NAACP Opens Financial Freedom Center

by Alex Ferreras on April 4, 2011

in Wells Fargo

WASHINGTON (Research and Markets) - The NAACP announced today the opening of the NAACP Financial Freedom Center, the next phase of a groundbreaking agreement with Wells Fargo & Co.  to provide financial education and banking resources to consumers. The Center will be the headquarters of the NAACP Financial Freedom Campaign, an initiative to influence change in the banking industry, prevent unfair mortgage lending practices, protect the community against predatory mortgage lending practices, improve fair credit access, and promote sustainable homeownership, financial education and wealth building strategies in historically disadvantaged communities. The agreement with Wells Fargo and NAACP was initiated last year and through this partnership, Wells Fargo became the first bank to endorse the NAACP’s Responsible Mortgage Lending Principles. The agreement also includes a process for sharing data, assessing Wells Fargo’s lending and servicing practices, and a shared accountability for progress.

The NAACP Financial Freedom Center will provide workshops on topics such as money management and home preservation through partnerships with community groups in the D.C. area. The Financial Freedom Center will serve as a base for NAACP units across the country to learn and organize around financial and economic empowerment. It will also hold gatherings to educate leaders in the financial industry about the historical impact of racial discrimination and best practices in achieving racial equity. The Financial Freedom Center will be staffed by a team of NAACP professionals. Volunteers from nonprofit organizations, financial institutions such as Wells Fargo, and others will be on site at the Center and across the country to provide guidance in such areas as home preservation, attaining a mortgage, credit repair and more.

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Treasury Department Agrees to be Named as a Selling Shareholder in Ally Financial Inc.’s Registration Statement for Its Initial Public Offering

The U.S. Department of the Treasury today announced that it has agreed to be named as a selling shareholder of common stock of Ally Financial Inc. (Ally) in Ally’s registration statement filed with the Securities and Exchange Commission (SEC) for a proposed initial public offering.  Treasury will retain the right, at all times, to decide whether and at what level to participate in the offering.Treasury owns approximately 74 percent of the issued and outstanding common stock of Ally, as of December 31, 2010, as well as approximately $5.9 billion of mandatorily convertible preferred stock.

A registration statement relating to Ally’s common stock has been filed with the SEC but has not yet become effective.  These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective.

Citi, Goldman, Sachs & Co., J.P. Morgan and Morgan Stanley are acting as Joint Bookrunners for the offering.

This offering will be made only be means of a prospectus.  When available, copies of the preliminary prospectus relating to the offering may be obtained for free by visiting the SEC website at http://www.sec.gov. Alternatively, the preliminary prospectus may be obtained by contacting:

Citigroup Global Markets Inc., Attention: Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th floor, Brooklyn, New York 11220, telephone: 1-800-831-9146, email: batprospectusdepartment

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Financial Analyst Pleaded guilty to Being in Relation to $1.5 Billion Fraud TBW Case

Sean W. Ragland, a former senior financial analyst at Taylor, Bean & Whitaker (TBW), pleaded guilty today to conspiring to commit bank and wire fraud for his role in a scheme that defrauded approximately $1.5 billion from financial investors in TBW’s mortgage lending facility, Ocala Funding.The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA OIG); and Victor F.O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.

Ragland, 37, of San Antonio, Texas, pleaded guilty before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Ragland faces a maximum penalty of five years in prison when he is sentenced on June 21, 2011.

According to a statement of facts submitted with his plea agreement, in 2005 TBW established a wholly owned lending facility called Ocala Funding. Ocala Funding raised money by selling asset-backed commercial paper to financial institutions, including Deutsche Bank and BNP Paribas, and used the money to purchase TBW mortgages. The facility was managed by TBW and had no employees of its own.

Ragland had tracking and reporting responsibilities with respect to Ocala Funding, and today he admitted that from 2006 through August 2009, he and other co-conspirators engaged in a scheme to mislead investors and auditors as to the financial health of the lending facility. According to court records, shortly after Ocala Funding was established, Ragland learned there were inadequate assets backing its commercial paper. Ragland tracked this deficiency, which was referred to internally at TBW as a “hole” in Ocala Funding. He reported the status of the “hole” to senior TBW executives, including its CEO and CFO. Ragland was also aware that TBW co-conspirators were improperly transferring hundreds of millions of dollars from Ocala Funding to TBW accounts. At the time that TBW ceased operations, the hole was approximately $1.5 billion.

Ragland admitted that, at the direction of other co-conspirators, he prepared documents that inaccurately and intentionally inflated figures representing the aggregate value of the loans held in Ocala Funding or under-reported the amount of outstanding commercial paper. He sent this false information to the financial institution investors, other third parties, and an outside audit firm.

To date, four other individuals have pleaded guilty to charges for their roles in this and related fraud schemes.

The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC OIG, HUD OIG, FHFA OIG, and the IRS Criminal Investigation. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.

This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .

Source: FBI

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Pearce, Financial Services Republicans Unveil Fannie and Freddie Reform Plan

House Financial Services Committee Republicans today unveiled their plan to reform government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.Rep. Scott Garrett (R-NJ), Chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, issued the following statement:

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Senate Republicans Push to Repeal Dodd-Frank Financial Takeover

by Alex Ferreras on April 1, 2011

in Government News

(Source: Senator Jim DEMint) - Today, U.S. Senator Jim DeMint (R-South Carolina), chairman of the Senate Steering Committee, announced the introduction of S. 712, The Financial Takeover Repeal Act of 2011. The bill would repeal the Dodd-Frank financial regulation bill that President Obama signed into law on July 21, 2010. Former Federal Reserve Chairman Alan Greenspan recently commented  that the Dodd-Frank regulation

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The Three Financial Steps To Getting A Mortgage

When you decide the time is right to buy a home it can be one of the biggest decisions you will ever make. It is an exciting time. But, before making decisions too quickly, you need to be cautious and take the proper financial steps to ensure your financial investment is successful. You must have your financial affairs in order and know what you can afford.

The first thing you should do when considering the purchase of a home is to prequalify for a mortgage. There is no cost associated with the prequalification process. Your mortgage lender will need your financial information such as income verification, property appraisal and credit history. After going through your finances, your lender will begin the process and will be able to tell you how much you will be able to borrow. By going through the prequalification process, you will know exactly how much you can afford, saving you the trouble of looking at homes that are out of your price range. Prequalifying has a few benefits. First, it will give you the power to negotiate with a seller which may save you thousands of dollars. Second, prequalified buyers are given preference over others in a multiple offer situation. Also, you will need to be prequalified in order to work with a realtor. Finally, you will be applying for the correct loan amount based on your prequalification.

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