October 9, 2015
Housing advocates chant, “Lone Star, Lone Star, you’re no good, stop destroying our neighborhoods” outside the firm’s Washington, D.C. office on September 30. Tweet published by @RenataPumarol https://twitter.com/RenataPumarol/status/649312795327090688

Foreclosures draw media coverage and NY Attorney General begins investigation of its servicing subsidiary

On Tuesday, the editorial board of the New York Times called out Lone Star Funds’ foreclosure practices and called on the government to suspend sales of discounted mortgages until it has procedures in place to protect the rights of homeowners.[1]

The next day, the Times reported that New York Attorney General Eric T. Schneiderman has opened an investigation into Caliber Home Loans, a mortgage company owned by Lone Star, after a “surge in consumer complaints.”[2]

Recent Lone Star media coverage:

Schneiderman was a co-chairman of the residential mortgage-backed securities task force that worked with the Justice Department and other state attorneys generals to negotiate tens of billions of dollars in settlements with Wall Street banks over their mortgage practices during the run-up to the financial crisis, according to the Times.[3]

Lone Star has faced escalating scrutiny for its role in buying distressed home mortgages from government entities.[4] Last Wednesday, housing activist groups, US Senator Elizabeth Warren and US Representative Michael Capuano rallied in Washington DC against these programs and met with officials from both HUD and the Federal Housing Finance Agency.[5] Activists also protested outside Lone Star’s Washington, D.C. office.[6]

Last month, we published a report on Caliber, asking whether investors can trust the ex-Countrywide managers who run Lone Star’s Caliber Home Loans to oversee a servicing portfolio that has ballooned tenfold since 2012.

Are Lone Star’s practices creating unnecessary headline risk for limited partners?

For more information, visit www.LoanSharkFunds.org.

 

 

 

[1] http://www.nytimes.com/2015/10/06/opinion/foreclosure-abuses-revisited.html

[2] http://www.nytimes.com/2015/10/07/business/dealbook/new-york-attorney-general-examining-private-equity-firms-mortgage-business.html

[3] http://www.nytimes.com/2015/10/07/business/dealbook/new-york-attorney-general-examining-private-equity-firms-mortgage-business.html

[4] http://dsnews.com/news/09-30-2015/elizabeth-warren-leads-protest-of-agency-npl-practices

http://www.nytimes.com/2015/10/07/business/dealbook/new-york-attorney-general-examining-private-equity-firms-mortgage-business.html

[5] http://dsnews.com/news/09-30-2015/elizabeth-warren-leads-protest-of-agency-npl-practices

[6] https://twitter.com/RenataPumarol/status/649312795327090688

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