the buzz log

Ruth Madoff's Statement

It's no secret that Bernie Madoff doesn't have many friends right now. In fact, newspapers can't seem to write his name without describing him as "disgraced." But what might come as a surprise is that his wife, Ruth, may be even more of a social pariah—not for what she's done, but rather for her silence regarding her husband's tremendous fall from grace.

Mrs. Madoff is aware of the brewing rage directed toward her. On Monday, she released a statement after her husband was sentenced to a staggering 150 years in prison. The statement acknowledged that her silence may have been interpreted as "indifference or lack of sympathy for the victims of my husband Bernie's crime." However, Mrs. Madoff writes that this is "exactly the opposite of the truth." She continues, "Not a day goes by when I don't ache over the stories that I have heard and read."

Still, while Mrs. Madoff hasn't been charged with any crime whatsoever, there are still those who believe it's open season on the Manhattanite. The New York Post recently published an article reporting that Mrs. Madoff was spotted riding a New York subway. Upon being recognized, Mrs. Madoff, obviously annoyed, asked the Post photographer if she was "having fun embarrassing [her]—and ruining [her] life."

But that wasn't the first public awkward moment suffered by Mrs. Madoff. Earlier this month, The New York Times reported that her hair salon, where she used to receive highlights every six weeks, told her not to return. The Times reports that Mrs. Madoff "is viewed as an unrepentant beneficiary of ill-gotten wealth, a petite and well-dressed embodiment of the collective, bloated greed that helped topple the stock market and the housing industry." Whether or not the public scorn is justified seems to be beside the point.

For whatever it's worth (probably not much to the victims of her husband's fraud), Mrs. Madoff has given up her claim to millions of dollars in joint assets. According to an agreement with United States prosecutors, Ruth will be left with $2.5 million. Sounds like a lot of money, but The Wall Street Journal reports that Mrs. Madoff may "still face claims" from government agencies like the SEC and trustees that are liquidating Bernie's assets.

Assuming she invests with a non-crook, Mrs. Madoff can expect to earn about $125,000 per year on her $2.5 million settlement. Adjusting to life on a fixed income will require a significant change in lifestyle. Still, that's a problem that many of her husband's victims would surely love to have.

Follow Buzz Log on Twitter

Filed under: Finance, Crime

Being a Texas billionaire who loved cricket should've raised some red flags immediately. Now Robert Allen Stanford may be charged as the newest scam artist on the financial block...once the Securities and Exchange Commission finds him.

Not that Searchers haven't been looking for the money manager themselves. Queries for "allen stanford" (also known—and misspelled—online as "robert allen stanford," "r allen stanford," "sir alan stanford," and the like) popped up into the top 5,000 searches after a "caravan" of feds drove up February 17 and took over the headquarters of his financial services company, the Stanford Group, under charges of old-fashioned fraud.

Sir Stanford, however, wasn't there to hand over the keys and to face charges, although his cohorts were. His whereabouts were unknown. One report says he tried to hire a private jet to fly to his Caribbean home but ignominiously failed due to a rejected credit card. It appears only wire transfers are acceptable from sweaty-palmed financiers.

The Stanford Group (which has more than 50 offices spread across six continents), ratcheted triple the searches of its founder. Stanford, however, may only be a pip-squeak version of Bernie Madoff: Despite allegedly perpetuating an $8 billion fraud (Madoff's damage is an estimated $50 billion), there's no evidence of a Ponzi scheme here, according to The Business Insider.

The fraud involved telling customers that the CDs they were buying came from investments in "easily sellable financial instruments, monitored by more than 20 analysts and audited by regulators on the Caribbean island of Antigua." Instead, Stanford and chief financial officer—otherwise known as the accomplice—James Davis allegedly handled the whole thing, hid 90 percent from oversight, and funneled a chunk into not-so-easy-to-sell assets like real estate and private equity investments. 

Still, the why of Stanford's alleged fraud demands an explanation, and people have been seeking clues into the fifth-generation Texan's background ("r allen stanford biography"). His Sir title came courtesy of Antigua—although its prime minister once called him "haughty, arrogant and obnoxious." The West Indies island is also where he based his Stanford International Bank and flamboyantly funded the Stanford Superstars cricket team, which beat mighty England in November and won $20 million. Unfortunately, the chance to recoup any losses through cricket is nil for now: The Wall Street Journal reported that the English Cricket Board "suspended negotiations with Mr. Stanford about further matches."

Also, as might be expected from someone who had $2.2 billion to his name, Stanford donated to political campaigns, and Republican senators are now moving fast to shuffle contributions to charity. (They might want to consider St. Jude Hospital, which Stanford had supported.)

The Baylor University graduate also once claimed kinship to Leland Stanford, the founder of the private  California university, but the school sued in October to stop that nonsense. That lawsuit will probably have to move a little further down on the financier's docket.

Filed under: Finance, Government, Scandals, Economics

If you are among the privileged, impacted few where homes—even in this stalled market—average around a half-million dollars and you want to buy one, then you may have a loan application deadline coming up...if you haven't missed it already.

Looks like some may already know, given the late Search surge for "jumbo loan," "jumbo mortgage, and "conforming loan limits". Before getting into deadlines, it's time for a look back to when the federal government took its first baby steps in economic stimulations...

Traditionally, to borrow for homes worth more than $417,000, people had to either take out jumbo loans—normally charged a higher interest rate than so-called conforming loans—or succumb to those oh-so-alluring adjustable rate mortgages (ARMs). Once the initial interest rates expired on those pesky ARMs, of course, all sorts of agony was unleashed.

Then Congress raised the limits on regular fixed-rate loans so that homebuyers could escape those grasping ARMs. But raising the limit apparently didn't mean lowering the interest rates for a while and, as Bankrate reported back in March, the restrictions were about as tough as the first-child clause at the Bank of Rumpelstiltskin.

Now back to the deadlines: Bankrate reports that by January 1, buyers or existing homeowners who want a loan somewhere in the neighborhood of $625,500 to $729,750 need to apply before Dec. 31, if their lender hasn't already locked in rates. That means people in about 25 states will be scrambling to gather together paperwork to get approvals done before the new year rolls in.

However, just to make things exciting, the Boston Globe reminds people that the Housing and Economic Recovery Act will kick in "permanent jumbo size limits" which—as in all things in life—will help some, but not others. The article gives some complicated but detailed advice on how to sift through the different qualifications and rate disparities.

With an ever-changing mortgage landscape, it's good to keep up-to-date on who's loaning what, jumbo or not. For those searching for details on "fha loan limits" and "fha loan rates," NPR takes a look at Federal Housing Administration loans (FHA). The News Observer examines the impossible dream of no down payment (often for rural residents or those in the military) via the United States Department of Agriculture and the Veteran Administration. Bankrate compares conventional, VA, and FHA loans.

Filed under: Finance, Housing, Economics