Fair Isaac Co. (aka "FICO") Just Got Fairer!

A change in how the most widely used credit score in the U.S. is tallied will likely make it easier for tens of millions of Americans to get loans. ~Wall Street Journal Online, August 7, 2014.

According to a recent Wall Street Journal online article [FICO Recalibrates Its Credit Scores], FICO is going to get under the hood and re-jigger some of its proprietary algorithms, to deal with the realities of the damage wreaked on distressed homeowners over the past five years. Continue reading “Fair Isaac Co. (aka “FICO”) Just Got Fairer!”

While Fannie Mae and Freddie Mac, the two GSEs[1] who’ve received the most attention of late – and much of it bad, after being taken over by the feds in October 2008 – their forgotten little sister, Ginnie Mae,[2] has been quietly growing into a strong young woman – metaphorically speaking. Continue reading “Ginnie Mae – The Forgotten Sister”

Former Congressman Barney Frank testified before the House of Representatives Committee on Financial Services on Wednesday, arguing that the Dodd-Frank Wall Street Reform and Consumer Protection Act and the voluminous set of regulations that followed shortly thereafter was a positive for the economy and safeguarded the American public from ever having to face an economic down turn the likes of the great recession ever again. Frank, a former chairman of the committee he now sat in front of, was one of five witnesses called before the committee to assess the impact of the law from multiple angles. He was the lone witness to testify in favor of the law. MReoprt, July 23, 2014

It’s been four years since Dodd-Frank was signed into law. So how’s it going? Has Wall Street been reformed? Have there been any innovative law protecting consumers from themselves? Continue reading “Q-Rant! Barney Defends Frankendodd!”

Jabberwocky: “Total nonsense. A fit of rambling which resembles a civilized language but in fact is meant only to obfuscate meaning or confuse the victim, or listener.” Directly taken from the story “Alice Through the Looking Glass” by Lewis Carroll. [Urbandictionary.com][1] Continue reading “Nuts and Dolts: How Total Nonsense Helped Win An Election”

“Trials are primarily about the truth. Consent decrees are primarily about pragmatism.” Appellate Panel Opinion, Second Circuit Court of Appeals in United States Securities and Exchange Commission vs. Citigroup Global Markets, Inc.

As the Big Bank settlements and stipulated decrees have continued to fill the financial pages over the last few years, most Americans have grown ambivalent about their habit of leaving federal courthouses after paying huge fines, but declining to admit they had broken any laws. The rationale for permitting them to do so is a concession by prosecutors in deference to Wall Street’s fear that such admissions would open the floodgates to litigation from shareholder groups. Apparently, it’s one thing to admit you were caught with your hand in the cookie jar, but quite another to admit that cookie theft is wrong. Continue reading “The Rakoff Effect On Big Banks’ Refusal To ‘Neither Admit Nor Deny’”

Maiden Voyage. This is the very first of what hopefully will be a series of periodic newsletters. I am hedging when I say “periodic” – but at least every three months. [If you’ve not signed up yet, go to link here!]

For readers of my website [here], they know that I alternate between objectivity and subjectivity, the latter occasionally morphing into a “rant.” Why? Because I can, that’s why! I’ve spent my legal career trying to grow a practice; going along to get along. I’ve been out on my own for four years, have a satisfying solo real estate practice, and so have fewer toes to step on. In other words, I don’t worry so much about expressing my personal opinion today. Besides, who’s gonna fire me?! Continue reading “Q-Law Newsletter’s Maiden Voyage!”

Wall Street Journal (May 8, 2014 by, Nick Timiraos, “5 Takeaways on Fannie, Freddie Earnings” ): “Mortgage giants Fannie Mae and Freddie Mac are sending $10.2 billion to the U.S. Treasury after reporting combined first-quarter profits of $9.3 billion. But Thursday’s earnings reports hinted at a possible cooling off in the profits of both companies, which have benefited from large one-time gains over the past several quarters. They also suggested a modestly softer housing demand.” Continue reading “Fannie, Freddie, And The Future”

AND THE AWARD GOES TO… [complimentary drum roll here] Jason Furman and James Stock! [Hereinafter collectively referred to as “J&J.”] Both economists,[1] apparently shilling for the White House, are calling for the dismemberment of Fannie and Freddie, the government sponsored enterprises, or “GSEs,” with something – anything – else. They have recently co-authored a puff piece [“The Moment is Right for Housing Reform”] that managed to make it onto the Wall Street Journal opinion page, mercifully “below the fold.”

Both gentlemen appear to have all the right credentials to be comfortably ensconced in the ivory towers of Ivy League academia. But for all their whiz-bang credentials in economics and statistics [here], one would think this article would contain a little more meat and a little less mush. In fact, the article is so packed with political pablum it ought to carry a warning against reading it without first putting on a bib. The piece appears to be directed to those folks in the audience who nod knowingly, but know nothing. In other words, J&J’s intent is not to inform, but to influence. To its credit, the article appears to comply with the federal mandates set forth in the “No Idiot Left Behind” learning program for useless information. Congratulations guys!

Continue reading “Nuts and Dolts: White House Puff Piece On “Housing Reform””

The April 19, 2014 Economist reports [Credit where credit’s due] that the ratings agencies are making a financial comeback after their near-death experience following the financial crisis, circa 2007-2009. For those readers who believed that Moody’s, S&P, and to a lesser degree, Fitch, were pure as the wind-driven snow, let me correct the record: During the years 2005 – 2008 the ratings agencies got paid big bucks to give inflated ratings to security offerings from large investment banks so that institutional investors would pay billions of dollars to purchase them. Many of these investments were filled to the brim with subprime mortgages. But they were pumped and packaged in such a way as to be rated as “investment grade.” Continue reading “Ratings Agencies: Still Shilling for Shillings”

As readers of this site know, I have no love lost for the Dodd-Frank Act. To review my prior rants, go to posts here and here. The gist of my objection to the law is that it casts too wide a net. It was created by politicians, bureaucrats, and regulators that had no real idea how it would be implemented. This is because they neither understood nor cared about implementation. To them, that issue would be worked out during the administrative process, which they regarded as mere details for underlings. But as we know, details are where the devil resides…. Continue reading “FrankenDodd’s Collateral Damage: Banks Too Small To Succeed”