An update from Legal Morass website:
On 23 June 2011, The Wall Street Journal reported that JP Morgan Chase had dismissed, from April 2011 through June 2011, over a thousand consumer credit card lawsuits within the states of California, Florida, Illinois, New Jersey and New York.
Legal Morass observation: These states reflect the bulk of the 28,000 credit card accounts comprised within the Chase/DebtOne post-judgment portfolio. The actual number of lawsuits that Chase abandoned could be much higher. Additionally, the problems associated with and within this specific portfolio extend into other Chase aged-debt portfolios, have for over a decade and have continued after the sale of this specific portfolio. The tremendous success of such practices, procedures and systems to collect upon the toxic assets bundled into these portfolios eventually migrated into other financial products including that of home mortgages and their associated securities.
On 24 June 2011, several sources, all anonymous, report that the Custodian of Records for the Chase/DebtOne post-judgment portfolio, Jason Lazinbat, was stripped of all duties. Mr. Lazinbat is/was, also, a Vice President and the Operations Manager of Chase Credit Card Litigation, San Antonio, Texas Credit Card Operations Center.
During the week of 4 July 2011, anonymous sources report that JP Morgan Chase notified employees of Chase's Card Litigation Support Group, centers located in Delaware and San Antonio, Texas, that the centers will be closed by 1 October 2011. Employees within these centers (estimates of up to 1,000 employees) will not be retained by Chase.
These centers managed, through a group of Chase attorneys, litigation by Chase to collect upon credit card toxic assets. Now, rather than directly suing consumers, Chase will bundle these toxic assets, current estimates of $ 5 Billion Dollars, into portfolios to be sold to aged debt buyers who will then attempt collection and litigation upon these consumer accounts.
Anonymous sources, also, report that certain high-level employees within these centers, were informed that Chase will not provide these high-level employees with criminal defense or payment for such defense, that such defense must be provided by these employees on their own. Anonymous sources also indicate that certain attorneys terminated by Chase in April have retained or are seeking criminal defense legal representation.
Saturday, July 23, 2011
White House to tackle housing reform after debt ceiling fight
A spokesperson for Rep. Barney Frank (D-Mass.) told HousingWire Friday the Obama administration has begun work on a proposal to extend the conforming loan limits, which are set to expire in October. In February, the administration put out a white paper, providing Congress three options for winding down mortgage giants Fannie Mae and Freddie Mac.
Allowing the conforming loan limits – the maximum size of a mortgage the government can guarantee or buy – would be the first step toward allowing the private market to rejuvenate, the administration said at the time.
However, funding for mortgages outside Fannie, Freddie or the Federal Housing Administration remains barren, even according to one of the industry's largest trade groups, the Mortgage Bankers Association.
"[Rep. Frank] believes that the administration is working on an extension, but he doesn’t know what legislative vehicle would be used," the spokesman said.
Rep. John Campbell (R-Calif.) and Rep. Gary Ackerman (D-N.Y.) introduced a bill last week that would extend the elevated loan limits for another two years.
FL AG Bondi: Poor Performance, not Politics Led to Ouster of Robo-signing Investigators
TAMPA (2011-7-21) -
Attorney General Pam Bondi is fighting back against allegations two of her foreclosure fraud investigators were forced to resign because of political pressure.
The two lawyers helped expose robo-signing and helped shut down so-called “foreclosure mills.”
They were forced to resign in May or be fired. A statement from Attorney General Pam Bondi issued Thursday says they were forced out because of poor performance, while the two women suggest political pressure did them in.
Theresa Edwards worked for three and a half years in the consumer crime section of the attorney general’s office — a lot of that time with her friend and colleague, June Clarkson.
When the foreclosure crisis hit Florida, Edwards says they started getting complaints about robo-signing.
People were signing documents with fake names. They didn’t have the required witnesses. And they weren’t reading the documents they were signing.
“They were just basically shoving paperwork through. They weren’t reviewing it properly,” Edwards said.
They were recognized for helping to bring robo-signing to national attention. The scandal forced banks to delay thousands of foreclosures as they re-evaluated how things were done.
In January, Bondi took over as attorney general. That’s when Edwards says things changed.
“Rather than sending out subpoenas, as you would expect investigators to do, they wanted us to send out letters inviting people in to discuss the problem with us,” Edwards said.
“Well, it certainly gives the target the heads up that we’re coming and we’re looking. And if there’s anything going on that’s not the way it should be, it gives the opportunity to cover up or hide whatever’s there,” she said.
Check out the rest here…
More on Bondi from attorney Matt Weidner's blog:Theresa Edwards and June Clark were not fired from the AG’s office, they were allowed to resign because they’re previously stellar performance suddenly became not so true. (Damn them, I knew these two dedicated public servants who racked up such impressive results were somehow bad, bad, bad.) I’m also certain now that all those accolades that were heaping upon them were wrong, wrong, wrong. But now look at this report, just issued today:
If you look at campaign contributions to Bondi, a certain address comes up a lot: 601 Riverside Avenue in Jacksonville. It’s the home of Lender Processing Services, its subsidiaries, and the company it recently spun off from, Fidelity National Financial.
Altogether, those companies gave $6,500 to Bondi’s campaign directly. They also gave $78,000 to the Republican Party of Florida – which was itself a major funder of Bondi’s campaign.
Finally, Lender Processing Services recently hired a new senior vice president for government affairs – Joe Jacquot, who until recently was an assistant attorney general for Bondi.
Lender Processing Services did not respond to a request for an interview. Jacquot told the Sarasota Herald-Tribune that he has “no particular insight” into the investigation against Lender Processing Services.
Association of Mortgage Investors Letter To JPMorgan Trust Administration RE: Notification of and Request to Address Pervasive Issues in RMBS Trusts
Washington, D.C. – The Association of Mortgage Investors (AMI) today sent letters to the major Trustees regarding their obligations under the pooling and servicing agreements (“PSAs”) governing residential mortgage-backed security (RMBS) Trusts. In sum, AMI’s reminds the Trustees of their legal responsibilities to RMBS certificate holders, ranging from state pensions, retirement systems, to life-insurers, including:
- Trustees Cannot be Negligent. Trustees cannot turn a “blind eye” to understanding pertinent facts and breach issues regarding the underlying collateral for RMBS, namely they cannot ignore the fact that breaches exist on the underlying mortgage loans.
- Transparency. Upon the discovery of Events of Default or representation or warranty breaches, Trustees must notify the appropriate parties and maintain transparency for these beneficiaries as well. They have obligations to provide investors with access to relevant deal documents, servicer notes, loan files, and other pertinent information. In situations where a party may be unwilling to cooperate, the Trustee must act accordingly.
- Action. In light of evidence of servicer Events of Default or breaches of any party’s representations and warranties, the Trustee is required to take appropriate action.
“The U.S. housing market place will neither function properly nor will private capital return to the market unless the Trustees take the actions required by law,” noted AMI Executive Director, Chris Katopis. “Many public institutions will suffer as a result of the Trustees turning the other way in light of blatant evidence of servicer breaches,” he continued. “At the heart of this situation are the actions of several entities – which as originators and as servicers — have shown an unwillingness to follow their contractual obligations and to make fair restitution to the investors including the public institutions investing in the U.S. RMBS market,” he also noted. AMI continues to advocate tirelessly for RMBS investors, so that RMBS Trustees may promptly resolve these issues, without investors resorting to costly and time consuming litigation to vindicate their legal rights.
SOURCE: http://the-ami.org/
AMI Trustee Letter to JPMorgan
Bank Foreclosure Deal Said to Be Held Up Over Liability Releases
July 22 (Bloomberg) — A push by U.S. banks to win broad liability releases has become one of the main obstacles in talks to resolve a nationwide probe of mortgage-servicing and foreclosure practices, two people briefed on the matter said.
The mortgage servicers want protection from additional state and federal claims over their mortgage practices as part of reaching a settlement that may exceed $20 billion, according to the people, who declined to be named because the talks are private. The banks are seeking releases that go beyond servicing of mortgages to include lending and securitization of loans, one of the people said.
That effort has encountered resistance from at least two states. Delaware Attorney General Beau Biden and New York Attorney General Eric Schneiderman, who are investigating the bundling of mortgage loans into securities, don’t want their probes blocked by a broad settlement of liability.
Biden said he has “strong reservations” about a deal that provides releases related to practices such as securitization and lending, because servicing is the focus of the nationwide settlement talks.
Check out the rest here…
U.S. Treasury to banks preparing for default: Yer on yer own.
Source: The Wall Street Journal
U.S. bank officials say they're getting little guidance from the Treasury Department, the Federal Reserve or other regulators as they map out how to deal with a possible downgrade in U.S. Treasury securities and default on the country's debt.
The nation's largest banks are spending hundreds of hours on contingency planning scenarios to prepare for the possibility that Congress won't raise the federal government's $14.29 trillion borrowing limit by the Aug. 2 deadline. Treasury Department officials warn that without an increased debt ceiling, the government will run out of cash to pay all its bills.
CFPB issues first stopgap mortgage rule
The Consumer Financial Protection Bureau issued its first substantial rule to the Federal Register Friday filling a regulatory gap for alternative mortgage originations.
The bureau opened Thursday without a director as Congress and the White House continue to debate how much power the bureau will yield. Some technical rules were issued then to exact the bureau's opening, but the rule issued Friday has a far more reaching impact.
It implements a section under the Dodd-Frank Act amending the Alternative Mortgage Transaction Parity Act of 1982. The amendment allows state-licensed loan originators to make alternative mortgages under federal law, rather than state law.
House clears bill to restructure CFPB, Obama threatens veto
The House of Representatives passed a bill late Thursday night 241-173 to restructure the newly launched Consumer Financial Protection Bureau and provide more power to the agency's oversight committee.
Rep. Sean Duffy (R-Wisc.) introduced The Consumer Financial Protection Safety and Soundness Improvement Act of 2011, or H.R. 1315, which would establish a bi-partisan five-member commission to carry out the duties of the agency instead of a director.
Friday, July 22, 2011
Register of Deeds Curtis Hertel Refers Orlans Attorney Marshall Isaacs for Criminal Investigation
Ingham County Register of Deeds Curtis Hertel Jr. has referred a top attorney from Orlans Associates, one of Michigan’s largest mortgage foreclosure law firms, to law enforcement for a criminal investigation of allegations of robo-signing.
Hertel tells Michigan Messenger that he referred Marshall Isaacs and examples of his signatures filed at the Ingham County Register of Deeds to law enforcement because he believes Isaacs did not sign all the legal documents. Hertel declined to identify the law enforcement agencies involved, but did note that there were at least two interested in the Isaacs case.
The Isaacs allegation were first reported by Michigan Messenger earlier this month. Authorities in Massachusetts placed Isaacs on a list of likely or suspected robo-signers based on an independent analysis by a fraud investigator. At the time Messenger reported on the Massachusetts situation, Hertel said his office was taking the allegations against Isaacs “very seriously.”
Check out the rest here…
Hertel tells Michigan Messenger that he referred Marshall Isaacs and examples of his signatures filed at the Ingham County Register of Deeds to law enforcement because he believes Isaacs did not sign all the legal documents. Hertel declined to identify the law enforcement agencies involved, but did note that there were at least two interested in the Isaacs case.
The Isaacs allegation were first reported by Michigan Messenger earlier this month. Authorities in Massachusetts placed Isaacs on a list of likely or suspected robo-signers based on an independent analysis by a fraud investigator. At the time Messenger reported on the Massachusetts situation, Hertel said his office was taking the allegations against Isaacs “very seriously.”
Check out the rest here…
Government Accountability Office (GAO) Audit of the Federal Reserve’s Emergency Actions
WASHINGTON, July 21 –The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression.
An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study.
“As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sanders (I-Vt.). “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”
Among the investigation’s key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. Said Sanders: “No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president.”
The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.
For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.
In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.
To Sanders, the conclusion is simple. “No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed,” he said.
The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.
The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.
A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. “The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street.”
GAO report below…
FEDERAL RESERVE SYSTEM Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assi...
An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study.
“As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sanders (I-Vt.). “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”
Among the investigation’s key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. Said Sanders: “No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president.”
The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.
For example, the CEO of JP Morgan Chase served on the New York Fed’s board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed’s emergency lending programs.
In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.
To Sanders, the conclusion is simple. “No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed,” he said.
The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.
The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.
A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. “The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street.”
###
GAO report below…
FEDERAL RESERVE SYSTEM Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assi...
Litigation costs mount at BofA, Chase over foreclosure, mortgage issues
Legal expenses at Bank of America (BAC: 10.22 +3.76%) and JPMorgan Chase (JPM: 41.95 +2.42%) more than doubled for the second quarter from the previous period, according to each bank's financial documents.
BofA reported $1.9 billion in litigation expenses for the second quarter, most of it related to its foreclosure and mortgage issues. It's an increase from $785 million for the previous quarter.
Chase reported $1.3 billion in legal expenses for the second quarter, more than triple from the $400 million for the previous quarter and nearly double the $700 million added to reserves one year ago. However, legal expenses peaked in the fourth quarter of 2010 at $1.5 billion.
Thursday, July 21, 2011
Statement by Will Galison to the Commission on Judicial Compensation.
Will sent me an email yesterday that he will be testifying at a Special Commission on Judicial Compensation. As you may not know, NY judges are fighting for more compensation. Here is Will's full testimony:
Members of the Panel:
I am here to support pay raises for judges, but only those judges who are in strict adherence to the rules and principles they are vowed to uphold.
Those judges who fail to uphold these rules and principles must not receive pay raises and must be punished for their misconduct.
Therefore, there cannot be pay raises until there exists an honest, effective agency that can determine which judges are doing their jobs properly and which are not.
At this time, no such agency exists.
The purpose of my testimony today is to prove that The Commission for Judicial Conduct is corrupt and dysfunctional and does not serve its function.
To illustrate this dysfunction I will present three examples of judges who have violated judicial rules and criminal laws, and whose misconduct the CJC has corruptly ignored.
The first example is NY Supreme Court Judge Herman Cahn, now retired. Judge Cahn broke judicial rules and criminal laws by withholding unsealed transcripts of a case from a party in that case. A complaint was made to the CJC, who declared simply that that they “found no evidence of wrongdoing”.
The absurdity of that statement is clear to anyone who examines the complaint, which I have submitted to the Committee here today.
The second judge whose misconduct was covered up by the CJC is Chief Judge Jonathan Lippman. A complaint against Lippman alleging judicial and criminal misconduct was officially submitted to the CJC weeks in advance of the Senate hearings for his Nomination.
This complaint was pending before the CJC during the nomination hearings but the CJC withheld it from the Senate Judiciary Committee so that it could not be considered by the Full Senate in its vote.
The third complaint is not from me but from a friend who could not be here today.
His complaint was made to the CJC and also to the FBI. I quote:
“On January 14, 2009, Judge [Joseph] Golia sent two …detectives from the Queens DA bureau to kidnap me, intimidate me and threaten that if I filed a complaint against [him], I would be in serious danger.
Despite these threats, I filed a complaint with the Ethics Committee of the OCA, alleging that Golia had made substantial misrepresentations on his Financial Disclosure Forms over seven years of reporting.
As a result of my allegations, the Ethics Committee sent Judge Golia…a demand for correction.
On April 9, 2010, I was informed by…the Ethics Committee…that Golia had amended his Financial Disclosure Forms as a result of my complaint…
Making misrepresentations on a Financial Disclosure form is a felony.
I believe that Golia made at least TWELVE… misrepresentations on his… Disclosure Statements,
I assume Golia does not want to go to jail, and he has already threatened me with retaliation if I brought his crimes to the attention of the authorities, which I have done.
I … believe that Golia will …try by any means to prevent me from pursuing this matter and testifying against him.
I believe that my life is in grave danger… having been threatened by a judge with such extraordinary influence over law enforcement and judiciary agencies….
Therefore, I am officially requesting a witness protection protocol [by the FBI] to ensure my personal safety until and while this matter is being prosecuted….
End quote.
That letter was written by Mr. Sunny Sheu, who could not be here today because three days after announcing to the OCA that Golia had lied on his amended financial disclosure form, Sunny was found lying in the street in a coma, and he died hours later.
The Medical Examiner ruled the cause of death as “blunt force trauma to the head with skull fractures and brain injuries” and that the manner of death was “undetermined”.
Under New York law, an undetermined death MUST be investigated, but over a year after his death, Sunny’s death has never been investigated and neither have his allegations of financial disclosure fraud by Golia. Nor have the complaints Sunny made about Golia to the CJC.
I invite your questions.
Connecticut AG Calls Banks to Meeting Over Mortgage Servicing
Connecticut Attorney General George Jepsen is seeking meetings with four U.S. lenders to discuss their foreclosure practices, saying they're failing to devote sufficient resources to servicing mortgages.
Jepsen wants to meet with representatives of Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc. and Ally Financial Inc., according to letters written to the companies and released by his office today.
"Although I appreciate the effort CitiMortgage has made to improve its practices in recent months, I remain concerned that it is failing to devote adequate resources to default servicing of residential loans in Connecticut," Jepsen wrote in a July 6 letter to Citigroup Chief Executive Officer Vikram Pandit.
Illinois AG gets help in robo-signing investigation
SPRINGFIELD — A group of 12 county recorders in Illinois are providing documents to Illinois Attorney General Lisa Madigan for her investigation into an illicit practice relating to the national real estate and subsequent foreclosure crises, known as "robo-signing."
“Robo-signing is actually a variety of practices. It can be mortgages individuals signing a document that they have no idea of what’s contained within the document and without verifying the information,” said Champaign County Record Barb Frasca. “It can mean someone forging an executive signature on a document or using their own name on the document with a fake title.”
Madigan launched her investigation earlier this year into Lender Processing Services and Nationwide Title Clearing, two of the largest loan servicing companies in the country.
County recorders, one for each of the state’s 102 counties, are stewards of deeds and other documents relating to real estate ownership, and often receive paperwork from loan servicing and other mortgage processing companies. Josh Langfelder, Sangamon County recorder, said he and the 11 other recorders voluntarily are assembling documents for Madigan.
“They gave us a sample of documents that may be related to our investigation, and they are gathering more documents to provide,” attorney general spokeswoman Robyn Ziegler said. “We’re reviewing the information they provided.”
Ziegler would not identify the documents provided or comment on whether the initial sampling will help in Madigan’s investigation, because it is ongoing.
JPMorgan Chase reorganizes troubled mortgage unit
JPMorgan Chase & Co is putting on a kinder, gentler face as it overhauls a unit that negotiates with borrowers whose homes are headed into foreclosure.
In a sign of the bank's sensitivity to the issue of callousness to borrowers, it is re-christening its "Loss Mitigation" department as "Borrower Assistance," according to Frank Bisignano, JPMorgan's chief administrative officer who was assigned by Chief Executive Jamie Dimon in February to fix the bank's mortgage problems.
Bisignano sent a memo to bank employees on Monday announcing a reorganization of the bank's residential mortgage business under new executives. JPMorgan's mortgage problems, including allegations of abusive foreclosure practices, are the main reason the bank fell as much as USD 7 billion short of its profit potential last year, Chief Executive Jamie Dimon told shareholders earlier this year.
Bisignano said in an interview with Reuters that JPMorgan is shifting its foreclosure unit more aggressively toward offering affordable terms to delinquent borrowers to help both consumers and the bank.
"Modifying a loan is much more economical for the firm than foreclosing," he also noted in the memo to employees that was obtained by Reuters.
On another front, Bisignano is deploying risk-management experts from JPMorgan's investment bank to work through problem portfolios of mortgage loans and bank-owned real estate. The effort will be led by Craig Delany, who handled critical short-term funding of JPMorgan during the financial crisis.
In a sign of the bank's sensitivity to the issue of callousness to borrowers, it is re-christening its "Loss Mitigation" department as "Borrower Assistance," according to Frank Bisignano, JPMorgan's chief administrative officer who was assigned by Chief Executive Jamie Dimon in February to fix the bank's mortgage problems.
Bisignano sent a memo to bank employees on Monday announcing a reorganization of the bank's residential mortgage business under new executives. JPMorgan's mortgage problems, including allegations of abusive foreclosure practices, are the main reason the bank fell as much as USD 7 billion short of its profit potential last year, Chief Executive Jamie Dimon told shareholders earlier this year.
Bisignano said in an interview with Reuters that JPMorgan is shifting its foreclosure unit more aggressively toward offering affordable terms to delinquent borrowers to help both consumers and the bank.
"Modifying a loan is much more economical for the firm than foreclosing," he also noted in the memo to employees that was obtained by Reuters.
On another front, Bisignano is deploying risk-management experts from JPMorgan's investment bank to work through problem portfolios of mortgage loans and bank-owned real estate. The effort will be led by Craig Delany, who handled critical short-term funding of JPMorgan during the financial crisis.
Lawmakers urge federal regulators to unseal foreclosure reviews
A group of 12 members of the House of Representatives sent a letter to federal regulators Wednesday, urging them to make public the upcoming review of loan files at the 14 largest mortgage servicers.
Rep. Maxine Waters (D-Calif.) led the House letter, and an identical one was sent from a group of senators, led by Sen. Robert Menendez (D-N.J.). In April, servicers signed consent orders with the Office of the Comptroller of the Currency, the Federal Reserve, and the Office of Thrift Supervision, requiring these banks to correct mishandled foreclosures.
Bank of America Defrauded Homeowners About Tax Benefits of Mortgages, Says Lawsuit Filed by MIFSP
On July 15, 2011, the Mortgage Institute For Financial Services Professionals (MIFSP) filed suit in U.S. Federal District Court alleging unfair and deceptive business practices against Bank of America (BOA). The lawsuit claims that in promoting mortgages, BOA defrauded consumers about the tax benefits of having a mortgage as documented in “The Red Report, When Banks Don’t Compete”, a study testing mortgage calculators made available to consumers on and through websites of hundreds of banks. “The faulty calculator on Bank of America’s website that consumers used to determine mortgage related tax savings, such as in comparing the rent versus buy option, significantly overstated and grossly misrepresented tax savings from the mortgage interest deduction, thus luring consumers into applying for and obtaining mortgages that may not have been in their financial best interest. Someone making a home mortgage decision using these calculators, and counting on that calculated tax benefit to make homeownership affordable, was misled from the outset,” say Leon Morris, Executive Director of MIFSP.
The multi-count suit alleges Bank of America’s actions were intentional because the bank touted the success of the calculators in converting consumers into “interested and motivated” mortgage applicants. “It’s sad that millions of homes have been lost to foreclosure some due to consumers making unsuitable mortgage decisions by relying, at least in part, on calculators that spewed highly inaccurate, misleading and biased information, and thereby believing the tax savings from having a mortgage would be far greater than it actually was. The amount of damages sought is to bring attention to the need for financial education and to the harm that results when consumers can’t distinguish between financial services professionals who provide objective, fair and balanced housing, tax and/or financial advice and those who pretend to. Bank of America is just one of the banks most likely profiting from exploiting the distorted view of housing affordability and suitability these faulty mortgage calculators were used to create. There are hundreds of others and they should all be held accountable,” says Morris.
The multi-count suit alleges Bank of America’s actions were intentional because the bank touted the success of the calculators in converting consumers into “interested and motivated” mortgage applicants. “It’s sad that millions of homes have been lost to foreclosure some due to consumers making unsuitable mortgage decisions by relying, at least in part, on calculators that spewed highly inaccurate, misleading and biased information, and thereby believing the tax savings from having a mortgage would be far greater than it actually was. The amount of damages sought is to bring attention to the need for financial education and to the harm that results when consumers can’t distinguish between financial services professionals who provide objective, fair and balanced housing, tax and/or financial advice and those who pretend to. Bank of America is just one of the banks most likely profiting from exploiting the distorted view of housing affordability and suitability these faulty mortgage calculators were used to create. There are hundreds of others and they should all be held accountable,” says Morris.
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NJ man admits role in mortgage-fraud scheme
Source: Dow Jones Newswires
A New Jersey man on Tuesday admitted to conspiring to participate in a scheme which caused lenders to release more than $40.8 million based on fraudulent mortgage-loan applications, according to the U.S. Department of Justice.
Charles Harvath, of Lodi, pleaded guilty to one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. According to documents filed in the case and statements made during the legal proceedings, 33-year-old Harvath and his co-conspirators recruited straw buyers who had good credit scores, but lacked the financial resources to qualify for a mortgage loan, to purchase a number of properties in New Jersey, Georgia and South Carolina.
Read the full story >>
A New Jersey man on Tuesday admitted to conspiring to participate in a scheme which caused lenders to release more than $40.8 million based on fraudulent mortgage-loan applications, according to the U.S. Department of Justice.
Charles Harvath, of Lodi, pleaded guilty to one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. According to documents filed in the case and statements made during the legal proceedings, 33-year-old Harvath and his co-conspirators recruited straw buyers who had good credit scores, but lacked the financial resources to qualify for a mortgage loan, to purchase a number of properties in New Jersey, Georgia and South Carolina.
Read the full story >>
Biloxi Buzz for Thursday
Political deadlock mixed with terrible housing market conditions will eventually turn America into a society of renters, according to the latest Housing Market Insights report from Morgan Stanley (MS: 21.50 +2.48%). High rates of mortgage delinquency, foreclosures and liquidations are ...
Read More »Tampa Man’s Home Sold in Foreclosure- He Had No Notice
TAMPA - The story of Shawn Hill's battle for his Tampa house starts with a knock on the door.
"He said, 'I'm here to serve you a notice of foreclosure,'" Hill recounted.
Hill remembers that day in 2008 like it was yesterday.
"You know, you have the wind knocked out of you," he said.
Fortunately, Hill was able to negotiate with his bank. He says they canceled the sale and approved loan modification.
Then, eleven days ago, he answered another knock at the door.
"He says, I'm an investor and I wanted to take a look at the property. The property is up for foreclosure this morning at the Hillsborough County Courthouse,'"Hill explained.
Hill thought he and his bank had reached an agreement. He says he was making payments and believed he was on track to save his home.
Hill's not sure what went wrong with the bank, but he thinks he knows what went wrong with the court.
He says he received no notice his house faced foreclosure again because the address his bank supplied to the court was incorrect, and so his mail was sent to the wrong homeowner.
"They may have discarded them or thrown them away, but I've never received a notice," Hill said.
Hill's address is 202. The address on record in the Hillsborough County Courthouse is 2020.
"He had no knowledge whatsoever that his home was being sold out from underneath him," Hill's attorney, Matthew Weidner said.
FTC mails $108 million in refund checks to Countrywide borrowers
The Federal Trade Commission will mail 450,177 refund checks totaling $108 million to homeowners allegedly overcharged on their mortgage by Countrywide Financial Corp.
"It’s astonishing that a single company could be responsible for overcharging more than 450,000 homeowners," said FTC Chairman Jon Leibowitz. "Countrywide’s unconscionable behavior harmed American consumers on a massive scale, and we are proud to be getting every single dollar back to hundreds of thousands of struggling consumers who can least afford to lose the money."
The FTC struck a settlement with Countrywide in June 2010 after alleging the subprime mortgage giant collected excessive fees from delinquent homeowners. The refunds will go to borrowers whose loans were serviced by Countrywide between Jan. 1, 2005, through July 1, 2008, and were subject to the allegedly illegal practices.
CFPB releases report comparing credit scores
The Consumer Financial Protection Bureau released a report this week highlighting some of the differences the bureau found when comparing credit scores sold to consumers to those used by lenders when deciding whether to issue a mortgage or another type of loan.
The report says consumers may be unaware of the differences between consumer and lender credit score reports, which could cause them to pursue loans either too confidently or too negatively depending on what the lender's score says about their overall risk profile.
The most widely used scores are the “FICO ” scores sold by FICO — the brand used to identify the Fair Isaac Corp. A joint venture of the three main consumer reporting agencies — VantageScore LLC — also produces credit scores.
There are a number of FICO score models in use by lenders, and many other credit score models besides FICO. Consumers can also purchase a wide range of credit scores. While some scores sold to consumers are used by lenders, others are "either not used by lenders at all or are used only infrequently," the CFPB said in its report. "It is important to note that many of the credit scores sold to lenders are not offered for sale to consumers," it said.
Wednesday, July 20, 2011
Lawmakers call for hearings after learning that banks still continue to use robo-signing
NEW YORK (AP) — Lawmakers and enforcement agencies called for hearings and further investigation Tuesday after learning that the illegal practice known as robo-signing has continued in the mortgage industry.
Sen. Sherrod Brown, D-Ohio., chair of the Financial Institutions and Consumer Protection Subcommittee, said the subcommittee will hold a hearing on the robo-signing issue.
Read more: http://www.seattlepi.com/news/article/Lawmakers-call-for-hearings-on-robo-signing-1472287.php#ixzz1Sc8MjC8T
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Sen. Sherrod Brown, D-Ohio., chair of the Financial Institutions and Consumer Protection Subcommittee, said the subcommittee will hold a hearing on the robo-signing issue.
"Wall Street and some in Washington want us to believe that robo-signing is a thing of the past," said Brown. "But the same risky practices that put our economy on the brink of collapse continue to infect the housing market."
Rep. Maxine Waters, D-Calif., a senior member of the House Committee on Financial Services said the lenders who continue the practice "need to be investigated and prosecuted." She told The Associated Press that she believed regulators should step in and that the absence of stronger regulation is "the reason why the system broke down in the first place." She said the county officials' findings show lenders will not stop practices like robo-signing on their own.
"(The lenders) have complete disregard for the damage they have already caused and have no intention of changing their ways," said Waters, who also called for more hearings on the issue.
Read more: http://www.seattlepi.com/news/article/Lawmakers-call-for-hearings-on-robo-signing-1472287.php#ixzz1Sc8MjC8T
Wells Fargo Shares Climb on Record Profit, $1.5B Cost-Cutting Plan
Wells Fargo & Co. (WFC), the biggest U.S. home lender, climbed the most since November as profit rose to a record and it announced a goal of cutting $1.5 billion in quarterly costs by the end of next year.
Wells Fargo advanced 5.7 percent as executives revealed details of a plan to shrink noninterest expense to $11 billion a quarter by the end of 2012. Net income climbed 29 percent to $3.95 billion, or 70 cents a diluted share, the San Francisco-based company said today in a statement.
“The market is applauding the detail they gave regarding new cost-saving initiatives,” said Shannon Stemm, an analyst at Edward Jones & Co. in St. Louis, who has a “hold” rating on the company. “Wells Fargo is ahead of its peers in recognizing that cutting expenses may be the only way to combat revenue weakness.”
Notorious robo-signers still working for Palm Harbor title company
By Mark Puente, Times Staff Writer
Two employees of a Palm Harbor title company embroiled in the nation’s robo-signing controversy are still signing hundreds of mortgage documents in other states.
The signatures of Bryan Bly and Crystal Moore, who work for Nationwide Title Clearing, showed up on 445 mortgage-related records with suspect signatures from October through June 30 in Guilford County, N.C.
The signatures appear on records from Mortgage Electronic Registration System, JPMorgan Chase, Wells Fargo and other lenders. Bly signed 290 documents; Moore, 155. The mortgage assignments and certificates of satisfaction transfer loans from one bank to another or certify a loan has been paid off, according to Jeff Thigpen, the Guilford County registrar of deeds.
Nationwide Title Clearing reassigned Bly and Moore after the robo-signing controversy erupted last year, said Pennsylvania-based spokesman Rick Grant. Nothing prevents them from signing new paperwork, he added. Grant stressed that the duo is not signing foreclosure documents.
Thigpen said Tuesday that a Nationwide official assured him that the firm has the proper authorization for Bly and Moore to sign the records.
The industry, however, needs to establish measures to protect the integrity of documents submitted for public records, Thigpen said in an e-mailed statement.
“Quite frankly, as a public recorder, I don’t want to be a policeman nor an accessory to fraud,” he said.
After the outrage in the fall, robo-signers simply shifted to another segment of the industry, said lawyer April Charney, a foreclosure expert with Jacksonville Area Legal Aid. She wants company executives held criminally responsible for allowing the practice of mass-signing documents.
Charney compared robo-signers to fire ants.
“You shoot them with Roundup in the hole, and they just pick up and set up shop somewhere else,” she said. “This is a never-ending, unfortunate situation. It’s fraud.”
You can check out the rest here…
Two employees of a Palm Harbor title company embroiled in the nation’s robo-signing controversy are still signing hundreds of mortgage documents in other states.
The signatures of Bryan Bly and Crystal Moore, who work for Nationwide Title Clearing, showed up on 445 mortgage-related records with suspect signatures from October through June 30 in Guilford County, N.C.
The signatures appear on records from Mortgage Electronic Registration System, JPMorgan Chase, Wells Fargo and other lenders. Bly signed 290 documents; Moore, 155. The mortgage assignments and certificates of satisfaction transfer loans from one bank to another or certify a loan has been paid off, according to Jeff Thigpen, the Guilford County registrar of deeds.
Nationwide Title Clearing reassigned Bly and Moore after the robo-signing controversy erupted last year, said Pennsylvania-based spokesman Rick Grant. Nothing prevents them from signing new paperwork, he added. Grant stressed that the duo is not signing foreclosure documents.
Thigpen said Tuesday that a Nationwide official assured him that the firm has the proper authorization for Bly and Moore to sign the records.
The industry, however, needs to establish measures to protect the integrity of documents submitted for public records, Thigpen said in an e-mailed statement.
“Quite frankly, as a public recorder, I don’t want to be a policeman nor an accessory to fraud,” he said.
After the outrage in the fall, robo-signers simply shifted to another segment of the industry, said lawyer April Charney, a foreclosure expert with Jacksonville Area Legal Aid. She wants company executives held criminally responsible for allowing the practice of mass-signing documents.
Charney compared robo-signers to fire ants.
“You shoot them with Roundup in the hole, and they just pick up and set up shop somewhere else,” she said. “This is a never-ending, unfortunate situation. It’s fraud.”
You can check out the rest here…
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