July 2012

TheMReport — News and strategies for the evolving mortgage marketplace.

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Page 81 of 84

FINAL THOUGHTS "Quicken Loans is pleased that the United States Supreme Court has ruled in our favor . . . . Although we always believed that we were on the right side of the law, it is especially gratifying to have the affirmation of the highest court in the country." QUICKEN LOANS, in an official statement to the press following the company's legal victory in a RESPA-related suit brought by a Detroit-based lender Final Thoughts While Wall Street continues to buzz about JPMorgan's questionable derivatives trades, Capitol Hill commentary remains focused on the secondary market and the future of the GSEs. "The tight inventory we've been experiencing in the distressed market over the past several months is now spreading to equity properties, essentially affecting the supply conditions of both the distressed and non-distressed markets." LEFRANCIS ARNOLD, president of the California Association of Realtors, on the state's shrinking inventory levels "There are scores of people who worked in the RMBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line . . . .We want to hear from them." TONY WEST, acting associate attorney general, commenting on the RMBS Working Group's call to action for whistleblowers "Speaker Gingrich was hired by Freddie Mac to promote them . . . . I think that was an enormous mistake. He should have stood up and said, 'Look, these things are a disaster; this is a crisis.' They're offering mortgages again to people who can't possibly repay them." GOV. MITT ROMNEY, GOP presidential contender, responding to a question from CNN "Not to make a joke of it . . . you can live in your car if you don't pay your mortgage . . . . If you look at what consumers pay first, the answer is their car loan." MICHAEL CARPENTER, CEO of Ally Financial, comparing the stability of auto and home loans as the company continues its exit from the mortgage industry 80 | THE M REPORT "In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed, and poorly monitored . . . This trading may not have violated the Volcker Rule, but it violated the Dimon principle." JAMIE DIMON, CEO of JPMorgan Chase, during a conference call to address the bank's billions in losses in synthetic derivatives "Since it is impossible for regulators to perfectly align capital requirements with risk exposure, some banks might seek to increase return on equity through riskier activities that maximize yield on a given unit of Basel III capital, including new forms of regulatory arbitrage." MARTIN HANSEN, senior director with Fitch Macro Credit Research, in a statement regarding the company's recent study on common equity among financial institutions seeking to comply with Basel III regulations

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