the billing cycle, we add the Periodic Rate Finance Charges together. Each Daily Periodic Rate is calculated by dividing its corresponding Annual Percentage Rate by 365.

Sounds like a piece of cake, right?

Not really according to a new repo... [Read More]

FTC Stops Foreclosure Prevention Marketers Misrepresenting Business Opportunities

At the request of the Federal Trade Commission, a federal court has halted a bogus mortgage foreclosure prevention operation that misrepresented both the “loss mitigation” services it offered and the earnings potential of the business opportunity it sold. The FTC seeks to end this deceptive scheme and make the defendants give up their ill-gotten gains.

According to the FTC’s complaint, the defendants sold “loss mitigation” services to homeowners at risk of foreclosure, falsely claiming they c... [Read More]

41 Charged in Chicago Area Mortgage Fraud Case

CHICAGO, June 23 /PRNewswire-USNewswire/ -- Forty-one defendants are facing federal charges relating to various mortgage fraud schemes in five separate cases made public today by federal law enforcement officials. In some of the schemes, the defendants were charged with falsely inflating the values of dilapidated homes in urban areas. Other schemes feature a twist where defendants were charged with deals involving million-dollar condominiums in a Chicago high-rise and sprawling homes in... [Read More]

Obama Refis: Slow Out of the Gate

NEW YORK (CNNMONEY.COM) -- The Mortgage Bankers Association has slashed its estimate of the number of mortgages its members will issue in 2009. One reason: Few refinancings are being done under President Obama's ballyhooed Home Affordable Refinance Program.

The MBA is forecasting mortgage originations of $2.03 trillion for the year, a drop of more than $700 billion from its March forecast. More than $600 billion of the drop is due to fewer refinancings than originally predicted. Only 13,000 O... [Read More]

Surprise! Bankers Don’t Like the Idea of a Consumer Protection Agency for Financial Products

Well, this should come as no surprise: Financial industry groups already are gearing up to fend off a proposed Consumer Financial Protection Agency that would regulate mortgages, credit cards, and other kinds of consumer lending. The idea was a key part of the financial system overhaul that President Obama outlined on Wednesday.

Although Obama called for all kinds of sweeping changes in the nation’s regulatory system, it’s the Consumer Finance Protection Agency that’s drawing the most fire, T... [Read More]

Bank of America CEO Ken Lewis Explains Himself

Ken Lewis' opening statement to congress and the Federal Reserves e-mails about Bank of America.

Testimony of Kenneth D. Lewis, Chief Executive Officer: Bank of America

House Committee on Oversight and Government Reform and Subcommittee on Domestic Policy

Chairman Towns, Ranking Member Issa, Subcommittee Chairman Kucinich and Ranking Member Jordan, my name is Ken Lewis, and I am the Chief Executive Officer of Bank of America. I appreciate the opportunity to appear before you today to... [Read More]

Obama: A Sweeping Overhaul

WASHINGTON (CNNMoney.com) -- President Obama on Wednesday unveiled his long-anticipated plan to restructure how banks and other firms are regulated in the hope of preventing another financial collapse.

The far-reaching effort would reorder the roles of some key agencies to try to tighten government supervision of the financial sector. It would also toughen up standards for big financial firms and create a new agency dedicated to consumer protection.

"We did not choose how this crisis began... [Read More]

National Safe And Fair Mortgage Lending Coalition Launched

For the first time ever, American consumers seeking mortgages will now have the option of using lenders that are certified as "safe," "fair" and free of predatory lending, under a 21-member national network known as the nonprofit "Fair Mortgage Collaborative" (FMC), the members of which are committed to providing homeowners and homebuyers access to mortgages at a fair rate of compensation. The major effort supported by the Ford Foundation is the first national campaign of its kind aiming to... [Read More]

Bank of America Paying Mozilo's Legal Fees

NEW YORK (Reuters) - Bank of America Corp said on Tuesday it is covering the legal fees of Angelo Mozilo, the former Countrywide Financial Corp chief executive charged with securities fraud and insider trading.

The largest U.S. bank said Mozilo is covered by an indemnity clause in place when he ran Countrywide, which Bank of America acquired last July 1. Mozilo had co-founded Countrywide in 1969.

The U.S. Securities and Exchange Commission filed civil charges against the 70-year-old Mozilo... [Read More]

Exit From TARP No End To Troubles

Some worry banks not allowed to pay the government back will be marked as ''losers,'' but all face tighter oversight and risks ahead.


The government's official "most beautiful bank" list is set for publication.

The Treasury Department is expected to unveil Tuesday which banks will be allowed to pay money back to the government from the Troubled Asset Relief Program. The group, which will likely include JPMorgan Chase, Goldman Sachs, Capital One and State Street, passed the government's s... [Read More]

Congress Subpoenas the Fed over BOA-Merrill Lynch

WASHINGTON (AP) -- House lawmakers on Tuesday said they have subpoenaed the Federal Reserve to hand over e-mails, notes and other documents related to its role in Bank of America Corp.'s acquisition of Merrill Lynch & Co.

The lawmakers' subpoena comes after claims that top government officials pressured Bank of America Corp. CEO Ken Lewis to complete the bank's purchase of Merrill Lynch, threatening his job security. Lewis has testified that he had been advised by the officials, former Tr... [Read More]

FHA is Cracking Down on Certain Brokers

THE subprime mortgage crisis has had at least one positive outcome: many unscrupulous professionals who steered unsophisticated borrowers into risky loans went out of business.

Some of those people have since returned to the industry, lenders and mortgage brokers say, only this time they are involved in loans insured by the Federal Housing Administration, which are also often sought by less sophisticated borrowers.

Now the F.H.A. is tightening its review of mortgage professionals who are... [Read More]

Feds Hunt Fugitive Mortgage Fraud Broker

NEW YORK (AP) — A former Wall Street broker facing criminal charges linked to the subprime mortgage meltdown has become the target of an international manhunt, federal authorities said Friday.

Prosecutors notified a judge overseeing the case that Julian Tzolov disappeared on May 9 from a Manhattan home where he had been under house arrest since last year after surrendering his passport and posting a $3 million bond. An electronic monitor on his ankle had been removed.

Since then, investiga... [Read More]

Loan-Shark Lenders Have Date With Hangman

June 3 (Bloomberg) -- Pity the neighborhood loan shark.

The credit-card companies have stolen his customers by taking a softer approach to charging outrageous interest rates. During the subprime lending boom, mortgage banks shouldered into shark territory, too.

Loan sharks are called mobsters. Thieving legitimate lenders are called capitalists -- free to impose any terms short of kneecapping on their troubled borrowers. Washington treated capitalist sharks as role models and beloved camp... [Read More]

Countrywide's Mozilo Accused of Fraud

NEW YORK (CNNMoney.com) -- The Securities and Exchange Commission on Thursday filed securities fraud charges against former Countrywide Chief Executive Angelo Mozilo and two other former executives.

The trio was charged with deliberately misleading investors by telling them the company was a quality lender of mostly prime mortgages and had prudent underwriting standards, while it actually was engaging in very risky lending practices in order to build and maintain market share.

Mozilo was a... [Read More]

Former CEO of Countrywide Makes the Top 21 Dumbest Moments in Business 2008

Mozilo's 'disgusting' reply-all

If you thought the former Countrywide CEO couldn't sink any lower, think again. Already under attack as the overpaid, over-tanned and over-zealous pioneer of subprime mortgages, Angelo Mozilo doesn't do himself any favors in May after reading a customer's e-mailed plea for help with his home loan.

Intending to forward the missive to a colleague, Mozilo instead hits "reply all" and sends a response calling the beleaguered homeowner's request "unbelievable" a... [Read More]

A Strange New Twist for TARP Rules

Federal Reserve officials surprised bankers in the past week by demanding they raise specific amounts of new capital before repaying taxpayer funds, applying a more stringent assessment than the stress tests in May.

Has the Federal Reserve been reading too many fairy tales?

Judging by the latest tweaks the U.S. regulator has made to the criteria banks must meet before they can repay capital injected by the Troubled Asset Relief Program, the Fed seems fixated on the Princess and the Pea: n... [Read More]

Tips for Credit Card Users

Credit card companies make credit more costly than necessary by manipulating payments to keep the highest-cost balances from being paid off and by imposing hidden, hard-to-understand penalty interest rates.

The following tips may help you protect yourself from such credit card practices. Please don't forget to share your own story and tips.

Recommendations:

Scrutinize all credit card offers and terms, especially the “fine print”

Don’t be fooled by teaser rates and cash ad... [Read More]

Prevention Needed to Curb Foreclosure Rescue Scams

With home foreclosures at an unprecedented and historic high, the National Consumers League (NCL), which has long tracked illegal scams through its Fraud Center, warns millions of consumers are more vulnerable than ever to mortgage fraud and bogus foreclosure rescue schemes.

As federal and state governments undertake a much-needed crackdown, NCL urges a renewed focus on consumer education to help consumers avoid falling victim to these criminals in the first place.

Mortgage fraud costs the... [Read More]

Activist Financier 'Terrorizes' Bankers in Foreclosure Fight

Bruce Marks doesn't bother being diplomatic. A campaigner on behalf of homeowners facing foreclosure, he was on the phone one day in March to a loan executive at Bank of America Corp.

"I'm tired of borrowers being screwed!" Mr. Marks yelled into the phone. "You're incompetent!" Before hanging up, he threatened to call bank CEO Kenneth Lewis at home to complain about the loan executive.

Mr. Marks's nonprofit organization, Neighborhood Assistance Corp. of America, has emerged as one of the l... [Read More]

Vacant Foreclosed Homes Spawn Blight, Crime

Next door to Jeffrey Cash's tidy East Oakland bungalow sits a boarded-up foreclosed house that has been vacant for months, attracting locals who shoot dice in the driveway, smoke crack on the porch and dump debris in the yard, he said.

"I call the cops on a regular basis, but it is an ongoing battle," he said. "It's a part-time job making sure it doesn't become more of an eyesore than it already is."

Last week, someone hurled a brick through Cash's front window - he thinks in retaliation... [Read More]

Big Banks Line Up to Pay Back TARP

NEW YORK/WASHINGTON (Reuters) - JPMorgan Chase & Co and several other banks eager to escape the restrictions and stigma linked to government bailout funds may get the chance to do so in the next few weeks.

Regulators are talking to big banks that want to repay funds received under the government's $700 billion Troubled Asset Relief Program, or TARP, a Federal Reserve official said on Tuesday.

No announcements on returning funds will come until around June 8, the official added. The Fed... [Read More]

What the New Credit Card Law Means to Consumers

WASHINGTON — The Senate passed legislation Tuesday to protect credit card holders from sudden interest-rate spikes, but consumer groups and card issuers warned that people are still likely to face obstacles in getting and maintaining credit.

The Senate vote was 90-5. The House of Representatives is expected to approve the bill overwhelmingly, probably Wednesday, and it then will go to President Barack Obama, who's pushed hard for the legislation.

The new law would protect consumers from su... [Read More]

Selective Interpretation? Top Credit Card Issuers Appear to Follow Own Rules

CRL offers quick snapshot of recent issuer activity:

We took a quick sampling of credit card issuers' recent activities to see how they have responded to the Federal Reserve rule changes that were announced in December 2008 but won't take effect until July 2010. We found the top eight issuers, who account for 80 percent of credit card balances, are raising interest rates on a larger portion of customers than usual and increasing the number of fees they impose. The new Fed rule will ban some b... [Read More]

Playing Chicken With Your Lender

You are caught between the perverbial rock and hardplace, on one hand the lender is telling you that they can't help you unless you are in default, and on the other hand, you do not want to purposely destroy your credit in order to get the help you need while struggling to make the payments to remain current.

What happened to lenders touting, make sure you contact your lender when you know you are going to have a hard time making payments, before defaulting?

If you've been tempted to skip... [Read More]