Banks, regulators reach mortgage settlements

In two of the biggest civil settlements since the financial crisis, the nation's biggest banks agreed Monday to cough up nearly $19 billion to resolve federal allegations of mortgage misdeeds.

Bankers saw the settlements as a major step in providing more certainty for their balance sheets and possibly foreshadowing an end to the era of billion-dollar mea culpas and open-ended regulatory probes.

In one case, 10 banks settled with regulators for $8.5 billion. In the second, Bank of America Corp. agreed to pay almost $10.4 billion to Fannie Mae, the giant loan buyer that the U.S. seized and propped up with tens of billions of taxpayer dollars.

The deals come three years after prosecutors dropped criminal investigations against such subprime-mortgage kingpins as Countrywide Financial Corp.'s Angelo Mozilo in favor of pursuing civil fines.

"I'd have to say we're at least 75% of the way through with this process," said SNL Financial analyst Nancy Bush, arguing that it's time to concentrate on rebuilding the dysfunctional U.S. mortgage system. "The bankers are going to have to stop complaining about the government, and we'll have to stop this endless calling for someone to go to jail."

Housing advocates welcomed payouts for homeowners but asserted that the banks and bankers have gotten off easy, given the enormity of the economic damage to Main Street.

"When you think about $8.5 billion, and you know trillions of dollars in wealth have been lost by communities, it's not enough at all," said Sasha Werblin of the Greenlining Institute. "But some money is better than nothing."

The Bank of America settlement ends a bitter standoff between BofA, once the largest seller of home loans, and Fannie Mae, the nation's largest mortgage buyer.

The deal ends Fannie's demands that BofA buy back a mountain of soured loans issued by Countrywide, the high-risk Calabasas lender BofA acquired in 2008. BofA Chief Executive Brian Moynihan characterized the deal as "a significant step in resolving our remaining legacy mortgage issues."

BofA agreed to buy back $6.75 billion in residential mortgage loans sold to Fannie Mae and pay it an additional $3.6 billion in cash.

Moynihan had agreed previously to tens of billions of dollars in Countrywide-related claims. Those include shouldering the lion's share of last year's $25-billion settlement that five banks reached with the Obama administration and state attorneys general over so-called robo-signing of foreclosure paperwork and other abuses.

BofA still faces billions of dollars in claims from plaintiffs, including major insurers, the U.S. attorney's office in New York and the federal regulator overseeing Fannie Mae and fellow mortgage finance giant Freddie Mac.

But the bank has reached a tentative $8.5-billion settlement with holders of certain Countrywide mortgage bonds and another pending settlement for $2.4 million over its acquisition of Merrill Lynch & Co., also in 2008.

Because Countrywide left Bank of America with so many mortgage-related headaches, many view BofA's tangles with regulators as a barometer for the whole mortgage industry, SNL's Bush said. And as bank stock prices recovered over the last year, BofA led the way with a 109% gain for 2012.

The $8.5-million settlement with 10 banks Monday represented an acknowledgment by bank regulators that a previous attempt to review millions of foreclosures for bank wrongdoing had failed. Instead, they took a streamlined approach — the lump sum — in getting relief for troubled borrowers. Four other banks opted out of the settlement.

The settlement replaces a failed process that started in April 2011. In that arrangement, the Office of the Comptroller of the Currency and the Federal Reserve required the 14 big providers of mortgage customer service to hire consultants to review foreclosures from 2009 or 2010, potentially affecting 4.4 million borrowers. Nearly half a million borrowers signed up for the free reviews, which were supposed to lead to compensation in cases of bank misconduct.

But the consultants' tab totaled $1.5 billion as last year ended — without a single penny of relief going to borrowers. So the regulators and 10 of the banks, including mortgage giants Bank of America, Wells Fargo & Co. and JPMorgan Chase & Co., agreed to a plan for more direct aid.

The 10 banks will pay $3.3 billion to 3.8 million borrowers, who could receive amounts ranging from a few hundred dollars to $125,000 depending on evidence of wrongdoing. Reviews continue at the four banks that opted out of the new approach.

In addition, the 10 banks agreed to provide $5.2 billion in foreclosure prevention assistance to borrowers at risk of losing homes, including mortgage modifications or forgiveness of judgments against them.

Comptroller Tom Curry, the nation's top bank regulator, said the switch was a "significant change in direction." But he said it met the original objectives "by ensuring that consumers are the ones who will benefit and that they will benefit more quickly and in a more direct manner."

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Live at CES: Day 3

The Great Late-Night CES Pizza Hunt

It’s late. I’m tired. My feet hurt.

But damn, I could really go for some pizza. Dragging Nate with me.

Here we go…

12:15am: there’s supposed to be pizza at the mall across the street. It looks closed.

12:17am: Yeah it’s closed. Moving forward for pizza.

12:24am: $18 for a personal pizza? Hahahahahaha, no.

12:45am: Just hit the wall. So tired. To hell with pizza. We found Mexican food.

12:49am: Nate just got the largest order of quesadillas fries ever. It’s a half order.

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Matt Dallas comes out as gay

LOS ANGELES (TheWrap.com) – Matt Dallas appeared to come out of the closet on Sunday night. The star of the former ABC Family series “Kyle XY” (2006-2009) said on his Twitteraccount that he was engaged to marry his boyfriend musician Blue Hamilton.

In addition to a picture of Hamilton lounging on a couch with a dog, Dallas tweeted the following: “Starting off the year with a new fiancé, @bluehamilton. A great way to kick off 2013!”

Dallas’ publicist did not immediately respond to TheWrap’s requests for comment.

The actor does not appear to have commented publicly on his sexuality before, but the gay news blog “After Elton” reports that Dallas was the target of Perez Hilton, who openly speculated about his sexual orientation. Hilton reportedly dubbed the star “Kyle KY,” in reference to the lubricant.

Hilton did not immediately respond to an email requesting comment on Dallas’ announcement.

Dallas’ tweet follows a string of similar low-key announcements by the likes of Frank Ocean, Zachary Quinto and Jim Parsons, who said they were gay or had relationships with men in personal blogs or as a casual aside in interviews. This trend is a sign of shifting attitudes towards homosexuality. It is in marked contrast to the media-blitz that greeted Ellen DeGeneres more than a decade ago when she announced on the cover of Time that she was a lesbian.

In addition to the supernatural show “Kyle XY,” Dallas appeared on the 2009 TV series “Eastwick” and recently joined the cast of ABC Family’s “Baby Daddy.”

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Vital Signs: Perceptions: Babies Seem to Pick Up Language in Utero

A new study suggests that babies learn bits of their native languages even before they are born.

A baby develops the ability to hear by about 30 weeks’ gestation, so he can make out his mother’s voice for the last two months of pregnancy. Researchers tested 40 American and 40 Swedish newborns to see if they could distinguish between English and Swedish vowel sounds. The study is scheduled for future publication in the journal Acta Paediatrica.

The scientists gave the babies pacifiers that counted the number of sucks they made. As the babies sucked, they listened to Swedish and English vowel sounds; the more they sucked, the more the sounds were played. The researchers inferred the babies’ interest in the sound by the amount of sucking.

American babies consistently sucked more often when hearing Swedish vowel sounds, suggesting that the infants had not heard them before, and Swedish babies sucked more when hearing English vowels.

Learning so quickly after birth was unlikely, the researchers concluded, so the babies’ understanding the difference between native and nonnative sounds could be attributed only to prenatal learning.

“Even in late gestation, babies are doing what they’ll be doing throughout infancy and childhood — learning about language,” said the lead author, Christine Moon, a professor of psychology at Pacific Lutheran University.

---

The researchers set up a system to test how well an infant recognizes vowel sounds. They measured the number of times a baby sucked on a pacifier that triggered various vowel sounds. The babies tended to suck faster on their pacifier when they heard the vowel sounds of a foreign language as opposed to the one their mother’s spoke.

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Japan’s Cleanup After a Nuclear Accident Is Denounced

Ko Sasaki for The New York Times

Bags of contaminated soil outside the Naraha-Minami school near the Fukushima Daiichi nuclear power plant.

NARAHA, Japan — The decontamination crews at a deserted elementary school here are at the forefront of what Japan says is the most ambitious radiological cleanup the world has seen, one that promised to draw on cutting-edge technology from across the globe.

Ko Sasaki for The New York Times

Workers reflected in the glass of the Naraha-Minami Elementary School

But much of the work at the Naraha-Minami Elementary School, about 12 miles away from the ravaged Fukushima Daiichi nuclear power plant, tells another story. For eight hours a day, construction workers blast buildings with water, cut grass and shovel dirt and foliage into big black plastic bags — which, with nowhere to go, dot Naraha’s landscape like funeral mounds.

More than a year and a half since the nuclear crisis, much of Japan’s post-Fukushima cleanup remains primitive, slapdash and bereft of the cleanup methods lauded by government scientists as effective in removing harmful radioactive cesium from the environment.

Local businesses that responded to a government call to research and develop decontamination methods have found themselves largely left out. American and other foreign companies with proven expertise in environmental remediation, invited to Japan in June to show off their technologies, have similarly found little scope to participate.

Recent reports in the local media of cleanup crews dumping contaminated soil and leaves into rivers has focused attention on the sloppiness of the cleanup.

“What’s happening on the ground is a disgrace,” said Masafumi Shiga, president of Shiga Toso, a refurbishing company based in Iwaki, Fukushima. The company developed a more effective and safer way to remove cesium from concrete without using water, which could repollute the environment. “We’ve been ready to help for ages, but they say they’ve got their own way of cleaning up,” he said.

Shiga Toso’s technology was tested and identified by government scientists as “fit to deploy immediately,” but it has been used only at two small locations, including a concrete drain at the Naraha-Minami school.

Instead, both the central and local governments have handed over much of the 1 trillion yen decontamination effort to Japan’s largest construction companies. The politically connected companies have little radiological cleanup expertise and critics say they have cut corners to employ primitive — even potentially hazardous — techniques.

The construction companies have the great advantage of available manpower. Here in Naraha, about 1,500 cleanup workers are deployed every day to power-spray buildings, scrape soil off fields, and remove fallen leaves and undergrowth from forests and mountains, according to an official at the Maeda Corporation, which is in charge of the cleanup.

That number, the official said, will soon rise to 2,000, a large deployment rarely seen on even large-sale projects like dams and bridges.

The construction companies suggest new technologies may work, but are not necessarily cost-effective.

“In such a big undertaking, cost-effectiveness becomes very important,” said Takeshi Nishikawa, an executive based in Fukushima for the Kajima Corporation, Japan’s largest construction company. The company is in charge of the cleanup in the city of Tamura, a part of which lies within the 12-mile exclusion zone. “We bring skills and expertise to the project,” Mr. Nishikawa said.

Kajima also built the reactor buildings for all six reactors at the Fukushima Daiichi plant, leading some critics to question why control of the cleanup effort has been left to companies with deep ties to the nuclear industry.

Also worrying, industry experts say, are cleanup methods used by the construction companies that create loose contamination that can become airborne or enter the water.

At many sites, contaminated runoff from cleanup projects is not fully recovered and is being released into the environment, multiple people involved in the decontamination work said.

Makiko Inoue contributed reporting from Tokyo.

This article has been revised to reflect the following correction:

Correction: January 8, 2013

Earlier versions of this article misspelled the name of the construction company in charge of the cleanup of the city of Tamura. It is the Kajima Corporation, not Kashima.

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From gang member to team player

SAN FRANCISCO — Luis Aroche learned about violence at Leonard R. Flynn Elementary School, across from the projects where his friend Carl lived.

He remembers sitting down at his desk and seeing his teacher, Mrs. Foster, in tears. His class had just finished the Pledge of Allegiance.

"Carl was playing on the swings and got shot," Aroche said. "And died. Kindergarten. He got found laying in a pool of blood in the park," Aroche paused. Swallowed. Started up again. "He was my desk buddy. He would go with me to the bathroom. And now, Carl wasn't there.

"That was my first experience of loss. And I didn't understand it. To this day, I don't understand it."

Aroche since has become something of an expert on violence — as victim, perpetrator and now as part of a hoped-for solution. Last year, San Francisco Dist. Atty. George Gascon hired the former gang member to be his office's first "alternative sentencing planner," part of an effort to keep offenders from ending up back behind bars.

The position, criminal justice experts say, has no equivalent in any prosecutor's office in the country.

And Aroche is as singular as his job. An Aztec skull tattoo stretches down his right forearm to his hand, its grimace partly wiped away by laser removal. The day his juvenile record was sealed, he says, was the happiest of his life.

Today, he helps prosecutors figure out who among San Francisco's low-level offenders deserves a jail cell and who deserves a second chance.

He knows a lot about both.

::

If you were Aroche, 12 years old and living in the Mission District in 1990 — when gangs and crack cocaine meant funerals were as commonplace as quinceañeras — you got a tattoo, cut school and drank beer. You thought a stint in Pelican Bay State Prison was like going off to "Stanford or Yale." You practiced how to sit and talk and smoke like the toughest prisoners.

"We would learn how to iron our clothes using a comb, 'cause that's how you iron your pants in prison," Aroche said. "You iron it with the teeth of the comb … and then you put it underneath the mattress."

Aroche's first tattoo was a small cross on his left hand, in the soft web between thumb and forefinger. He got it in an alleyway not far from the studio apartment where he slept on the floor with his five brothers, three sisters, the occasional niece or nephew. His parents got the bed in the corner.

His Salvadoran mother was a chambermaid at a Fisherman's Wharf motel, his Puerto Rican father a security guard in the Navy shipyards.

And his older brothers? They would disappear for years. Aroche didn't know why until his father took him to visit San Quentin State Prison. They were "main men" in a notorious Northern California prison gang. When they were out, they were "the mayors of the Mission."

By the time Aroche was 15, he was drinking so much and incarcerated so often that he gave himself a test every night before he went to sleep. If he put out his hand and felt warm, smooth drywall, he knew he was home. If he felt cold, slick concrete, he was in custody.

One night he ended up in the hospital. He'd been drunk, hanging out in Lucky Alley, when a car drove up and the doors flew open. Aroche saw his friend get sliced with a machete. Gunshots rang out.

"And I remember some guy grabbing me and hitting me with a crowbar and stabbing me in my stomach," he said. "And I could feel the pierce of my stomach, just ripping me open.... And I thought, this is it. This is it. This is my life."

::

At the computer in his spartan office at the Hall of Justice, Aroche is poring over the official tale of another life in the balance: a 28-year-old woman on a downward spiral.

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A Google-a-Day Puzzle for Jan. 7

Our good friends at Google run a daily puzzle challenge and asked us to help get them out to the geeky masses. Each day’s puzzle will task your googling skills a little more, leading you to Google mastery. Each morning at 12:01 a.m. Eastern time you’ll see a new puzzle posted here.

SPOILER WARNING:
We leave the comments on so people can work together to find the answer. As such, if you want to figure it out all by yourself, DON’T READ THE COMMENTS!

Also, with the knowledge that because others may publish their answers before you do, if you want to be able to search for information without accidentally seeing the answer somewhere, you can use the Google-a-Day site’s search tool, which will automatically filter out published answers, to give you a spoiler-free experience.

And now, without further ado, we give you…

TODAY’S PUZZLE:

Note: Ad-blocking software may prevent display of the puzzle widget.

Ken is a husband and father from the San Francisco Bay Area, where he works as a civil engineer. He also wrote the NYT bestselling book "Geek Dad: Awesomely Geeky Projects for Dads and Kids to Share."

Read more by Ken Denmead

Follow @fitzwillie and @wiredgeekdad on Twitter.

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Calvin Harris returns to top of British album chart

LONDON (Reuters) – Scottish producer and singer Calvin Harris returned to the top of the British album charts with “18 Months” in the first week of 2013, the Official Charts Company said on Sunday.

The release, his third studio album, had hit the number one spot on its debut in November, and climbed from seventh place to regain the best sellers’ crown.

Singer Emeli Sandé slipped one notch to number two with “One Version of Events”, while Ed Sheeran jumped to third place from number 13 with his debut album “+”, now in its 69th week in the charts.

James Arthur, winner of the British version of the “X Factor” TV talent show last year, held onto first place in the singles rankings with “Impossible”.

“Scream and Shout” by U.S. producer will.i.am, featuring Britney Spears, stayed at number two, while Korean singer Psy’s global video hit “Gangnam Style” held steady in third place.

(Reporting by Tim Castle; Editing by Jason Webb)

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Alarm in Albuquerque Over Plan to End Methadone for Inmates

Mark Holm for The New York Times

Officials at New Mexico’s largest jail want to end its methadone program. Addicts like Penny Strayer hope otherwise.

ALBUQUERQUE — It has been almost four decades since Betty Jo Lopez started using heroin.

Her face gray and wizened well beyond her 59 years, Ms. Lopez would almost certainly still be addicted, if not for the fact that she is locked away in jail, not to mention the cup of pinkish liquid she downs every morning.

“It’s the only thing that allows me to live a normal life,” Ms. Lopez said of the concoction, which contains methadone, a drug used to treat opiate dependence. “These nurses that give it to me, they’re like my guardian angels.”

For the last six years, the Metropolitan Detention Center, New Mexico’s largest jail, has been administering methadone to inmates with drug addictions, one of a small number of jails and prisons around the country that do so.

At this vast complex, sprawled out among the mesas west of downtown Albuquerque, any inmate who was enrolled at a methadone clinic just before being arrested can get the drug behind bars. Pregnant inmates addicted to heroin are also eligible.

Here in New Mexico, which has long been plagued by one of the nation’s worst heroin scourges, there is no shortage of participants — hundreds each year — who have gone through the program.

In November, however, the jail’s warden, Ramon Rustin, said he wanted to stop treating inmates with methadone. Mr. Rustin said the program, which had been costing Bernalillo County about $10,000 a month, was too expensive.

Moreover, Mr. Rustin, a former warden of the Allegheny County Jail in Pennsylvania and a 32-year veteran of corrections work, said he did not believe that the program truly worked.

Of the hundred or so inmates receiving daily methadone doses, he said, there was little evidence of a reduction in recidivism, one of the program’s main selling points.

“My concern is that the courts and other authorities think that jail has become a treatment program, that it has become the community provider,” he said. “But jail is not the answer. Methadone programs belong in the community, not here.”

Mr. Rustin’s public stance has angered many in Albuquerque, where drug addiction has been passed down through generations in impoverished pockets of the city, as it has elsewhere across New Mexico.

Recovery advocates and community members argue that cutting people off from methadone is too dangerous, akin to taking insulin from a diabetic.

The New Mexico office of the Drug Policy Alliance, which promotes an overhaul to drug policy, has implored Mr. Rustin to reconsider his stance, saying in a letter that he did not have the medical expertise to make such a decision.

Last month, the Bernalillo County Commission ordered Mr. Rustin to extend the program, which also relies on about $200,000 in state financing annually, for two months until its results could be studied further.

“Addiction needs to be treated like any other health issue,” said Maggie Hart Stebbins, a county commissioner who supports the program.

“If we can treat addiction at the jail to the point where they stay clean and don’t reoffend, that saves us the cost of reincarcerating that person,” she said.

Hard data, though, is difficult to come by — hence the county’s coming review.

Darren Webb, the director of Recovery Services of New Mexico, a private contractor that runs the methadone program, said inmates were tracked after their release to ensure that they remained enrolled at outside methadone clinics.

While the outcome was never certain, Mr. Webb said, he maintained that providing methadone to inmates would give them a better chance of staying out of jail once they were released. “When they get out, they won’t be committing the same crimes they would if they were using,” he said. “They are functioning adults.”

In a study published in 2009 in The Journal of Substance Abuse Treatment, researchers found that male inmates in Baltimore who were treated with methadone were far more likely to continue their treatment in the community than inmates who received only counseling.

Those who received methadone behind bars were also more likely to be free of opioids and cocaine than those who received only counseling or started methadone treatment after their release.

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At Disney Parks, a Bracelet Meant to Build Loyalty (and Sales)

ORLANDO, Fla. — Imagine Walt Disney World with no entry turnstiles. Cash? Passé: Visitors would wear rubber bracelets encoded with credit card information, snapping up corn dogs and Mickey Mouse ears with a tap of the wrist. Smartphone alerts would signal when it is time to ride Space Mountain without standing in line.

Fantasyland? Hardly. It happens starting this spring.

Disney in the coming months plans to begin introducing a vacation management system called MyMagic+ that will drastically change the way Disney World visitors — some 30 million people a year — do just about everything.

The initiative is part of a broader effort, estimated by analysts to cost between $800 million and $1 billion to make visiting Disney parks less daunting and more amenable to modern consumer behavior. Disney is betting that happier guests will spend more money.

“If we can enhance the experience, more people will spend more of their leisure time with us,” said Thomas O. Staggs, chairman of Disney Parks and Resorts.

The ambitious plan moves Disney deeper into the hotly debated terrain of personal data collection. Like most major companies, Disney wants to have as much information about its customers’ preferences as it can get, so it can appeal to them more efficiently. The company already collects data to use in future sales campaigns, but parts of MyMagic+ will allow Disney for the first time to track guest behavior in minute detail.

Did you buy a balloon? What attractions did you ride and when? Did you shake Goofy’s hand, but snub Snow White? If you fully use MyMagic+, databases will be watching, allowing Disney to refine its offerings and customize its marketing messages.

Disney is aware of potential privacy concerns, especially regarding children. The plan, which comes as the federal government is trying to strengthen online privacy protections, could be troublesome for a company that some consumers worry is already too controlling.

But Disney has decided that MyMagic+ is essential. The company must aggressively weave new technology into its parks — without damaging the sense of nostalgia on which the experience depends — or risk becoming irrelevant to future generations, Mr. Staggs said. From a business perspective, he added, MyMagic+ could be “transformational.”

Aside from benefiting Disney’s bottom line, the initiative could alter the global theme parks business. Disney is not the first vacation company to use wristbands equipped with radio frequency identification, or RFID, chips. Great Wolf Resorts, an operator of 11 water parks in North America, has been using them since 2006. But Disney’s global parks operation, which has an estimated 121.4 million admissions a year and generates $12.9 billion in revenue, is so huge that it can greatly influence consumer behavior.

“When Disney makes a move, it moves the culture,” said Steve Brown, chief operating officer for Lo-Q, a British company that provides line management and ticketing systems for theme parks and zoos.

Disney World guests currently plod through entrance turnstiles, redeeming paper tickets, and then decide what to ride; food and merchandise are bought with cash or credit cards. (Disney hotel key cards can also be used to charge items.) People race to FastPass kiosks, which dispense a limited number of free line-skipping tickets. But gridlock quickly sets in and most people wait. And wait.

In contrast, MyMagic+ will allow users of a new Web site and app — called My Disney Experience — to preselect three FastPasses before they leave home for rides or V.I.P. seating for parades, fireworks and character meet-and-greets. Orlando-bound guests can also preregister for RFID bracelets. These so-called MagicBands will function as room key, park ticket, FastPass and credit card.

MagicBands can also be encoded with all sorts of personal details, allowing for more personalized interaction with Disney employees. Before, the employee playing Cinderella could say hello only in a general way. Now — if parents opt in — hidden sensors will read MagicBand data, providing information needed for a personalized greeting: “Hi, Angie,” the character might say without prompting. “I understand it’s your birthday.”

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