If it wasn’t bad enough that the 2008 class of associates at Lehman Brothers worked a mere six weeks before the financial services firm collapsed, a year later, many of those same employees may be on the hook for repaying their $40,000 signing bonuses.
According to a report on a British financial employment Web site, a number of 2008 associates received letters demanding the former employees pay back their signing bonuses.
PriceWaterhouseCoopers, who is administering Lehman’s UK estate, sent the letters, not just asking for repayment of the bonuses, but also accrued interest and an increment for the depreciation of the British pound.
The bonuses were paid as a forgivable loan. If the employee stayed with the firm for a year and didn’t quit or get fired, it did not have to be repaid. But... more»
Embattled community group ACORN is fighting a Congressional move to block the organization from receiving federal funding with a lawsuit filed in US District Court against the United States.
The Center for Constitutional Rights filed the suit on behalf of ACORN — the Association of Community Organizers for Reform Now — and two of its affiliate groups. Other defendants include Treasury secretary Timothy Geithner and Office of Management and Budget director Peter Orszag.
In it, the lawsuit claims the continuing resolution that blocked ACORN and its subsidiaries from receiving federal funds is unconstitutional because it punitively targets the organization.
“This appropriation resolution is unprecedented. It does not appear that Congress has ever singled out a particular corporation or... more»
Housingwire recently reported that the unemployment rate crossed the 10% barrier, and readers pointed out that the figure wasn’t high enough by some measurements.
In most reports unemployment statistics come from the U-3 numbers calculated by the Bureau of Labor Statistics. Often missing from these reports is the U-6 unemployment curve, which measures the amount of workers who are underemployed. The U-6 number hit 17.5% in October.
However, folks in Pembroke, Ill. don’t care about the U-6 figure. The unemployment rate in Pembroke reached 46% in October, according to media reports.
It’s a small town of about 3,000 people, and the number should fall. High school graduates are leaving. Burned-down houses are ignored. The only businesses are gas stations, and one just recently closed. There... more»
Standard & Poor’s Ratings Services slashed some 26,300+ mortgage-related securities bonds in Q309. Bloomberg has the scoop on the downgrades in a posting today.
It marks a record quarter of mortgage bond downgrades for the credit-rating agency — an achievement not lost on industry players, one of whom thinks that a contest for a slogan for S&P is now in order. The ratings agency does not widely use a slogan currently.
After all, it’s not every quarter a credit rating agency takes so many ratings actions. Or at least, let’s hope not.
This particular source figured S&P’s new slogan should reflect that achievement.
These are a few suggestions from source on a trading desk somewhere in the vicinity of Manhattan:
Downgrading America, one loan at a time.
Give... more»
PennyMac Mortgage Investment Trust is planning to buy up newly issued loans and package them into bonds. A posting at Bloomberg has the scoop today.
The conduit arm of PennyMac would buy the mortgage loans as short-term investments.
It sounds promising in terms of short-term funding, but the question remains whether this conduit vehicle will last: Has the industry already forgotten the short-lived MLEC dreams?
Master Liquidity Enhancement Conduits, sometimes called Super SIVs (structured investment vehicles), were the solution to the credit crunch, developed in 2007 by the private equity market. MLECs were meant to encourage short-term funding, but plans were short-lived.
The conduit vehicle raises a question of liquidity, both then and now. Total US asset-backed commercial paper (ABCP) oustandings... more»
Four homeowners from Queens and Brooklyn filed a federal class action lawsuit against Aurora Loan Services - a subsidiary of Lehman Brothers - for allegedly not considering their loans for modification under the Home Affordable Modification Program (HAMP).
Under HAMP, the US Treasury allocates capped incentives to participating servicers for the modification of loans on the verge of foreclosure. Aurora receives a potential cap of $447m under HAMP.
The Legal Aid Society in New York City represents Doreen Edwards, Olubukola Keshinro, Garry Brewster and Maria and Thomas Vellucci in the lawsuit filed Friday.
The suit also charges: Timothy Geithner, the secretary of the Treasury; Herb Allison, the assistant secretary of the Treasury; Edward DeMarco, director of the Federal Housing Finance Agency... more»
Bernie Madoff’s accountant pleaded guilty today regarding his involvement in the multi-billion dollar Ponzi scheme. Bloomberg has the scoop on the guilty plea from David Friehling, who indicated he failed to execute the required independent investigation into Bernard Madoff Investment Securities.
HousingWire magazine reviews an account of the Madoff debacle, Too Good to be True: the Rise and Fall of Bernie Madoff, in the November issue. Book author Erin Arvedlund indicates Madoff’s auditor operated out of a small office with a minimal staff, including Friehling. The operation’s accountants, Arvedlund said, were not peer-reviewed.
The latest news around the investment scheme comes in the months after the scandal began to unwind in large financial settlements.
Spanish lender... more»
[Update 1: Clarifies NAHB's position]
The International Code Council’s (IRC) recent decision to mandate the installment of fire sprinklers in new homes will go forward, despite protest and opposition from the National Association of Home Builders.
The council is responsible for publishing the International Residential Code, and last year, updated the residential building code to require fire sprinkler systems in all new homes built after January 1, 2011. The code is used as the basis of 48 states’ residential construction standards.
But at a hearing last week, the NAHB petitioned the council to repeal the sprinkler requirement, which was rejected by a committee vote of 7 to 4. Members of the residential building code committee include homebuilders, building and fire safety officials, architects... more»
