Tuesday, November 25, 2008

The Man Who May Cost Cleveland 4000 Jobs

This is John Dugan, Comptroller of the United States. He is also the man who apparently pulled the plug on National City Bank and steered National City into a merger with PNC, the Pittsburgh-based bank that is using Federal bail-out money to buy National City.

Dugan pulled the plug on National City by refusing to allow it to receive Federal funds. According to Ohio political leaders, NCB was the only bank in the top 25 to be refused Federal bail-out money. Although Cleveland Congressmen Kucinich and LaTourette have been trying to find out the particulars of the NCB-PNC deal, they have been frustrated by a lack of transparency in the Treasury Department.

What makes this deal stink is that before becoming Comptroller of the Currency, Mr. Dugan was a lawyer in private practice in Washington, D.C. One of his clients was, wait for it, PNC. Although he points out that NCB was also one of his clients, his relationship with PNC has caught the attention of LaTourette, among others.

Dugan is shocked and angered that anyone would think that he used his influence to help a former client of his, but LaTourette points out that Treasury gave more money to PNC than that bank was supposed to get. This is from the PD article linked to in this entry's title:

LaTourette said the Treasury Department money that went to PNC marked the first time the federal government took an equity stake in a regional bank.

According to LaTourette, about a week before National City was forced to sell itself to PNC, Dugan told National City Chief Executive Peter Raskind that his institution shouldn't expect federal bailout money.

LaTourette also observed that Paulson and Dugan gave PNC more bailout money than it was eligible to receive under the terms of the federal program. He said the bailout law stipulated that the Treasury Department could only give a bank money equivalent to 3 percent of its risk-weighted assets, while PNC got an amount closer to 6 percent.

Representative LaTourette has a great line about NCB:

It survived two wars and the Great Depression, but couldn't survive eight weeks of the bail-out.

If you agree with LaTourette and Kucinich that the NCB-PNC deal is suspicious, then check out this website and see how you can get involved in saving National City jobs.


Anonymous said...

National City Bank is the parent co. of First Franklin Mortgage or First Franklin Bank. First Franklin is the #1 predatory lender for Ohio and one of the biggest faults of the foreclosures and the distruction of Cleveland.
Personally...NCB is crooked all the way around and I can tell you horror stories of folks whoms lives have been destroyed.
Just look up or google First Franklin lending out of Cleveland and see for yourself.
THE reason they are not getting bail out money is they are under investigation for major fraud.
It's real important to understand why some lenders will not be, should not be bailed out.

Anonymous said...

I feel bad for the National City Banks employees, believe me, I do. Every day before coming to work, I even check the MortgageImplode.com myself to see if I have a job/bank to come to BEFORE leaving the house. however, in regrds to NCB already has stiffed Merrill Lynch and if PNC is willing to pick up the pieces??? Please read on...Story from the Plain Dealer Business section...As follow:

Merrill Lynch says National City misrepresented First Franklin deal
Posted by Teresa Dixon Murray April 23, 2008 17:41PM
Categories: Banks, Breaking News, National City
After spending $1.3 billion to buy National City Corp.'s subprime mortgage division in late 2006, Merrill Lynch & Co. closed the operation last month. The market for risky mortgages has simply evaporated nationwide.

Now Merrill Lynch is accusing National City of misrepresentation.

The notice to National City was dated April 10, but National City disclosed it only this week in a regulatory filing with the U.S. Securities and Exchange Commission.

Merrill Lynch claims that National City misrepresented "alleged losses" associated with buying back certain loans.

"Given the preliminary stage of this claim," National City said in the filing, "it is not possible for management to assess the probability of a material adverse outcome, or reasonably estimate the amount of potential loss, if any." The bank declined additional comment Wednesday.

Merrill Lynch agreed to the purchase in September 2006.

National City bought California-based First Franklin from a subsidiary of Bank of America for $266 million in 1999. First Franklin specialized in mortgages for people with poor credit ratings who could only qualify for mortgages at high interest rates. The mortgages are highly profitable for banks, but are also highly risky.

By 2003, First Franklin was generating $30 billion a year in loans. The price Merrill Lynch paid for it yielded a profit of $1 billion for National City. But last month Merrill Lynch closed First Franklin because it had become worthless. First Franklin employed 2,100 last year.

At the time of the deal, Merrill bought $6 billion in National City's subprime loans but wouldn't take an additional $10 billion worth because they were even riskier.

At about the same time it bought First Franklin, Merrill Lynch made three other acquisitions of mortgage-related companies. In 2006, Merrill Lynch said in a written statement that First Franklin accelerated its penetration into home loans.

That had crash-and-burn consequences. Merrill Lynch, the world's largest brokerage, forced out Chief Executive Stan O'Neal last year after Merrill Lynch announced a third-quarter loss of $2.3 billion and an $8.4 billion charge-off for failed credit- and mortgage-related investments.

Merrill Lynch's woes went beyond First Franklin, and Merrill Lynch has continued to feel the subprime pain as it posted a mammoth $10 billion loss in last year's fourth quarter and another $2 billion loss in this year's first quarter.

Anonymous said...

Here are the lenders that have shut their doors to date...
Imploded* Lenders™

305. Fortes Financial - Wholesale
304. HSBC Mortgage Corp. - Wholesale
303. CBRE Realty Finance
302. Franklin Bank, SSB
301. Mortgage Lion, Inc. - Wholesale
300. HMS Capital, Inc.
299. American Sterling Bank - Wholesale
298. CTX Mortgage Co. - Retail
297. Equity One Commercial
296. Coldstream Financial Svcs.
295. Banco Popular North America - Wholesale
294. Ace Mortgage Funding, LLC
293. E-Loan
292. Gateway Bank, F.S.B. - Wholesale
291. First Call Mortgage Co.
290. Downey Savings and Loan - Wholesale
289. Prospect's Metrocities Mortgage - Wholesale
288. ComCor Mortgage - Wholesale
287. Chevy Chase Bank - Wholesale
286. Washington Mutual - Retail and Warehouse
285. Hometown Commercial Capital
284. Mid Atlantic Capital LLC
283. Kemper Mortgage, Inc.
282. Liberty Mortgage Funding Co.
281. Freddie Mac
280. Fannie Mae
279. Pacific Community Mortgage, Inc. - Gold Reverse, Inc.
278. Homecomings Financial, LLC
277. Thornburg Mortgage
276. CSB Mortgage
275. Carteret Mortgage Corporation
274. Accredited Home Lenders, Lone Star Funds - Wholesale
273. Western Residential Mortgage
272. Liberty Home Lending - Wholesale
271. Equipoint Financial Network, Inc.
270. Ideal Mortgage Bankers, Ltd. - Wholesale
269. Silver State Bank - Wholesale
268. Irwin Union Bank & Trust Co. - Wholesale
267. SunTrust Bank Equity Wholesale
266. Wachovia Mortgage, FSB - Wholesale
265. Lehman Brothers SBF
264. IndyMac Bancorp
263. Mortgages Ltd.
262. Wilmington Finance - Wholesale
261. Accredited Home Lenders, Home Funds Direct
260. Assured Lending Corp. - Wholesale
259. Homewide Lending Corporation
258. Vanguard Mortgage & Title, Inc.
257. Chase Home Equity - Wholesale
256. Chase Subprime - Wholesale
255. Evergreen Investment & Carnation Banc
254. Casa Blanca Mortgage/Shearson - Wholesale
253. Guaranty Bank - Correspondent
252. Citi Residential Lending
251. Montgomery Mortgage Capital Company
250. E*Trade Wholesale Lending
249. Shearson Financial Network, Inc.
248. American Bank Mortgage Group - Wholesale
247. AmeriBanc Corp.
246. Washington Mutual - Wholesale
245. Century Bank, F.S.B. - Wholesale
244. Diversified Mortgage, Inc.
243. National Wholesale Funding
242. Centennial Mortgage and Funding, Inc./Award Mortgage
241. Fidelity Home Mortgage Corp. - Wholesale
240. LMI Funding, Inc.
239. Millennium Mortgage - Wholesale
238. Origen Financial, Inc. (Correspondent)
237. CitiMortgage - Home Equity Wholesale
236. Bear Stearns Residential Mortgage
235. East West Mortgage Co. of VA
234. New Vision Residential Lending
233. Washington Savings Bank, F.S.B. - Wholesale
232. Macquarie Mortgages USA Inc.
231. Global Mortgage, Inc.
230. Unique Mortgage Solutions (UMS, LLC)
229. First Franklin - Merrill Lynch
228. First National Mortgage Sources
227. Resource Mortgage (Wholesale)
226. KH Financial
225. Lydian Mortgage
224. OMG Wholesale Lending
223. Saxon Mortgage (Wholesale)
222. Beazer Mortgage Corp.
221. Allpointe Mortgage (Broker Program)
220. Popular Warehouse Lending
219. Allied Lending Corp. (Wholesale)
218. BF Saul Wholesale Lending
217. Community Resource Mortgage
216. Lehman/Aurora Loan Services
215. Residential Mortgage Capital
214. Maverick Residential Mortgage
213. Countrywide Financial Corp.
212. First NLC Financial Services
211. First American Bank (Wholesale)
210. Soma Financial
209. National City Corp. (Wholesale)
208. Heartland Wholesale Funding
207. Homefront Mortgage Inc.
206. PNC Bank H.E.
205. Family First Mortgage Corp.
204. First Fidelity Financial
203. BSM Financial
202. 1st Choice Mortgage
201. Wescom Credit Union
200. Coast Financial Holdings/Coast Bank
199. WaMu (Subprime)
198. First Madison Mortgage
197. Southern Star Mortgage
196. TransLand Financial
195. Secured Bankers Mortgage Company (SBMC)
194. ComUnity Lending
193. Delta Financial Corp
192. BayRock Mortgage
191. Empire Bancorp
190. Option One - H&R Block
189. Citigroup - FCS Warehouse
188. Charter One (Wholesale)
187. Wells Fargo - Home Equity
186. Paul Financial, LLC
185. Webster Bank (Wholesale)
184. Fieldstone Mortgage Company
183. Tribeca Lending Corp. (Wholesale)
182. WAMU Comm. Correspondent
181. Marlin Mortgage Company
180. Countrywide Specialty Lending
179. UBS Home Finance
178. MortgageIT-DB (Retail)
177. Edgewater Lending Group
176. ResMAE Mortgage Corp.
175. Citimortgage Correspondent (2nds)
174. AMC Lending
173. Liberty American Mortgage
172. Exchange Financial (Wholesale)
171. FirstBank Mortgage
170. Bank of America (Wholesale)
169. Diablo Funding Group Inc.
168. Honor State Bank
167. Spectrum Financial Group
166. Priority Funding Mortgage Bankers
165. BrooksAmerica Mortgage Corp.
164. Valley Vista Mortgage
163. New State Mortgage Company
162. Summit Mortgage Company
161. WMC
160. Paragon Home Lending
159. First Mariner Wholesale
158. The Lending Connection
157. Foxtons, Inc.
156. SCME Mortage Bankers
155. Aapex Mortgage (Apex Financial Group)
154. Wells Fargo (various Correspondent and Non-prime divisions)
153. Nationstar Mortgage
152. Decision One (HSBC)
151. Impac Lending Group
150. Long Beach (WaMu Warehouse/Correspondent)
149. Expanded Mortgage Credit Wholesale
148. The Mortgage Store Financial
147. C & G Financial
146. CFIC Home Mortgage
145. All Fund Mortgage
144. LownHome Financial
143. Sea Breeze Financial Services
142. Castle Point Mortgage
141. Premium Funding Corp
140. Group One Lending
139. Allstate Home Loans / Allstate Funding
138. Home Loan Specialists (HLS)
137. Transnational Finance Wholesale
136. CIT Home Lending
135. Capital Six Funding
134. Mortgage Investors Group (MIG) - Wholesale
133. Amstar Mortgage Corp
132. Quality Home Loans
131. BNC Mortgage (Lehman)
130. First National Bank of Arizona
129. Chevy Chase Bank Correspondent
128. GreenPoint Mortgage - Capital One Wholesale
127. NovaStar, Homeview Lending
126. Quick Loan Funding
125. Calusa Investments
124. Mercantile Mortgage
123. First Magnus
122. First Indiana Wholesale
121. GEM Loans / Pacific American Mortgage (PAMCO)
120. Kirkwood Financial Corporation
119. Lexington Lending
118. Express Capital Lending
117. Deutsche Bank Correspondent Lending Group (CLG)
116. MLSG
115. Trump Mortgage
114. HomeBanc Mortgage Corporation
113. Mylor Financial
112. Aegis
111. Alternative Financing Corp (AFC) Wholesale
110. Winstar Mortgage
109. American Home Mortgage / American Brokers Conduit
108. Optima Funding
107. Equity Funding Group
106. Sunset Mortgage
105. Nations Home Lending
104. Entrust Mortgage
103. Alera Financial (Wholesale)
102. Flick Mortgage/Mortgage Simple
101. Dollar Mortgage Corporation
100. Alliance Bancorp
99. Choice Capital Funding
98. Premier Mortgage Funding
97. Stone Creek Funding
96. FlexPoint Funding (Wholesale & Retail)
95. Starpointe Mortgage
94. Unlimited Loan Resources (ULR)
93. Freestand Financial
92. Steward Financial
91. Bridge Capital Corporation
90. Altivus Financial
89. ACT Mortgage
88. Alliance Mortgage Banking Corp (AMBC)
87. Concord Mortgage Wholesale
86. Heartwell Mortgage
85. Oak Street Mortgage
84. The Mortgage Warehouse
83. First Street Financial
82. Right-Away Mortgage
81. Heritage Plaza Mortgage
80. Horizon Bank Wholesale Lending Group
79. Lancaster Mortgage Bank (LMB)
78. Bryco (Wholesale)
77. No Red Tape Mortgage
76. The Lending Group (TLG)
75. Pro 30 Funding
74. NetBank Funding, Market Street Mortgage
73. Columbia Home Loans, LLC
72. Mortgage Tree Lending
71. Homeland Capital Group
70. Nation One Mortgage
69. Dana Capital Group
68. Millenium Funding Group
67. MILA
66. Home Equity of America
65. Opteum (Wholesale, Conduit)
64. Innovative Mortgage Capital
63. Home Capital, Inc.
62. Home 123 Mortgage
61. Homefield Financial
60. First Horizon Subprime, Equity Lending
59. Platinum Capital Group (Wholesale)
58. First Source Funding Group (FSFG)
57. Alterna Mortgage
56. Solutions Funding
55. People's Mortgage
54. LowerMyPayment.com
53. Zone Funding
52. First Consolidated (Subprime Wholesale)
51. EquiFirst
50. SouthStar Funding
49. Warehouse USA
48. H&R Block Mortgage
47. Madison Equity Loans
46. HSBC Mortgage Services (correspondent div.)
45. Sunset Direct Lending
44. Kellner Mortgage Investments
43. LoanCity
42. CoreStar Financial Group
41. Ameriquest, ACC Wholesale
40. Investaid Corp.
39. People's Choice Financial Corp.
38. Master Financial
37. Maribella Mortgage
36. FMF Capital LLC
35. New Century Financial Corp.
34. Wachovia Mortgage (Correspondent div.)
33. Ameritrust Mortgage Company (Subprime Wholesale)
32. Trojan Lending (Wholesale)
31. Fremont General Corporation
30. DomesticBank (Wholesale Lending Division)
29. Ivanhoe Mortgage/Central Pacific Mortgage
28. Eagle First Mortgage
27. Coastal Capital
26. Silver State Mortgage
25. ECC Capital/Encore Credit
24. Lender's Direct Capital Corporation (wholesale division)
23. Concorde Acceptance
22. DeepGreen Financial
21. American Freedom Mortgage, Inc.
20. Millenium Bankshares (Mortgage Subsidiaries)
19. Summit Mortgage
18. Mandalay Mortgage
17. Rose Mortgage
16. EquiBanc
15. FundingAmerica
14. Popular Financial Holdings
13. Clear Choice Financial/Bay Capital
12. Origen Wholesale Lending
11. SecuredFunding
10. Preferred Advantage
9. MLN
8. Sovereign Bancorp (Wholesale Ops)
7. Harbourton Mortgage Investment Corporation
6. OwnIt Mortgage
5. Sebring Capital Partners
4. Axis Mortgage & Investments
3. Meritage Mortgage
2. Acoustic Home Loans
1. Merit Financial

Here are the ones on the ailing watch list. If you have money/stocks in any I would recommend moving it.
Ailing/Watch List Lenders™:
13. Velocity Commercial Capital
12. CitiMortgage Wholesale Lending
11. Wachovia -
10. Chase Prime
9. The Mortgage Specialists
8. Bayview Lending Group, LLC
7. American Equity Mortgage, Inc.
6. BankUnited
5. MortgageIT
4. Sallie Mae
3. Meridias Capital
2. Doral Financial Corp.
1. Residential Capital, LLC