Getting Rich on Government-Backed Mortgages

Lending echoes the subprime mortgage boom that preceded the credit crisis of 2008. Then, as now, independent mortgage companies, the so-called nonbanks, dominated the business of making loans to people with blemished credit and low incomes. In the pre-crash years, companies such as New Century Financial Corp. helped spur the crisis with their shoddy underwriting standards. Using a line of credit from a major bank, they would offer mortgages essentially to anyone with a pulse. They would then quickly resell them into a market that repackaged them into high-risk securities that were destined for failure, infecting the financial system and requiring a government rescue.

No one is saying the system is close to another collapse. Yet nonbanks, more loosely regulated than the JPMorgan Chases of the world, are bigger players today than during the last mortgage bubble, according to a Brookings Institution report. They’re making almost half of new loans, compared with 19 percent in 2007. As before, many are companies you’ve never heard of, like American Financial Network, a closely held firm based in Brea, Calif. A few are better-known, such as LoanDepot, Freedom Mortgage, and the industry leader, Quicken Loans, with its ubiquitous Rocket Mortgage television commercials. read more »

A branch manager gets home loans for borrowers with weak credit or low incomes—and taxpayers back him up.

U.S. Launches Criminal Probe into Bitcoin Price Manipulation
Justice Department opens investigation into illicit trading
Agency is working with CFTC, which oversees crypto futures

The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter.

The investigation is focused on illegal practices that can influence prices -- such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling, said the people, who asked not to be identified because the review is private. Federal prosecutors are working with the Commodity Futures Trading Commission, a financial regulator that oversees derivatives tied to Bitcoin, the people said. read more »

Cambridge Analytica Whistle-Blower Decries Facebook Non-Answers

Wylie says social network should be regulated as a utility
Says Cambridge Analytica tested Trump themes back in 2014

Cambridge Analytica whistle-blower Christopher Wylie said Facebook Inc. Chief Executive Officer Mark Zuckerberg engaged in "a spectacle of non-answers" in testimony before U.S. and European lawmakers that would increase the chances the social network will face regulation and further harm the trust of its users.

Speaking at the Bloomberg Sooner Than You Think technology conference in Paris, Wylie expressed dismay that Zuckerberg has rebuffed invitations to appear before the U.K. parliament committee investigating Cambridge Analytica’s misuse of Facebook user data, and the role the consulting firm may have played in Britain’s 2016 EU referendum.

"Mark Zuckerberg continues to reject the invitation from the one committee that will actually ask tough questions and won’t let him get away with ‘I’ll get back to you, I’ll get back to you, I’ll get back to you,’" Wylie said.

The data scientist also said there was further information yet to come out about Cambridge Analytica and its interactions with Russian companies and individuals that may have played a role in trying to manipulate elections. Wylie said he had shared this information with the U.S. Federal Bureau of Investigation and the U.S. House and Senate Intelligence committees. read more »

Deutsche Bank mistakenly transferred $24 billion in 2014

Deutsche Bank erroneously transferred 21 billion euros ($24.62 billion) to Macquarie in 2014, a spokesman said on Thursday, the latest such error to come to light.

The transfer was a human error and not related to faulty technology, said a person familiar with the matter. It was corrected within a few hours and didn’t result in any financial damages.

Bloomberg News first reported the mistake.

In March, Deutsche Bank transferred 28 billion euros ($33 billion) instead of 28 billion yen ($257 million) to its own account at the derivative exchange Eurex. read more »

About $1.2 billion in cryptocurrency stolen since 2017

Criminals have stolen about $1.2 billion in cryptocurrencies since the beginning of 2017, as bitcoin’s popularity and the emergence of more than 1,500 digital tokens have put the spotlight on the unregulated sector, according to estimates from the Anti-Phishing Working Group released on Thursday.

The estimates were part of the non-profit group’s research on cryptocurrency and include reported and unreported theft.

“One problem that we’re seeing in addition to the criminal activity like drug trafficking and money laundering using cryptocurrencies is the theft of these tokens by bad guys,” Dave Jevans, chief executive officer of cryptocurrency security firm CipherTrace, told Reuters in an interview. read more »