On Friday, Goldman Sachs and one of its VPs were charged by the Securities and Exchange Commission for defrauding investors by misstating key facts about a collateralized debt obligation (CDO) tied to subprime mortgages. The SEC said as the U.S. housing market was beginning to falter, Goldman Sachs collaborated with hedge fund Paulson & Co. to cherry-pick loan pools for the CDO that the companies were betting would default. Investors are said to have lost more than $1 billion.
Posting back-to-back losses in the third and fourth quarters of 2009, the second half of last year was, to say the least, rough for Bank of America. But a new year marks new beginnings, and things seem to be turning around for the nation's biggest bank. According to the company's earnings report released Friday, Bank of America earned $3.2 billion in the first quarter of 2010. That's a huge improvement compared to the net loss of $194 million reported in the fourth quarter of 2009.
Fannie Mae has updated several policies regarding borrowers' future eligibility to obtain a new mortgage loan after experiencing a pre-foreclosure event, including a deed-in-lieu or short sale. The waiting period for a new loan will now be based on the loan-to-value ratio, occupancy of the property, and whether extenuating circumstances played a part in the borrower's inability to make mortgage payments. The GSE says the updated policies will further support overall market stability and reinforce the importance of borrowers working with their servicers.
A federal investigation into Wall Street and the economic crisis has honed in on Washington Mutual, making the bank that was absorbed by JPMorgan Chase in 2008 the poster child for what went wrong with the nation's financial system. After two days of hearings, the Senate Permanent Subcommittee on Investigations has concluded that federal banking regulators failed to step in and curtail shoddy lending practices and ignored excessive risk-taking at what was once the sixth largest U.S. bank.
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