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HousingWire's Morning Radar takes a look at topics trending across the Internet.
Moody's downgrades ratings on 15 global banks
Moody's Investors Service downgraded the ratings of 15 major banks – including Bank of America, Barclays, and Citigroup – citing the bank's significant exposure to volatility and risks in today's capital markets.
The New York-based ratings giant said the impacted banks are exposed to capital risks that have caused other banks to fail.
Moody's took action against Bank of America, Citigroup, Morgan Stanley and Royal Bank of Scotland on the grounds that the firms are exposed to issues with risk management and have histories of high volatility. Moody's claims the banks in this group remain exposed to market difficulties while having "shock absorbers" that are "in some cases thinner or less reliable than those of higher-rated peers."
A full Excel list of the downgrades are here.
While Moody's said the firms are making changes to their strategies and attempting to limit their risk, they remain exposed to risks in their run-off legacy or acquired loan portfolios.
The second group facing ratings changes includes Barclays, BNP Paribas, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, Societe Generale and UBS.
"Many of these firms rely on capital markets revenues to meet shareholder expectations," Moody's wrote.
The remaining group facing downgrades includes HSBC, Royal Bank of Canada and JPMorgan—all of which have stronger shock absorbers and are generally stable, Moody's said. Still, capital market operations are a big part of the firm's work, exposing them to risk.
"This, combined with their risk management through the financial crisis, has resulted in lower earnings volatility," Moody's explained. "Capital and structural liquidity are sound for this group, and their direct exposure to stressed European sovereigns and financial institutions is contained."
Former Taylor, Bean Whitaker CEO loses new trial appeal
Lee Farkas, the former CEO of Taylor, Bean and Whitaker Mortgage Corp., lost his appeal for a new trial this week, CBS News reported.
Farkas is serving a 30-year prison sentence after a court found him guilty of orchestrating a $3 billion mortgage fraud scheme.
According to CBS, Farkas appealed to the Fourth U.S. Circuit Court of Appeals, claiming that a judge violated his constitutional rights by refusing to give his attorneys more time to search through millions of pages of financial records.
The court rejected his appeal.
Oops … Reoccupy your home attorney could lose his law license
Don't try this at home, foreclosure attorneys.
The State Bar of California is recommending the disbarment of a foreclosure attorney who encouraged his clients to re-break into their foreclosed homes and occupy them.
The San Jose Mercury News and the Associated Press reported on attorney Michael T. Pines' plight on Thursday.
Apparently, he's also in trouble for not partaking in disciplinary hearings against him. The case is set to go before the state Supreme Court, MercuryNews said.
The bar believes Pines used his clients to gain national media attention rather than to serve in their best interests.
Billionaire buys entire Hawaiian Island
A billionaire CEO has finalized a major real estate transaction by buying an entire Hawaiian island.
Larry Ellison, CEO of Oracle Corp., acquired 98% of a 141-square mile Hawaiian island, the Wall Street Journal reported.
His new island is nine miles off the coast of Maui and is the smallest inhabited Hawaiian island that is accessible to the public. It was previously controlled by Castle & Cooke, which is controlled by David H. Murdock.
kpanchuk@housingwire.com
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