The Fed made history and shut down a Colorado bank, a role normally reserved for state regulators

WASHINGTON — The Federal Reserve Board made history Friday by invoking special powers to shut down a Colorado bank, stepping into a role normally reserved for state regulators.

The central bank appointed the Federal Deposit Insurance Corp. the receiver for the $1.38 billion-asset Community Banks of Colorado in Greenwood. The FDIC then sold the bank’s operations to Bank Midwest NA in Kansas City, Mo.

The move, which followed three routine failures in the Southeast earlier in the evening, was peculiar on multiple fronts.

The Fed, the federal regulator for hundreds of state-chartered banks in the U.S., before Friday had never used its authority to close a bank. Under prompt corrective action rules established at the end of the savings and loan crisis, the central bank has the power to put one of its so-called state member banks in receivership after it becomes "critically undercapitalized." The Fed has 90 days to act after the bank reaches that status.

Read on.

Saturday Humor From JP Morgan

Because one is born every minute (even if one is ineligible for a mortgage with JPMC).

JPM Housing

Biloxi Buzz for Saturday

Obama Announces Iraq Troops Will Be Withdrawn By End Of This Year

GRAPHIC VIDEO: New Footage Shows Gaddafi's Capture

Obama Has Written Personal Checks To Struggling Americans

Saved From The Brink Of Death, Veteran Keeps Chasing His Dreams

Principal reduction still alive in robo-signing settlement

Republican Accused Of Paying For Sex With Male Escort

GOP Gov's Lawsuit Against Obama Administration Thrown Out

Solyndra Stiffed Lobbyist, Trying to Sway U.S.

Solyndra LLC, the solar-panel maker that collapsed after getting a U.S. loan guarantee, hired aWashington lobbying firm weeks before its bankruptcy in what may have been a last-ditch effort to sway U.S. lawmakers investigating the company.

The Glover Park Group LLC did $20,000 of work for Solyndra after registering as its lobbyist in July, according to documents filed yesterday. Solyndra never paid the firm, according to Joel Johnson, a Glover Park managing director.

Read on.

Potential felony charges make mortgage servicers pause Nevada foreclosures

Many mortgage servicers stopped initiating foreclosures in Nevada because of a new law, which carried threats of criminal penalties for faulty filings.

Assembly Bill 284 took effect Oct. 1, making it a felony if a mortgage servicer or trustee made false representations concerning a title. There also will be a $5,000 fine assessed if fraud, such as robo-signing, is detected. The new law requires servicers to provide a new affidavit that provides the amount due on the mortgage, who is in possession of the note and who has the authority to foreclose.

Read on.

FICO tells mortgage servicers to reach out to strategic defaulters

Consumer credit analytics firm FICO (FICO: 25.96 +2.12%) said mortgage servicers need to take a more proactive approach to borrowers they feel are likely to strategically default on their mortgage. The prevention of future litigation costs, FICO said, is alone worth the effort.

"Within the current population, the goal is to spot likely strategic defaulters before a delinquency develops, enabling servicers to intervene early," FICO said Wednesday in a blog post.

Mortgage servicers should give potential strategic defaulters advice on other ways to relieve their mortgage burden such as a short sale or loan modification, the company said.

Read on.

Busy mother shows her support for Occupy Wall Street; Open thread

Biloxi Buzz for Friday

Debate on housing restart questions 30-year fixed-rate mortgages

As Veterans Fight For Needed Care, Long-Term Funding Remains In Jeopardy

Mark Madoff's Widow Chronicles Family Fall In New Book

Hilary Clinton, Afghan President Mock Herman Cain Over Comments

Protesters To Challenge Law Banning Supreme Court Protests

Senate GOP Blocks Bid To Help Teachers, First Responders

Major City Takes Step Toward Helping Uninsured Residents

Forced Placed Insurance Leads to Fraudclosure, Attorney Calls it a Case of Fraud

HERNANDO BEACH – Thousands of people in Hernando County are being forced into foreclosure because of what banks call “force placed insurance.” But some homeowners and their advocates call it fraud, and they are fighting back.

At issue is homeowner’s insurance. If a homeowner doesn’t pay it, the bank will buy insurance and bill the homeowner. In Hernando County, where sinkholes are rampant, insurance rates have skyrocketed.

It has left people like Joyce Wogan vulnerable. Wogan pays her mortgage on time every month, but she just got an ominous letter from the bank. . It read in part “….your current flood insurance doesn’t meet the minimum required amount. We’ve purchased temporary insurance to protect our investment in the property.”

Here’s the problem: Wogan’s annual insurance premium went from rough $1,500.00 a year to more than $7,000.00.

Wogan’s attorney calls it a case of fraud.

Check out the rest here…

NJ SC: “We question whether Lehman’s designation to MERS as its nominee remains in effect after Lehman declared bankruptcy”

Hat tip by Stop Foreclosure Fraud website:

Aurora-v-Toledo-10-18-11-NJSC w

BoA robo-digital sigs (clicked WRONG name on drop down box) & robo-notary. FRAUD to the Nth Degree!

Bank of America FRAUD!

ReconTrust FRAUD!

Washington State Fraud (but could, and almost assuredly has, occurred anywhere in the corrupted U.S.A.)

Please note signor’s sig and then name of who was supposed to “digitally-sign”. One name “digitally signed” the documents over a totally different name of whose signatures was supposed to be digitally applied to the document.

Oh, and then, in a total exit from reality, a digital notary swears that the wrong digital signor was present.

MORE HERE ON Tanner Deaton robo-digitally applied signatures & notarizations! The Art & Science of Robosigning in the Post Scandal Era (New & Improved Document Fabrication) http://ning.it/nWLCt7


Examples of the “mistakes” below…

Read on.

Biloxi Buzz for Thursday

Clinton On Surprise Visit To Kabul

Social Security Benefits Increasing For First Time Since 2009

WATCH: Jay-Z And Warren Buffett School Kids On Financial Literacy

Department Of Justice Still Wants New York Times Reporter'€™s Sources

Occupy Wall Street Represents New Hope for Washington Reformers

GAO Finds Serious Conflicts at the Fed

WASHINGTON, Oct. 19 – A new audit of the Federal Reserve released today detailed widespread conflicts of interest involving directors of its regional banks.


“The most powerful entity in the United States is riddled with conflicts of interest,” Sen. Bernie Sanders (I-Vt.) said after reviewing the Government Accountability Office report. The study required by a Sanders Amendment to last year’s Wall Street reform law examined Fed practices never before subjected to such independent, expert scrutiny.

The GAO detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves. “Clearly it is unacceptable for so few people to wield so much unchecked power,” Sanders said. “Not only do they run the banks, they run the institutions that regulate the banks.”

Sanders said he will work with leading economists to develop legislation to restructure the Fed and bar the banking industry from picking Fed directors. “This is exactly the kind of outrageous behavior by the big banks and Wall Street that is infuriating so many Americans,” Sanders said.

The corporate affiliations of Fed directors from such banking and industry giants as General Electric, JP Morgan Chase, and Lehman Brothers pose “reputational risks” to the Federal Reserve System, the report said. Giving the banking industry the power to both elect and serve as Fed directors creates “an appearance of a conflict of interest,” the report added.

The 108-page report found that at least 18 specific current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.

In the dry and understated language of auditors, the report noted that there are no restrictions in Fed rules on directors communicating concerns about their respective banks to the staff of the Federal Reserve. It also said many directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve. The rules, which the Fed has kept secret, let directors tied to banks participate in decisions involving how much interest to charge financial institutions and how much credit to provide healthy banks and institutions in “hazardous” condition. Even when situations arise that run afoul of Fed’s conflict rules and waivers are granted, the GAO said the waivers are kept hidden from the public.

The report by the non-partisan research arm of Congress did not name but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest, including:

• • Stephen Friedman In 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap Fed loans. During the same period, Friedman, chairman of the New York Fed, sat on the Goldman Sachs board of directors and owned Goldman stock, something the Fed’s rules prohibited. He received a waiver in late 2008 that was not made public. After Friedman received the waiver, he continued to purchase stock in Goldman from November 2008 through January of 2009 unbeknownst to the Fed, according to the GAO.

• • Jeffrey Immelt The Federal Reserve Bank of New York consulted with General Electric on the creation of the Commercial Paper Funding Facility. The Fed later provided $16 billion in financing for GE under the emergency lending program while Immelt, GE’s CEO, served as a director on the board of the Federal Reserve Bank of New York.

• • Jamie Dimon The CEO of JP Morgan Chase served on the board of the Federal Reserve Bank of New York at the same time that his bank received emergency loans from the Fed and was used by the Fed as a clearing bank for the Fed’s emergency lending programs. In 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquire Bear Stearns. At the time, Dimon persuaded the Fed to provide JP Morgan Chase with an 18-month exemption from risk-based leverage and capital requirements. He also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank.

$725,000 Judgment Against Wells Fargo for Misapplying $2,212 Mortgage Payment

Below is a story of an attorney that has been battling the banks on behalf of many Northern Nevada homeowners for several years. His first experience with the banksters’ egregious conduct towards borrowers began in September 2004 and resulted in a $725K judgment against Wells Fargo Bank. The judgment was entered in April 2009 and is currently being appealed for the second time.


After almost 3 years of litigation, an internal electronic office memorandum dated on or about May 2005 contained an admission from Wells Fargo that it had mistakenly applied the mortgage payment to the wrong account and that it should correct its error. However, Wells Fargo refused to correct its admitted error and has began a campaign trying to wear down and outlast his client. A campaign that began in September 2004 when it first misapplied his client’s mortgage payment (”$2200″). The action was filed in the federal district Court of Northern Nevada in May 2005 and was finally agreed to submit the matter to binding arbitration in January 2009.

An arbitration award was issued in February 2009 and I moved for an award of attorney’s fees and costs in the amount of about $500,000. In Wells Fargo’s opposition to the fee application, it admitted that “plaintiff’s fees and costs pale in comparison to the fees it paid.” Regardless the arbitrator award all of my client’s fees and costs. Wells Fargo then moved to have the arb award vacated pursuant to the Federal Arbitration Act in the district court. The district court refused to rule on its motion because the parties’ stipulation to proceed to binding arbitration was with the understanding that the losing party would appeal the award directly to the 9th Circuit.

In August 2009, Wells Fargo appealed the arbitration award. In February, 2011, the 9th Circuit remanded the motion back to the district court with instructions to rule on the motion. On August 17, 2011, the district court issued its memorandum of decision and order denying Wells Fargo’s motion. And, despite the standard for vacating an arbitration award being next to impossible to meet, Wells Fargo filed another appeal to the 9th Circuit on or about September 10, 2011.

The following is a summary of the attached award and findings of fact by the arbitrator, retired California Appellate Court Justice Michael Nott.

This dispute arose out of Wells Fargo inadvertently applying Johnson’s $2,212.00 September 2004 mortgage payment to the wrong mortgage account. Despite Wells Fargo having discovered and admitting its mistake on or about May 2005, Wells Fargo refuses to this very day, October 11, 2011 (over 7 years later), to remedy its admitted wrong doing and continues to employ 2 expensive law firms to employ expensive delaying tactics to postpone the inevitable payment of the arbitration award.

Retired California Appellate Court Justice Michael Nott after 3 1/2 days of trial and reviewing all the evidence and testimony presented by the Parties concluded that despite Wells Fargo having eventually admitted that it had been wrong all along, Wells Fargo refused to correct its error. In an overview of all the evidence presented, he concluded that this matter should have never taken so long to resolve. It just wasn’t complicated and, more poignantly, the evidence is overwhelming that Johnson provided sufficient documentary proof to back his assertion from Day 1 that all appropriate payments had been made to Loans 55 and 56. Id. In his final analysis, Justice Nott concluded that there wasn’t any reason to rush to reporting any negative comments to the CRAs (after the first report) until the problem was finally resolved. Justice Nott noted that Wells Fargo was servicing 8 of Johnson’s other mortgage loans and did not have to report any of them delinquent.

Justice Nott’s ultimate conclusion was that on the face of the documents presented at trial by Johnson, the investigation by Wells Fargo was inadequate, unreasonable, and untimely under the rules of the FCRA. Further, the yoyo reporting and clearing of late payments from October through May, and the continued foreclosure proceedings on Loan 56 were unnecessary and improper.

Johnson was awarded $260,910 including the attorney’s fees and costs he incurred from September 2004 through the end of the arbitration on or about February 2009. Almost 4 1/2 years of litigation that included, but not limited to, trips to California, North Carolina, and Iowa. Attorney fees awarded were $427,739, and cost in the amount of $37,069.

The attorney on the case is:

Tory M. Pankopf

TORY M. PANKOPF, LTD.

A Foreclosure Defense Law Firm

10471 Double R Blvd., Suite C

Reno, Nevada 89521

Tel. (775) 384-6956

Fax (775) 384-6958

~

Below are copies of the: 1) arb award; 2) amended arb award; 3) order confirming award and judgment; 4) 9th Circuit Opinion; and 5) memorandum of decision and order denying.

Read on.

Lawyer who fought foreclosure fraud takes Federal plea in straw-buyer money-laundering conspiracy

Source: ABA Journal

A Florida title attorney who is playing a prominent role in the fight against mortgage foreclosure fraud by lenders has taken a plea in a federal case over an alleged mortgage fraud conspiracy.

Carol Asbury, 59, could get as much as 20 years in prison and a $250,000 fine when she is sentenced next month, the Palm Beach Post reported.

The alleged scheme involved payments to straw buyers to pretend they were purchasing high-priced homes in Wellington. Using fraudulent loan documents, participants obtained loans for more than the purchase price and pocketed the difference, according to prosecutors.

Read the full story >>

Del. AG discusses his fight to investigate the banks, MERS on The Dylan Ratigan Show

Visit msnbc.com for breaking news, world news, and news about the economy

Fannie, Freddie to phase out foreclosure attorney networks

The Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to phase out their current foreclosure attorney networks and to develop new criteria, allowing mortgage servicers to choose their own lawyers in the future.

Currently, the government-sponsored enterprises designate specific law firms eligible to do foreclosure work for servicers. The FHFA said Tuesday the unwinding of these networks coincides with the alignment of the GSE servicing guidelines that took effect Sept. 1 and the regulatory consent orders signed with the largest servicers earlier in the year.

Read on.

Biloxi Buzz for Wednesday

Record Number Of Immigrants Deported In 2011

SHOCK VIDEO: Cain Blames The Unemployed, Audience Cheers

Del. AG Biden: AG’s job is to make sure there is “criminal” “accountability”

Visit msnbc.com for breaking news, world news, and news about the economy

Buyer can’t sue after bad foreclosure sale, court rules

A Massachusetts man who bought a home in a faulty foreclosure sale didn’t have the right to bring a court case over the property because he isn’t the owner, the state’s high court ruled.

The Supreme Judicial Court, which in January found that banks can’t foreclose on a house if they don’t own the mortgage, went one step further in a closely watched case and said a sale after that foreclosure doesn’t transfer the property. Therefore, the buyer couldn’t bring his court action against a previous owner, the court ruled.

Read the full story >>

Abuses Alleged In Retooled Loans Done By BofA

Despite deals, threats of foreclosure reported

Jenifer B.McKim, Boston Globe

Property owners in Massachusetts and across the United States say they are being threatened with foreclosure and assessed unfair fees by lenders even after signing agreements with those companies to make lower mortgage payments and stay in their homes.

Eight Bank of America borrowers – including two from Massachusetts – have filed a lawsuit against the nation’s largest bank, alleging it violated loan modification contracts, wrongly attempted to collect money from them, damaged their credit, and initiated wrongful foreclosure actions. They expect others to join the suit and are seeking class-action status.

Borrowers and housing advocates say the problem is a further indication of the mortgage industry’s ongoing woes.

Bank of America declined to comment.

Loan problems typically occur when one department at a lending company approves a modification – permanently lowering a homeowner’s mortgage obligation through interest rate or principal reductions – but does not accurately update the borrower’s records, housing advocates say. As a result, other departments may continue to classify the customer’s account as delinquent.

The frequency of such errors is a matter of some disagreement. Faith Schwartz, executive director of the nonprofit Hope Now Alliance, which represents businesses and housing counselors in the mortgage industry, said she was not aware of any serious issues with completed loan modifications.

“That is not something that has come up often,’’ Schwartz said.

But Kathleen Day, spokeswoman for the nonprofit Center for Responsible Lending, based in North Carolina, said the problem is widespread.

Read more here

NH Supreme Court hears mortgage dispute

In his last administrative act as banking commissioner, on June 4, 2010, Peter Hildreth ruled that Countrywide Home Loans violated the state’s consumer protection law when it switched the terms of a Manchester woman’s mortgage just days before her closing.

He ordered the mortgage giant, which was purchased by Bank of America in 2008, to void the mortgage note, repay the woman’s money and pay her closing costs and legal fees. Countrywide appealed, and last week the case landed in the state Supreme Court.

The case goes to the heart of New Hampshire’s version of the Consumer Protection Act. The Legislature has established that four regulated industries — banking, insurance, securities and public utilities — are exempt from the CPA; instead, it’s the commissioners of those departments who enforce the law against unfair and deceptive trade practices.

Among the issues the high court must decide is whether the homeowner filed her original complaint and request for a rehearing within the legal time limits, and whether Hildreth acted properly in the kind of restitution he ordered.

The case dates back to 2005, when Rachel Nicholson applied for a mortgage to buy a condex in Manchester. She received pre-approval from Countrywide and signed a lock-in agreement for a fixed-rate, 30-year loan at 6 percent interest.

Read more here

Who can save the persecuted bankers? (Comic)

State AGs and federal officials float new mortgage plan: Underwater borrowers current on payments would get help

State and federal officials are pushing a plan that could help some "underwater" borrowers get refinancing assistance in the latest government bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market.

The proposal was raised in a meeting last week between government negotiators and giant lenders as part of an effort to settle allegations of questionable foreclosure practices. Discussions are still fluid and any final outcome is uncertain. Talks between government officials and the banks are expected to continue this week.

The plan under consideration would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments, according to people familiar with the matter. Such borrowers typically aren't able to refinance because they lack equity in their homes. The plan would apply only to mortgages owned by the banks. It isn't clear how many of those borrowers would qualify for help. Around 20% of all U.S. mortgages are owned by U.S.-chartered commercial banks; the majority are held by investors in mortgage-backed securities.

Read on.

FL AG is going after fraud, but not what you are thinking

TALLAHASSEE -- Despite Florida’s struggles with Medicare fraud, foreclosure “robo-signing” and prescription drug “pill mills,” the attorney general’s top legislative priority is to clean up timeshare resale fraud.

Attorney General Pam Bondi says timeshare resale fraud is by far the top consumer complaint her office has received in the past two years. With more than 19,000 complaints since 2009, timeshare resales fraud outnumbers the next four categories combined. To tackle the growing problem, Bondi teamed up this month with two Republican lawmakers to sponsor the Timeshare Resale Accountability Act.

Read on.

Foreclosure ruling irks banks

WEST PALM BEACH — An appeals court ruling in favor of Wellington homeowners in foreclosure is causing "calamitous confusion," according to bank attorneys who say it could snarl hundreds of thousands of pending foreclosure cases.

The bank is asking for a rehearing and clarification of the Sept. 7 decision by the 4th District Court of Appeal, which said a foreclosure affidavit submitted by a bank employee was hearsay because the person relied on computerized information and did not have personal knowledge of the case.

The lack of personal knowledge of foreclosure documents is the foundation of the robo-signing controversy that continues to delay foreclosure proceedings.

The bank is not challenging the court's decision in Gary and Anita Glarum vs. LaSalle Bank, but it said the ruling has been misinterpreted to mean that the person relying on computerized records must be the one who actually entered them into the computer or the direct custodian of the records.

Considering how often home loans changed hands during the real estate boom and subsequent collapse, finding people who personally input mortgage data could be impossible. Read on.

Biloxi Buzz for Tuesday

• Wells Fargo posts $4.1 billion profit, mortgage banking income rises

Citi profits up 74% from last year

Bachus proposes raising GSE fees, slashing foreclosure programs

 

Federal Government's Role In Grading Teachers At Center Of Legislative Fight

WATCH: Former Carter Aide Calls For List Of Wealthy People Who Hide Their Money

Buffett Would Pay No Income Tax Under '999'?

Immigrants To Wells Fargo: Stop Investing In For-Profit Detention

Banks fall after Wells Fargo, Citigroup say revenue slumped

Letter RE MERS and Banks from Kelley Monahan Registrar of Deeds Grafton County New Hampshire to County Papers, Bar Assoc., Real Estate, etc

Kelley Monahan Register of Deeds Grafton County New Hampshire Letter RE Mers and Banks

Senator Tester wants DOJ to investigate big banks for fraud, illegal fees on veterans’ mortgages

Tester’s letter to Attorney General Holder:

Dear Attorney General Holder:

I write regarding the lawsuit recently unsealed in federal court which reveals that as many as 13 banks and mortgage firms imposed excessive, hidden and illegal fees on a number of our nation’s veterans and their families. Because these home loans were backed by the federal government, they were low-risk and led to additional profits for the banks. I am bothered by the fact that the Justice Department reportedly will not be taking on the case at this time. I request that you provide justification for this decision, and urge you to reconsider. I also request that you investigate the full extent of these illegal activities, and provide my office with detailed information about the subsequent damages as well as the actions the Justice Department will undertake to prevent them from happening in the future.

According to the lawsuit, these veterans were fraudulently charged millions in illegal fees through a Department of Veterans Affairs (VA) loan program through which they sought to lower their interest rates or shorten the terms of their mortgages. More than 1.2 million of these loans have been issued over the past 10 years, and as much as 90 percent may involve some degree of fraud.

In defrauding these veterans and their families with excess fees, the banks allegedly also benefitted by receiving hundreds of millions of dollars in loan guarantees from the VA. That resulted in better prices from the loans that banks and mortgage brokers sold to investors. And as more of these loans went into default or foreclosure, it was ultimately American taxpayers who were on the line.

If true, this type of behavior is illegal and it’s un-American. There is no question about that. Despite what some of our nation’s largest banks may believe, the men and women who have honorably served our country deserve better than this. They have earned as much. Nevertheless, this lawsuit comes on the heels of multiple settlements that have been reached in legal actions against banks that have illegally seized homes, overcharged and defrauded members of the U.S. military. This is an alarming trend that cannot stand. And it must not continue.

The men and women who are serving or have served in uniform should never have to struggle to receive the protections due to them and their families under law. At the same time, we owe it to hard-working taxpayers in Montana and across the country to recover any federal funds that have been lost through the illegal actions of unscrupulous actors.

As the Department of Justice begins taking more aggressive steps to address this matter, I urge you to work with Congress in a close and productive manner.

I look forward to your response.

Sincerely,

(s)

Jon Tester

Source: Senator Tester facebook

Biloxi Buzz for Monday

Obama Delivers MLK Memorial Speech: 'I Know We Will Overcome'

Herman Cain's Campaign Has Close Ties To Koch Brothers

U.S. Attorney Says Decision To Crack Down On Medical Marijuana Made In California, Not Washington

TRAGEDY IN VEGAS: RACING STAR DIES IN MASSIVE CRASH

Obama Delivers MLK Memorial Speech: 'I Know We Will Overcome'

Herman Cain's Campaign Has Close Ties To Koch Brothers

IRS Auditing How Google Shifted Profits

The U.S. Internal Revenue Service is auditing how Google Inc. (GOOG) avoided federal income taxes by shifting profit into offshore subsidiaries, according to a person with knowledge of the matter.

The agency is bringing more than typical scrutiny to how the company valued software rights and other intellectual property it licensed abroad, said the person, who requested anonymity because the audit isn’t public. The IRS has requested information from Google about its offshore deals after three acquisitions, including its $1.65 billion purchase of YouTube, the person said. The transfer overseas of these kinds of rights has enabled Google to attribute earnings to foreign units that pay lower taxes, Bloomberg News reported a year ago.

While Google’s potential liability isn’t clear, similar deals between companies and offshore arms are often the subject of disputes over hundreds of millions of dollars in taxes, said Daniel Frisch, an economist at Horst Frisch Inc. which advises businesses on transfer pricing -- the allocation of income between units in different countries. In 2006, the IRS settled a case with drugmaker GlaxoSmithKline Plc (GSK) for $3.4 billion.

“The very biggest transfer-pricing tax disputes are over transfers of intangibles to offshore subsidiaries,” said Frisch, whose firm is based in Washington.

Read on.

Title Escrow Accountant Pleads Guilty In $1.7M Fraud Scheme

Brenda Lukenich, age 60, of Hughesville, Maryland pleaded guilty today to mail fraud arising from a scheme to defraud lenders and a title insurance company of $1.7 million. Two co-defendants are scheduled for trial on November 7, 2011.

The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.

According to her plea agreement, Lukenich was the escrow accountant for title companies that did business in the Baltimore, Annapolis and Washington, D.C. metropolitan areas, including Troese Title Services, Inc. (Troese Title), located in Camp Springs, Maryland; Troese/Hughes Title Services, Inc. (Troese/Hughes), located in Greenbelt, Maryland; and Troese/Prestige Title Services, Inc. (Troese/Prestige), located in Ellicott City, Maryland. As the escrow accountant, Lukenich reconciled the escrow accounts and prepared monthly reconciliation reports for each escrow account.

Prior to 2005, Troese Title and Troese/Hughes shared a joint escrow account for the receipt and disbursement of funds in connection with real estate closings carried out by both title companies. By 2006, the joint escrow account had a $3 million shortage. Lukenich’s reconciliation reports, which were sent monthly to the principal of the companies, clearly showed that there were significant shortages in the joint escrow account. Principals of the title companies re-financed their homes to attempt to cover some of the escrow shortages. Sometime in 2006, the joint escrow account was separated into separate escrow accounts and Lukenich allocated a $1.7 million escrow shortage to Troese Title and a $1.3 million escrow shortage to Troese/Hughes.

The Troese title companies had agency agreements with Chicago Title Company which enabled them to provide title insurance in conjunction with the settlement services they performed, and made Chicago Title liable for any title defects suffered by home owners and lenders. Chicago Title performed audits at Troese Title and Troes/Hughes. Prior to each of the audits, Lukenich would alter the reconciliation reports to falsely show that there were not escrow shortages and that there were not outstanding mortgage payoffs that had not been made. After each audit, Lukenich would reverse the fraudulent adjustments.

In March 2008, Chicago Title terminated its agency relationship with Troese Title and Troese/Hughes. In response, Troese Title and Troese/Hughes operations were consolidated into a single title operation that would be part of Troese/Prestige. However, when Troese/Prestige conducted settlements, it used the new lender money to cover the mortgage pay-offs that were still outstanding at Troese Title and Troese/Prestige, instead of as instructed on the HUD-1 settlement statement, in violation of the express direction of the lender. Eventually, there were not enough settlements to cover all of the shortages. Chicago Title received information that a mortgage had not been paid off and conducted a surprise audit of Troese/Prestige. The escrow account did not contain enough money to cover all of the outstanding mortgage pay-offs from Troese/Prestige. Chicago Title, as the title insurer, was forced to make the mortgage pay-offs, and to pay off funds due to a seller from a settlement and pay to record the instruments that had not been recorded. In total, the loss to Chicago Title stemming from the Troese/Prestige pay-offs was approximately $1.7 million.

Lukenich faces a maximum sentence of 20 years in prison and a $250,000 fine. U.S. District Judge William N. Nickerson scheduled sentencing for January 12, 2012 at 9:30 a.m.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage-Fraud/index.html.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein commended the FBI for its investigative work, and thanked Assistant U.S. Attorneys Tonya Kelly Kowitz and Gregory R. Bockin, who are prosecuting the case.

Source: MFI-Miami

Bank of America branch manager in CA: You cannot be a protester and a customer at the same time to close account

And here is the response from Bank of America. Click here.

Here is the video of the incident:

Cartoon for Sunday; Open thread

Treasury Response to ProPublica Questions about HAMP Audits

Check out question number 11:

11) In early June of this year, Treasury announced that it would be withholding servicer
incentives for four servicers. It recently announced that it would continue to withhold incentives for two servicers, namely Bank of America and Chase. However, according to the transaction reports posted on financialstability.gov, Treasury has continued to pay incentives to these two servicers. Since the end of May, Bank of America subsidiaries have received $2.5 million in servicer incentives. During that same time, Chase subsidiaries have received $404,000. Please explain.

To clarify, in June 2011 Treasury reported it would withhold servicer incentives from three servicers: Bank of America, JPMorgan Chase, and Wells Fargo. The Wells Fargo incentives were subsequently released in September 2011. Servicer incentives for HAMP and HAFA were withheld. Regrettably, current system limitations currently prevent the systematic withholding of incentives on the second lien program, 2MP, without also withholding the investor incentives for 2MP. We are currently working with our program administrator to modify our systems to withhold just the 2MP servicer incentives in the future. Due to the relatively de minimus amounts of the 2MP servicer incentives in relation to the HAMP and HAFA servicer incentives, we made the decision to continue to pay all 2MP incentives for the time being, rather than stop paying all 2MP incentives (including the investor incentives) and possibly risk investors stopping 2MP modifications, which would have an adverse impact on homeowners who can benefit under the program. Homeowner and investor incentives are still paid, and flow through the servicer to be paid out.

Up to 25 people get arrested trying to close their personal Citibank bank account

Check out this from protest event yesterday..

In what can only be the stupidest public relations move in corporate history, financial behemoth Citibank reacted to customers trying to close their accounts today by… bringing in a ton of cops and having them arrested

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Here’s how it went down at the Citibank branch at 555 La Guardia Place in New York. What you can’t see on the video below: The demonstrators (all Citibank customers) were asked to leave, and when they tried to comply Citibank’s security locked them in and wouldn’t let them leave!

Twenty-three were arrested, including the woman at the end in the nice-looking business suit. (I think it’s really cool that the Occupiers have developed hand signals to exchange critical information during emergencies..):

Source: Red Green & Blue (http://s.tt/13wg2)

Citigroup Inc. : The following is a statement from Citibank in response to an incident at the La Guardia Place branch yesterday. Click here.

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HSBC targets first-time buyers with fee-free mortgage with 90% LTV

First-time buyers are being targeted with a new range of mortgages from HSBC, which is making £350m of lending available to borrowers with small deposits.

The bank has launched a range of fee-free mortgages with a maximum loan-to-value (LTV) of 90%, including a market-leading lifetime tracker. The bank is reserving £250m of its lending for first-time buyers until the end of the year.

The mortgages include a two-year fixed-rate loan at 4.49%, a five-year fix at 4.89%, and the lifetime tracker, which tracks at 4.09% above bank base rate. For those with a 15% deposit there is a two-year fix at 4.29%, a five-year fix at 4.69% and a lifetime tracker at 3.49% above base.

For borrowers with a 10% deposit there are deals with lower rates out there, but all come with fees. Chelsea building society has a 4.09% rate fixed for two years with a £1,495 fee, while its parent company, Yorkshire building society, has a 4.19% loan over two years with a £995 fee. Both are available only through branches.

http://www.guardian.co.uk/money/2011/oct/14/hsbc-first-time-buyers-mortgage