Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62160 Sat, 29 Apr 2017 12:46:43 GMT $1B Louisiana bank failure is costliest since financial crisis http://implode-explode.com/viewnews/2017-04-29_1BLouisianabankfailureiscostliestsincefinancialcrisis.html Regulators on Friday seized New Orleans-based First NBC Bank in the costliest bank failure since the financial crisis, with cleanup costs estimated at $1 billion .

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The billion-dollar loss comes from the difference in the FDIC's obligations and what it can expect to collect from the assets. The last time the FDIC paid more than $1 billion to absorb losses was when two banks in Puerto Rico failed in 2010.

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First NBC was founded in 2006 and proclaimed its mission to be helping Louisiana rebuild from Hurricane Katrina. The bank got in trouble in part because it became unusually reliant on projects that revolve around federal tax credits for low-income or less developed areas. The bank would finance projects and get tax credits good in the future. But regulators decided that First NBC was overstating the value of those tax credits, forcing the bank to write down their value. Regulators increased scrutiny and ordered the bank to raise capital, but the bank had to set aside another $86 million in the last three months of 2016 to cover increasing loan losses.

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iehi-feed-62149 Thu, 27 Apr 2017 14:53:20 GMT Canada's Biggest Mortgage Lender Crashes; Gets Rescue -- End of Line For Housing Bubble? http://implode-explode.com/viewnews/2017-04-27_CanadasBiggestMortgageLenderCrashesGetsRescueEndofLineForHousing.html Today... the stock of Home Capital Group cratered by over 60%, its biggest drop on record, after the company disclosed that it struck an emergency liquidity arrangement for a C$2 billion ($1.5 billion) credit line to counter evaporating deposits at terms that will leave the alternative mortgage lender unable to meet financial targets, and worse, may leave it insolvent in very short notice.

As part of this inevitable outcome, one which presages the company's eventual disintegration and likely liquidation, Bloomberg reports that the non-binding rescue loan with an unnamed counterparty will be secured by a portfolio of mortgage loans originated by Home Trust, the Toronto-based firm said in a statement Wednesday. Home Capital shares dropped by 61% in Toronto to the lowest since 2003, dragging down other home lenders. Equitable Group Inc. fell 17 percent, Street Capital Group Inc. fell 13 percent, while First National Financial Corp. declined 7.6 percent. In short, the Canadian mortgage bubble has finally burst.

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iehi-feed-62114 Fri, 21 Apr 2017 01:27:53 GMT Ocwen Sued, Shut Down in Multiple States http://implode-explode.com/viewnews/2017-04-20_OcwenSuedShutDowninMultipleStates.html There are bad days, and worse days, and there are days like Ocwen Financial Corporation (OFC) had on Thursday. The company was not only sued on multiple grounds by both the Consumer Financial Protection Bureau (CFPB) and the State of Florida, but saw its operations effectively shut down by the North Carolina Commissioner of Banks.

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First, the North Carolina commissioner, Ray Grace, issued a cease and desist order against the company after a determination that it "has engaged in, or is engaging in, or is about to engage in, acts of practices constituting violations of state and federal law and applicable regulations."

... On February 28, 2015, Florida, Maryland, Massachusetts, Mississippi, Montana, and Washington conducted a multi-state examination of the company covering operations from January 1, 2013 to the examination date. That examination identified several violations of state and federal law including consumer escrow accounts that could not be reconciled and willful and ongoing unlicensed activity in certain states. The examination also found that the company's financial condition was deteriorating.

The order alleges the company subsequently failed to respond to requests for information on its apparent unlicensed activity and company executives were warned the violations were unacceptable and would not be tolerated. OFC partially addressed these violations after a lapse of two years, but the Commissioner's order states that unlicensed activity is believed to continue in some jurisdictions.

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In December 2016 OFC and state regulators entered into a Memorandum of Understanding (MOU) which required OFC to retain an independent auditing firm to perform a comprehensive audit and reconciliation of all escrow accounts with a report submitted to and approved by the MMC by January 13, 2017.  On that date, the company informed the MMC that the $1.5 billion cost of that audit was beyond its financial capability and asked to sample 457 accounts out of the 2.5 million it had serviced over the initial audit period.  The company has also failed to provide a suitable going-forward business plan to address its financial condition.

The Cease and Desist Order requires OFC to immediately cease acquiring new mortgage servicing rights and acquiring or originating new residential mortgages until it provides a sufficient analysis of its financial condition and provides state regulators with a reconcilement of its escrow accounts showing that consumer funds are appropriately collected, accounted for, and distributed.  OFC has 20 days in which to request a hearing.

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iehi-feed-61994 Fri, 31 Mar 2017 19:55:42 GMT Puerto Rico Set To Get "Greece'd" - Brad Setser http://implode-explode.com/viewnews/2017-03-31_PuertoRicoSetToGetGreecedBradSetser.html 3) While creditors have complained that Puerto Rico isn't doing enough, I worry that there is still too much consolidation too fast: Puerto Rico's output is projected to fall by another 10 percentage points over the next five years, which would make Puerto Rico's ten year economic contraction as deep as that experienced by Greece.

Sadly, this is a realistic outcome if you combine five to six percentage points of consolidation, a multiplier of 1.5 (especially as much of the consolidation is offsetting a fall in federal funding) and negative trend growth. There is a real risk that the coming contraction generates further outmigration, undermining the basis for any eventual recovery. Puerto Ricans are not required to stay on on-island. A shrinking population ultimately means a shrinking tax base.

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Basically, Puerto Rico tried to avoid a draconian consolidation after its 2007 slump through running down pension assets (and for a while running up debt) and by taking advantage of Obama era policy changes--but now has run out of rope.

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iehi-feed-59923 Tue, 31 May 2016 17:26:53 GMT IMF Begins Distancing Itself From Neoliberalism http://implode-explode.com/viewnews/2016-05-31_IMFBeginsDistancingItselfFromNeoliberalism.html iehi-feed-59683 Mon, 02 May 2016 14:57:27 GMT Piggy bank raiders: half of parents dip into children's savings (UK) http://implode-explode.com/viewnews/2016-05-02_PiggybankraidershalfofparentsdipintochildrenssavingsUK.html iehi-feed-59615 Fri, 22 Apr 2016 21:15:56 GMT Drvenkar Custom Homes / Tex Best Custom Builders files for Chapter 7 bankruptcy http://implode-explode.com/viewnews/2016-04-22_DrvenkarCustomHomesTexBestCustomBuildersfilesforChapter7bankrupt.html iehi-feed-59272 Wed, 16 Mar 2016 13:56:08 GMT W.J. Bradley Mortgage Capital permanently closes down http://implode-explode.com/viewnews/2016-03-16_WJBradleyMortgageCapitalpermanentlyclosesdown.html iehi-feed-58934 Sun, 07 Feb 2016 21:04:27 GMT Why doesn't America's "4.9%" unemployment rate feel great? http://implode-explode.com/viewnews/2016-02-07_WhydoesntAmericas49unemploymentratefeelgreat.html iehi-feed-58726 Sat, 16 Jan 2016 21:40:20 GMT Global Earnings Downgrades Haven't Been This Bad in Seven Years http://implode-explode.com/viewnews/2016-01-16_GlobalEarningsDowngradesHaventBeenThisBadinSevenYears.html iehi-feed-57966 Sun, 11 Oct 2015 14:37:37 GMT IMF: keep interest rates low or risk another crash http://implode-explode.com/viewnews/2015-10-11_IMFkeepinterestratesloworriskanothercrash.html iehi-feed-57448 Thu, 13 Aug 2015 12:28:21 GMT Is The Price Of Gold Really Headed To $20,000? http://implode-explode.com/viewnews/2015-08-13_IsThePriceOfGoldReallyHeadedTo20000.html iehi-feed-56316 Mon, 16 Mar 2015 18:26:50 GMT The Austrian Black Swan Claims Its First Foreign Casualty: German Duesselhyp Collapses, To Be Bailed Out http://implode-explode.com/viewnews/2015-03-16_TheAustrianBlackSwanClaimsItsFirstForeignCasualtyGermanDuesselhy.html iehi-feed-56312 Mon, 16 Mar 2015 14:00:45 GMT Greek currency crisis calls for controlled exit http://implode-explode.com/viewnews/2015-03-16_Greekcurrencycrisiscallsforcontrolledexit.html iehi-feed-56198 Mon, 02 Mar 2015 14:24:53 GMT Creditors Face Losses as Austria Halts Hypo Alpe Support http://implode-explode.com/viewnews/2015-03-02_CreditorsFaceLossesasAustriaHaltsHypoAlpeSupport.html Hypo Alpe-Adria-Bank International AG creditors face losses after the Austrian government ruled out providing fresh capital and put the failed lender into resolution.

After 5.5 billion euros ($6.2 billion) of taxpayer money was injected into Hypo Alpe over five years, Chancellor Werner Faymann's administration decided on March 1 to stop supporting Hypo Alpe's bad bank, Heta Asset Resolution AG, when it was told Heta may need another 7.6 billion euros.

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iehi-feed-56194 Sun, 01 Mar 2015 21:10:59 GMT Doral Financial in Puerto Rico Is (FINALLY) Shut Down by Regulators http://implode-explode.com/viewnews/2015-03-01_DoralFinancialinPuertoRicoIsFINALLYShutDownbyRegulators.html iehi-feed-55908 Tue, 20 Jan 2015 14:02:48 GMT Swiss Franc Wiped Out Everest's Main Fund http://implode-explode.com/viewnews/2015-01-20_SwissFrancWipedOutEverestsMainFund.html iehi-feed-55604 Sun, 07 Dec 2014 14:20:50 GMT Ukraine's electricity crisis deepens as a plan to import South African coal collapses http://implode-explode.com/viewnews/2014-12-07_UkraineselectricitycrisisdeepensasaplantoimportSouthAfricancoalc.html iehi-feed-55479 Wed, 19 Nov 2014 17:23:44 GMT U.S. housing starts fall 2.8% in October http://implode-explode.com/viewnews/2014-11-19_UShousingstartsfall28inOctober.html iehi-feed-55458 Tue, 18 Nov 2014 16:04:41 GMT Russia May Go For Its Own Space Station, Walk From ISS http://implode-explode.com/viewnews/2014-11-18_RussiaMayGoForItsOwnSpaceStationWalkFromISS.html