Reiterates Need for Servicing Standards, Raises Concerns about Settlement Figure & OCC Protecting Banks Over Borrowers
Congresswoman Maxine Waters (D-Calif.), a senior member of the Financial Services Committee, issued the following statement today after reports of a deal between the Obama Administration and mortgage servicers to settle systemic fraud issues in the servicing and foreclosure industry:
Reporting from yesterday and today indicates that federal regulators are close to reaching a settlement over what they describe as “shortcomings in foreclosure governance and document preparation processes,” or what I have plainly referred to as “foreclosure fraud.” The settlement, as described by the Wall Street Journal, Huffington Post, and other media outlets, leaves me deeply concerned about whether homeowners will receive the due process and fair treatment they deserve.
Particularly, I am concerned about the $20 billion settlement figure, spread across 14 servicers, that has been noted in various reports. Though this figure sounds like a large settlement to those unfamiliar with the scale of the foreclosure crisis, we must remember that over 3 million homes have been lost to foreclosure since 2006, and some analysts expect an additional 11 million foreclosure filings in the near future. Moreover, the Center for Responsible Lending estimates that foreclosures between 2009 and 2012 will result in $1.86 trillion in lost wealth for families.
We must also contrast this $20 billion settlement figure, shared by 14 servicers, with the $8.6 billion settlement paid by Countrywide Finance Corp. in 2008 as a result of origination fraud. I have every reason to believe that today’s improper servicing is likely just as pervasive as origination fraud a few years ago.
This settlement is too small, and will likely have one of two results: either borrowers will receive insignificant principal reductions, or reductions will only be available to a small subset of troubled borrowers.
I am also concerned about the fact that this settlement, as reported, contains no discussion of mortgage servicing standards going forward. Though I was pleased that the Administration briefly mentioned the need for servicing changes in their Fannie Mae and Freddie Mac reform proposal, we have yet to see the details of their plan for servicing reform. As I have reiterated for years, meaningful servicing standards are absolutely necessary to protect the millions of borrowers vulnerable to foreclosure. My bill from the last Congress, The Foreclosure Prevention and Sound Mortgage Servicing Act of 2009 (H.R. 3451), which I plan to reintroduce, contained borrower protections that I believe could have prevented many of the servicing failures we see today. I urge regulators to insist on meaningful borrower protections that satisfy all of the servicing reforms described below:
• Provide that servicers have a duty to engage in reasonable loss mitigation activities, as outlined in H.R. 3451;
• Adopt servicer compensation structures that result in servicers having an interest as to whether the loan remains current, and separates simple transaction processing from actual loss mitigation activities;
• Require that a formula govern how second lien holders are required to modify second liens in the event of a first lien modification;
• Mandate that servicers establish a single-point-of-contact for each borrower seeking a loan modification, and provide that single-point-of-contact with actual decision making authority;
• Require that an independent master servicer provide oversight and resolve disputes regarding servicers’ actions;
• End the foreclosure “dual track,” which often results in borrowers being foreclosed upon by one division of a servicer while they are simultaneously attempting to negotiate a loan modification with another division of the servicer;
• Require servicers to foreclose in their own names;
• Change payment structures for law firms and other servicer contractors so that compensation is not tied to the speed at which these contractors foreclose; and
• Require servicers to disclose the complete chain of title as well as a full accounting of all fees (both upon request and in the Notice of Default), and the use of lost note affidavits in their foreclosures.
In addition to these borrower protections and servicing industry reforms, I continue to believe that it is essential for Congress to provide bankruptcy judges with the authority to alter mortgage debt on primary residences, an ability that judges already have on vacation homes. I also believe that the Treasury Department should pursue monetary penalties for servicers’ failure to comply with Home Affordable Modification Program (HAMP) guidelines. These monetary penalties could be redirected for any number of purposes, including increasing legal services funding so that homeowners can be adequately represented by counsel in foreclosure. Finally, if the interagency report on foreclosure fraud does not already address this issue, I would urge regulators to conduct a robust investigation into whether parties involved in mortgage securitization may have failed to follow rules regarding the creation of Real Estate Mortgage Investment Conduits (REMICs), and are therefore in violation of tax rules.
More generally, I remain concerned that our regulators didn’t learn the lessons outlined in the Financial Crisis Inquiry Commission report, which starkly laid out how a failure to protect borrowers led to an explosion in exploitive subprime mortgage products. All the evidence we have points to the fact that history is likely repeating itself. In fact, in a November hearing of my Subcommittee, regulators made it clear that they learned of foreclosure fraud via newspaper reports, despite having teams of examiners located within the operations of major servicers.
For this reason, I was very skeptical from the outset that this investigation would yield substantive results, given that it was led by the Office of the Comptroller of the Currency (OCC). As the subprime crisis has taught us, a regulator charged with protecting banks’ safety and soundness cannot also be charged with protecting the due process rights of borrowers.
Through yesterday and today’s reporting, we learned that the OCC’s position is that only a “small number” of borrowers were improperly foreclosed upon. I am doubtful of this claim, given what I’ve learned about servicer-driven defaults in the years since this crisis began. For instance, National Consumer Law Center attorney Diane Thompson has noted in testimony that around 50 percent of the borrowers she represents in foreclosure cases were subject to a servicer-driven default. Academic work from experts like Kurt Eggert at Chapman University School of Law provides additional support for claims of servicer misbehavior. And just recently, JPMorgan Chase admitted to wrongfully foreclosing on 14 active duty military personnel and overcharging another 4,000 military borrowers on their mortgages, in contravention of the Servicemembers Civil Relief Act.
To date, all we have are these anecdotal reports. But through both Congressional hearings, and first-hand experience with servicers, I believe that there is substantial evidence indicating that improper fees, wrongful application of borrower payments, the use of unscrupulous foreclosure mills and other practices evidence the fact that improper foreclosures are widespread.
I eagerly await the full results of the interagency foreclosure fraud investigation. In the meantime, I will continue to advocate for servicing reforms. I believe that these fundamental changes to mortgage servicing are needed not only for borrowers, but to ensure a fully-functioning mortgage market that protects investors and encourages the return of private capital moving forward.
Saturday, February 26, 2011
Friday, February 25, 2011
SEC Charges Former Treasurer of Major Mortgage Lender for Role in Securities Fraud and TARP Scheme
FOR IMMEDIATE RELEASE
2011-49
Washington, D.C., Feb. 24, 2011 — The Securities and Exchange Commission today charged the former treasurer of the one-time largest non-depository mortgage lender in the country with aiding and abetting a $1.5 billion securities fraud scheme and an attempt to scam the U.S. Treasury’s Troubled Asset Relief Program (TARP).
The SEC alleges that Desiree E. Brown, the former treasurer of Taylor, Bean & Whitaker Mortgage Corp. (TBW), helped enable the sale of more than $1.5 billion in fictitious and impaired mortgage loans and securities from TBW to Colonial Bank, and caused them to be falsely reported to the investing public as high-quality, liquid assets. Brown also helped cause Colonial Bank to misrepresent that it had satisfied a prerequisite necessary to qualify for TARP funds.
The SEC previously charged former TBW chairman and majority owner Lee B. Farkas in June 2010. Farkas also was arrested in June by criminal authorities. In a related action today, Brown pleaded guilty to criminal charges filed by the Department of Justice in the Eastern District of Virginia.
“Brown willingly participated with Farkas in a $1.5 billion fraud on Colonial Bank and its investors,” said Lorin L. Reisner, Deputy Director of the SEC’s Division of Enforcement. “Brown also aided efforts by Farkas to mislead Colonial Bank and its regulators regarding the bank’s application for TARP funds.”
According to the SEC’s complaint filed in U.S. District Court for the Eastern District of Virginia, Brown and Farkas perpetrated the fraudulent scheme from March 2002 to August 2009, when Colonial Bank was seized by regulators and Colonial BancGroup and TBW both filed for bankruptcy. TBW was the largest customer of Colonial Bank’s Mortgage Warehouse Lending Division (MWLD). Because TBW generally did not have sufficient capital to internally fund the mortgage loans it originated, it relied on financing arrangements primarily through Colonial Bank’s MWLD to fund such mortgage loans.
The SEC alleges that when TBW began to experience liquidity problems and overdrew its then-limited warehouse line of credit with Colonial Bank by approximately $15 million each day, Brown and Farkas and an officer of Colonial Bank concealed the overdraws through a pattern of “kiting” in which certain debits were not entered until after credits due for the following day were entered. In order to conceal this initial fraudulent conduct, Brown, Farkas and the Colonial Bank officer created and submitted fictitious loan information to Colonial Bank and created fictitious mortgage-backed securities assembled from the fraudulent loans. By the end of 2007, the scheme consisted of approximately $500 million in fake residential mortgage loans and approximately $1 billion in severely impaired residential mortgage loans and securities. These fictitious and impaired loans were misrepresented as high-quality assets on Colonial BancGroup’s financial statements.
The SEC alleges that in addition to causing Colonial BancGroup to misrepresent its assets, Brown assisted Farkas in causing BancGroup to misstate publicly that it had obtained commitments for a $300 million capital infusion that would qualify Colonial Bank for TARP funding. In fact, Farkas and Brown never secured financing or sufficient investors to fund the capital infusion. When BancGroup issued a press release announcing it had obtained preliminary approval to receive $550 million in TARP funds, its stock price jumped 54 percent – its largest one-day price increase since 1983. When BancGroup and TBW later mutually announced the termination of their stock purchase agreement and signaled the end of Colonial Bank’s pursuit of TARP funds, BancGroup’s stock declined 20 percent.
The SEC’s complaint charges Brown with violations of the antifraud, reporting, books and records and internal controls provisions of the federal securities laws. Without admitting or denying the SEC’s allegations, Brown consented to the entry of a judgment permanently enjoining her from violation of Rule 13b2-1 of the Securities Exchange Act of 1934 and from aiding and abetting violations of Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. The proposed preliminary settlement, under which the SEC’s requests for financial penalties against Brown would remain pending, is subject to court approval.
The SEC’s case was investigated by M. Graham Loomis, Aaron W. Lipson, Yolanda L. Ross and Barry R. Lakas of the Atlanta Regional Office. The SEC acknowledges the assistance of the Fraud Section of the U.S. Department of Justice’s Criminal Division, the Federal Bureau of Investigation, the Office of the Special Inspector General for the TARP, the Federal Deposit Insurance Corporation’s Office of the Inspector General, the Office of the Inspector General for the U.S. Department of Housing and Urban Development, and the U.S. Attorney’s Office for the Eastern District of Virginia, Civil Division. The SEC brought its enforcement action in coordination with these other members of the Financial Fraud Enforcement Task Force.
The SEC’s investigation is continuing.
# # #
SOURCE: Securities and Exchange Commission
2011-49
Washington, D.C., Feb. 24, 2011 — The Securities and Exchange Commission today charged the former treasurer of the one-time largest non-depository mortgage lender in the country with aiding and abetting a $1.5 billion securities fraud scheme and an attempt to scam the U.S. Treasury’s Troubled Asset Relief Program (TARP).
The SEC alleges that Desiree E. Brown, the former treasurer of Taylor, Bean & Whitaker Mortgage Corp. (TBW), helped enable the sale of more than $1.5 billion in fictitious and impaired mortgage loans and securities from TBW to Colonial Bank, and caused them to be falsely reported to the investing public as high-quality, liquid assets. Brown also helped cause Colonial Bank to misrepresent that it had satisfied a prerequisite necessary to qualify for TARP funds.
The SEC previously charged former TBW chairman and majority owner Lee B. Farkas in June 2010. Farkas also was arrested in June by criminal authorities. In a related action today, Brown pleaded guilty to criminal charges filed by the Department of Justice in the Eastern District of Virginia.
“Brown willingly participated with Farkas in a $1.5 billion fraud on Colonial Bank and its investors,” said Lorin L. Reisner, Deputy Director of the SEC’s Division of Enforcement. “Brown also aided efforts by Farkas to mislead Colonial Bank and its regulators regarding the bank’s application for TARP funds.”
According to the SEC’s complaint filed in U.S. District Court for the Eastern District of Virginia, Brown and Farkas perpetrated the fraudulent scheme from March 2002 to August 2009, when Colonial Bank was seized by regulators and Colonial BancGroup and TBW both filed for bankruptcy. TBW was the largest customer of Colonial Bank’s Mortgage Warehouse Lending Division (MWLD). Because TBW generally did not have sufficient capital to internally fund the mortgage loans it originated, it relied on financing arrangements primarily through Colonial Bank’s MWLD to fund such mortgage loans.
The SEC alleges that when TBW began to experience liquidity problems and overdrew its then-limited warehouse line of credit with Colonial Bank by approximately $15 million each day, Brown and Farkas and an officer of Colonial Bank concealed the overdraws through a pattern of “kiting” in which certain debits were not entered until after credits due for the following day were entered. In order to conceal this initial fraudulent conduct, Brown, Farkas and the Colonial Bank officer created and submitted fictitious loan information to Colonial Bank and created fictitious mortgage-backed securities assembled from the fraudulent loans. By the end of 2007, the scheme consisted of approximately $500 million in fake residential mortgage loans and approximately $1 billion in severely impaired residential mortgage loans and securities. These fictitious and impaired loans were misrepresented as high-quality assets on Colonial BancGroup’s financial statements.
The SEC alleges that in addition to causing Colonial BancGroup to misrepresent its assets, Brown assisted Farkas in causing BancGroup to misstate publicly that it had obtained commitments for a $300 million capital infusion that would qualify Colonial Bank for TARP funding. In fact, Farkas and Brown never secured financing or sufficient investors to fund the capital infusion. When BancGroup issued a press release announcing it had obtained preliminary approval to receive $550 million in TARP funds, its stock price jumped 54 percent – its largest one-day price increase since 1983. When BancGroup and TBW later mutually announced the termination of their stock purchase agreement and signaled the end of Colonial Bank’s pursuit of TARP funds, BancGroup’s stock declined 20 percent.
The SEC’s complaint charges Brown with violations of the antifraud, reporting, books and records and internal controls provisions of the federal securities laws. Without admitting or denying the SEC’s allegations, Brown consented to the entry of a judgment permanently enjoining her from violation of Rule 13b2-1 of the Securities Exchange Act of 1934 and from aiding and abetting violations of Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. The proposed preliminary settlement, under which the SEC’s requests for financial penalties against Brown would remain pending, is subject to court approval.
The SEC’s case was investigated by M. Graham Loomis, Aaron W. Lipson, Yolanda L. Ross and Barry R. Lakas of the Atlanta Regional Office. The SEC acknowledges the assistance of the Fraud Section of the U.S. Department of Justice’s Criminal Division, the Federal Bureau of Investigation, the Office of the Special Inspector General for the TARP, the Federal Deposit Insurance Corporation’s Office of the Inspector General, the Office of the Inspector General for the U.S. Department of Housing and Urban Development, and the U.S. Attorney’s Office for the Eastern District of Virginia, Civil Division. The SEC brought its enforcement action in coordination with these other members of the Financial Fraud Enforcement Task Force.
The SEC’s investigation is continuing.
# # #
SOURCE: Securities and Exchange Commission
Biloxi Buzz for Friday
Fannie narrows 4Q loss, asks for more federal help
Ex-AG sees violations by Walker in stunt call — When Gov. Scott Walker discussed strategies to lay off state employees for political purposes, to coordinate supposedly “independent” political expenditures to aid legislators who support his budget repair bill, and to place agent provocateurs …
Ex-AG sees violations by Walker in stunt call — When Gov. Scott Walker discussed strategies to lay off state employees for political purposes, to coordinate supposedly “independent” political expenditures to aid legislators who support his budget repair bill, and to place agent provocateurs …
Fox News Chief, Roger Ailes, Urged Employee to Lie, Records Show — It was an incendiary allegation — and a mystery of great intrigue in the media world: After the publishing powerhouse Judith Regan was fired by HarperCollins in 2006, she claimed that a senior executive at its parent company …
Britain Seizing Gaddafi's Billions
Thursday, February 24, 2011
New Jersey State Supreme Court Judge threatens blanket moratorium on foreclosures
In reaction to the robo-signing foreclosure mess, Judge Stuart Rabner, the chief justice of the New Jersey State Supreme Court, announced that he intended to issue a blanket moratorium on foreclosures by all major lenders in the State of New Jersey unless they could come into court and show that they are definitively complying with state law when foreclosing upon New Jersey homeowners. Judge Rabner assigned the matter to Judge Mary Jacobson, who ordered representatives from six major banks (Bank of America, Wells Fargo, JP Morgan Chase, OneWest Bank, Citigroup, and Ally Financial) to testify to the court as to why the state should not suspend foreclosures.
Read on.
Read on.
Judge orders Quicken Loans to pay $2.7 million award to homeowner in West Virginia mortgage fraud case
A West Virginia judge has slapped online mortgage giant Quicken Loans Inc. with more than $2.7 million in punitive damages and legal costs after finding the lender had defrauded a borrower by misleading her about her loan and using an inflated property appraisal.
Ohio County (W.Va.) Circuit Judge Arthur Recht awarded the borrower just under $2.17 million in punitive damages. He also ordered that Quicken pay her attorneys nearly $600,000 in legal fees and costs. In a ruling last year, Recht had called Quicken’s conduct “unconscionable.”
James Bordas, one of the attorneys who represented the borrower, said he hoped the award would send a message to struggling homeowners that “big companies can’t just come in and cheat them.”
Ohio County (W.Va.) Circuit Judge Arthur Recht awarded the borrower just under $2.17 million in punitive damages. He also ordered that Quicken pay her attorneys nearly $600,000 in legal fees and costs. In a ruling last year, Recht had called Quicken’s conduct “unconscionable.”
James Bordas, one of the attorneys who represented the borrower, said he hoped the award would send a message to struggling homeowners that “big companies can’t just come in and cheat them.”
Continue reading here…
Dead woman's parents told to repay her Wells Fargo student loan
Many young adults complain that they will be trapped in student loan debt for the rest of their lives. It could be worse: yes, really, worse. A young woman in Kansas died of cancer shortly after graduating from college, and the lenders of her $45,000 in student loans decided to come after the balance from her estate: in her case, her parents. Because every grieving family needs to fight banks.
All of the woman's lenders quickly agreed that her parents were not legally obligated to pay her student loans, since she was an adult and her parents never co-signed. Except Wells Fargo, which insisted that her heirs owed the bank $6,000. The company mysteriously changed its mind when contacted by a local TV station about the family's situation.
Student loans generally die when the borrower does; if a family member or spouse co-signs or spouses consolidate their loans together, then the surviving person is responsible for the entire balance.
Source: KCTV5 Investigation: Heartbreaking Dilemma [KCTV]
All of the woman's lenders quickly agreed that her parents were not legally obligated to pay her student loans, since she was an adult and her parents never co-signed. Except Wells Fargo, which insisted that her heirs owed the bank $6,000. The company mysteriously changed its mind when contacted by a local TV station about the family's situation.
Student loans generally die when the borrower does; if a family member or spouse co-signs or spouses consolidate their loans together, then the surviving person is responsible for the entire balance.
Source: KCTV5 Investigation: Heartbreaking Dilemma [KCTV]
Biloxi Buzz for Thursday
An appellate judge in California last week upheld the rights of the Mortgage Electronic Registration Systems to the deed of trust, giving MERS the right to foreclose, according to court documents. San Diego County Judge Steven Denton late Friday upheld an...
Governor Walker's office confirms prank Koch call — The Internet is burning up with the news that Governor Scott Walker may have been pranked by a caller claiming to be David Koch, and a spokesman for the Governor, Cullen Werwie, emails a statement confirming the call is legit:
Statement of the Attorney General on Litigation Involving the Defense of Marriage Act — WASHINGTON - The Attorney General made the following statement today about the Department's course of action in two lawsuits
Madoff trustee's lawsuit: Citi saw red flags
Written by Biloxi
Irving Picard, Bernie Madoff trustee who is appointed to recover money for Madoff's clients has found another bank, other than JPMorgan Chase that turned a blind eye to Madoff's Ponzi scheme: Citigroup:
"Citi had access to and received information placing it on inquiry notice that Madoff's advisory business was potentially a fraud, and/or that Madoff was making hundreds of millions, if not billions, of dollars in avoidable transfers," said the complaint, filed December 8 in U.S. Bankruptcy Court in New York and made public on Monday.
In Mr. Picard's lawsuit against Citigroup, Mr. Picard alleged that Citigroup saw the red flags and had knowledge of possibility on Madoff's Ponzi scheme just like in Mr. Picard's lawsuit against JP Morgan Chase. Mr. Picard stated that Citigroup saw the red flags more than five years ago:
Picard's lawsuit said red flags should have been apparent to Citi as early as 2005. By September 2008, it said, Citigroup Global Markets Ltd (CGML) began making inquiries to other banks to take over its exposure to the Madoff firm. The other banks were not identified in the lawsuit.
It cited one email by a CGML trader that said: "We're needing to terminate our Madoff trade. Do you have appetite for that risk over there?"
The other bank responded, "don't think so, madoff is not very popular here either."
Mr. Picard's lawsuit against Citgroup seeks about $425 million. Citgroup denies any wrongdoing.
Irving Picard, Bernie Madoff trustee who is appointed to recover money for Madoff's clients has found another bank, other than JPMorgan Chase that turned a blind eye to Madoff's Ponzi scheme: Citigroup:
"Citi had access to and received information placing it on inquiry notice that Madoff's advisory business was potentially a fraud, and/or that Madoff was making hundreds of millions, if not billions, of dollars in avoidable transfers," said the complaint, filed December 8 in U.S. Bankruptcy Court in New York and made public on Monday.
In Mr. Picard's lawsuit against Citigroup, Mr. Picard alleged that Citigroup saw the red flags and had knowledge of possibility on Madoff's Ponzi scheme just like in Mr. Picard's lawsuit against JP Morgan Chase. Mr. Picard stated that Citigroup saw the red flags more than five years ago:
Picard's lawsuit said red flags should have been apparent to Citi as early as 2005. By September 2008, it said, Citigroup Global Markets Ltd (CGML) began making inquiries to other banks to take over its exposure to the Madoff firm. The other banks were not identified in the lawsuit.
It cited one email by a CGML trader that said: "We're needing to terminate our Madoff trade. Do you have appetite for that risk over there?"
The other bank responded, "don't think so, madoff is not very popular here either."
Mr. Picard's lawsuit against Citgroup seeks about $425 million. Citgroup denies any wrongdoing.
Cherokee tax chief quits to avoid foreclosing on more friends
Acid reflux gnawed at David Fields’ gut. Sleep came in fits. The waking hours were worse, as he battled depression with medications.
Inevitably, the antidepressants failed to temper the toll taken by a job he once loved and now feared would kill him: Cherokee County tax commissioner.
“My doctor told me, ‘If you don’t quit, you’re going to have a stroke or heart attack,’ ” Fields said Monday, explaining why, after 28 years, he resigned from his post with two years left on his term.
Fields, 62, became a poignant reminder of the housing bust’s impact on thousands of lives across metro Atlanta, where almost 100,000 properties were foreclosed on in 2010. Property owners are not the only ones hurt; so are people, such as Fields, at the end of a ruinous process set in motion by recession.
“I was foreclosing on the homes of people I have known my entire life,” Fields said Monday, two weeks after he walked away from his job but still carrying its burden. “I tried to do all I could to help them. But there’s only so much you can do. Your job is to collect taxes.”
Continue reading here…
Inevitably, the antidepressants failed to temper the toll taken by a job he once loved and now feared would kill him: Cherokee County tax commissioner.
“My doctor told me, ‘If you don’t quit, you’re going to have a stroke or heart attack,’ ” Fields said Monday, explaining why, after 28 years, he resigned from his post with two years left on his term.
Fields, 62, became a poignant reminder of the housing bust’s impact on thousands of lives across metro Atlanta, where almost 100,000 properties were foreclosed on in 2010. Property owners are not the only ones hurt; so are people, such as Fields, at the end of a ruinous process set in motion by recession.
“I was foreclosing on the homes of people I have known my entire life,” Fields said Monday, two weeks after he walked away from his job but still carrying its burden. “I tried to do all I could to help them. But there’s only so much you can do. Your job is to collect taxes.”
Continue reading here…
Alleged foreclosure mill internal instructions cheat sheet
Written by Biloxi
4closurefraud website received an interesting document from anonymous source that purports to be instructions for paralegals on as to how to create affidavits [from cut and paste] for filing so that the signatures could be mixed and matched at will for the court. Yes, it is hard to believe this but it is shocker that someone had the guts to pass this bombshell that is not surprising. In the anonymous source document provided by 4closurefraud website here is a sample of instructions for affidavits:
-If Affidavit of attorneys fees wasn't filed: Make one -
- FCL Proc.
-Aff. of Attny's fees- flat fee
- Merge
- max flat fee, 1300. Date, click OK
- Line 1 - change year to 1994
- Line 3 - add $150.00 and $70.00
- Make sure line D is last line on page
- Print, attach signature page (extras found in drawer)
- have notarized
- white out old file number on bottom and back of sign. Pg.
- Make Cert, of filing and have attny. sign.
-If Affidavit of attorneys fees is old:
-Check to see if FJ has same cost as Affidavit. If so, it's
ok, if not not make amended one.
- go to FCL processing, aff. of attny's fee, merge
- fill in 1300 for max fee
- type in "amended" affidavit as to attorney's fee
- fill in date on line 1 - to match signature of page
- fill in line 3, after services rendered, ($150.00 for attorney's
and $70.00 for legal assistants)
-print and attach to new signature page
- make notice of filing and have attny sign.
It is interesting that there is the same pattern of instructions in the U.S. Bank vs. Ayala case and JP Morgan Chase vs. Flowers case. And these two cases were filed by the law firm, Ben Ezra & Katz, the same law firm that is currently under investigation for using deceptive paperwork to foreclose on homes by the Florida Attorney General.
Also, 4closurefraud website provides another case with the same pattern of instructions. According to 4closurefraud website, the anonymous document did not disclose which law firm that instructions came from but it is suspected that the pattern of instructions match with Ben-Ezra affidavits:
For example, in the attached Affidavit As to Attorney’s Fees from U.S. Bank v. Ginyard (Ginyard)), line one has the year, 1994, as instructed. Line 3 contains the $150 and $70 dollars mentioned in the instructions. And Line D is the last line of the page. As you can see from the instructions, the paralegals are to then:
• Print, attach signature page (extras found in drawer)
• have notarized
• white out old file number on bottom and back of sign. Pg.
4closurefraud website received an interesting document from anonymous source that purports to be instructions for paralegals on as to how to create affidavits [from cut and paste] for filing so that the signatures could be mixed and matched at will for the court. Yes, it is hard to believe this but it is shocker that someone had the guts to pass this bombshell that is not surprising. In the anonymous source document provided by 4closurefraud website here is a sample of instructions for affidavits:
-If Affidavit of attorneys fees wasn't filed: Make one -
- FCL Proc.
-Aff. of Attny's fees- flat fee
- Merge
- max flat fee, 1300. Date, click OK
- Line 1 - change year to 1994
- Line 3 - add $150.00 and $70.00
- Make sure line D is last line on page
- Print, attach signature page (extras found in drawer)
- have notarized
- white out old file number on bottom and back of sign. Pg.
- Make Cert, of filing and have attny. sign.
-If Affidavit of attorneys fees is old:
-Check to see if FJ has same cost as Affidavit. If so, it's
ok, if not not make amended one.
- go to FCL processing, aff. of attny's fee, merge
- fill in 1300 for max fee
- type in "amended" affidavit as to attorney's fee
- fill in date on line 1 - to match signature of page
- fill in line 3, after services rendered, ($150.00 for attorney's
and $70.00 for legal assistants)
-print and attach to new signature page
- make notice of filing and have attny sign.
It is interesting that there is the same pattern of instructions in the U.S. Bank vs. Ayala case and JP Morgan Chase vs. Flowers case. And these two cases were filed by the law firm, Ben Ezra & Katz, the same law firm that is currently under investigation for using deceptive paperwork to foreclose on homes by the Florida Attorney General.
Also, 4closurefraud website provides another case with the same pattern of instructions. According to 4closurefraud website, the anonymous document did not disclose which law firm that instructions came from but it is suspected that the pattern of instructions match with Ben-Ezra affidavits:
For example, in the attached Affidavit As to Attorney’s Fees from U.S. Bank v. Ginyard (Ginyard)), line one has the year, 1994, as instructed. Line 3 contains the $150 and $70 dollars mentioned in the instructions. And Line D is the last line of the page. As you can see from the instructions, the paralegals are to then:
• Print, attach signature page (extras found in drawer)
• have notarized
• white out old file number on bottom and back of sign. Pg.
Wednesday, February 23, 2011
Florida AG launches probe to another law firm using deceptive paperwork to foreclose
Ben-Ezra & Katz, the Fort Lauderdale law firm fired earlier this month by Fannie Mae, is now on the Florida attorney general’s list of firms under investigation.
It’s unclear when the firm was put on the attorney general’s to-do list, but it wasn’t one of the original four that received subpoenas during the summer, or three more that got letters of inquiry last fall.
Ben-Ezra & Katz didn’t escape a judge’s ire this month when she expressed her displeasure for the sloppy handling of a foreclosure case by calling Marc Ben-Ezra into court for a scolding.
Now there is this from this from the Florida Attorney General’s Office…
Source: 4closurefraud
It’s unclear when the firm was put on the attorney general’s to-do list, but it wasn’t one of the original four that received subpoenas during the summer, or three more that got letters of inquiry last fall.
Ben-Ezra & Katz didn’t escape a judge’s ire this month when she expressed her displeasure for the sloppy handling of a foreclosure case by calling Marc Ben-Ezra into court for a scolding.
Now there is this from this from the Florida Attorney General’s Office…
Source: 4closurefraud
Biloxi Buzz for Wednesday
Emanuel Triumphs in Chicago Mayoral Race — CHICAGO — Rahm Emanuel, a former congressman who worked for two presidents, was elected mayor of Chicago on Tuesday, a victory that marks a new path for a city that has, for 22 years, been led by a singular, powerful force, Richard M. Daley
Wisconsin's Walker Signs Bill Requiring 2/3 Majority for Tax Increases — How Wisconsin becomes California. (photo: FredR on Flickr) — I got a sense from Sen. Chris Larson and some others in Wisconsin that the Governor and his Republican allies had run amok in the Capitol before attention …
Gaddafi sets stage for violent showdown
4 Americans on hijacked yacht dead off Somalia
Wisconsin's Walker Signs Bill Requiring 2/3 Majority for Tax Increases — How Wisconsin becomes California. (photo: FredR on Flickr) — I got a sense from Sen. Chris Larson and some others in Wisconsin that the Governor and his Republican allies had run amok in the Capitol before attention …
Gaddafi sets stage for violent showdown
4 Americans on hijacked yacht dead off Somalia
Paychecks to be withheld from absent Wis. senators — 14 Democratic senators fled to Illinois, stalling vote on budget repair bill — State senators who miss two or more session days will no longer get paid through direct deposit. They'll have to pick up their checks in person on the Senate floor during a session.
Federal judge rules for health care law — The perfect partisan streak in health care rulings continues, with D.C. federal district judge Gladys Kessler, a Clinton appointee, ruling the Affordable Care Act constitutional. She's the third Democratic judge to do so; two Republicans have found it unconstitutional.
How a whistle-blower conquered Countrywide
WHAT does it take to hold your powerful bosses accountable if they try to bully you out the door?Documents, e-mails, a former deputy district attorney as your lawyer — and a never-say-die approach.
Such was the lesson learned by Michael G. Winston, a former executive at the Countrywide Financial Corporation. Mr. Winston spent three years in a legal battle against Countrywide, the once-mighty mortgage giant, and its current owner, Bank of America, contending that he was punished and pushed out for not toeing the company line. On Feb. 4, he won: a jury in California awarded him $3.8 million in damages.
“It is the littlest of Davids beating the biggest of Goliaths and taking two of them on at once,” Mr. Winston said. “This is the story of somebody who tried to set a company right. But it was frightening to them for me to shine the light from the inside out.”
Mr. Winston’s story provides a glimpse into how business was done at Countrywide at the height of the subprime craziness — and how assiduously Angelo R. Mozilo, the company’s fallen leader, worked to quash dissent in the ranks. Mr. Winston had the audacity to question Countrywide practices. Mr. Mozilo was not pleased and, before long, Mr. Winston was marginalized and later dismissed.
Mr. Winston, a prominent executive in the field of organization management, is a rarity among corporate whistle-blowers. Most of them get run over by their former companies. A fascinating detail in his case: after providing to the opposition his list of witnesses, which included former colleagues who had also been let go by Bank of America, the bank hired several of them back. Then they testified against him.
Mr. Winston’s lawyer was Charles T. Mathews, a former prosecutor in the Los Angeles district attorney’s office. “This case is about holding these scoundrels accountable and it is absolutely vital that these people be brought in front of a jury,” Mr. Mathews said. “They hired these huge law firms with unlimited budgets, but when plain, ordinary citizens see the evidence and hear the facts they are repulsed by what these people did.”
The jury heard from an array of former Countrywide executives, including Mr. Mozilo, in a rare courtroom appearance. David Sambol, Countrywide’s former president, also testified.
Sam Usher, 73, was a juror on the case. A former human resources executive at General Motors, he is a program manager for addiction treatment centers at several hospitals in Los Angeles. Asked about the trial, Mr. Usher said the witnesses for Countrywide and Bank of America were unpersuasive.
“There was an air of arrogance about them,” he said. “The attorneys for the plaintiff caught most of them in little lies that cracked their credibility. Meanwhile, Mr. Winston’s witnesses had credibility and the documentation kind of supported his testimony.”
Mr. Winston did not win on all his claims. For example, the jury rejected his contention that Countrywide had reneged on an oral agreement to provide him with substantial stock awards in future years after he agreed to a relatively modest starting salary.
But the jury voted 9 to 3 that Bank of America’s dismissal was motivated by two of Mr. Winston’s actions — both essentially refusals to play the game that Countrywide wanted him to.
“The acquisition by Bank of America provided an opportunity to drop him off the cliff,” Mr. Usher said.
A spokeswoman for Bank of America said the bank would ask the trial court to reverse the jury verdict and enter judgment in the company’s favor. “We believe that the jury’s verdict finding liability on the wrongful-termination claim is not supported by any evidence, let alone ‘substantial evidence’ as is required by law,” she said.
MR. WINSTON joined Countrywide in May 2005, when the lender was riding the mortgage wave. He was hired as an executive vice president in the leadership development area to help Countrywide grow even bigger and groom better managers. His boss, he recalled, told him that the lender wanted to become “Goldman Sachs on the Pacific.” Soon after, he was promoted to managing director and enterprise chief leadership officer.
Mr. Winston’s career experience included successful stints at Motorola, McDonnell Douglas and Lockheed. He also worked previously as the global head of worldwide leadership and organizational strategy at Merrill Lynch in New York but resigned from that position in 2003 to take care of his parents, who were terminally ill.
It wasn’t long after he joined Countrywide that Mr. Winston began to worry about its business strategy, he said. He still recalls an episode from late 2005 that raised red flags for him. He found himself parked next to a man in the Countrywide lot whose car had vanity plates that read, “Fund’Em.” “I said: ‘I’m not familiar with that expression. What is this about?’ ” Mr. Winston recalled. The man replied that the term described the company’s growth strategy for 2006 — to fund all loans. “I was brand new and I said, ‘What if the person has no job?’ ” Mr. Winston said. The answer: “Fund ’em.”
“What if the person has no assets?”
Again: “Fund ’em.”
Click here for full story
Read on.
Such was the lesson learned by Michael G. Winston, a former executive at the Countrywide Financial Corporation. Mr. Winston spent three years in a legal battle against Countrywide, the once-mighty mortgage giant, and its current owner, Bank of America, contending that he was punished and pushed out for not toeing the company line. On Feb. 4, he won: a jury in California awarded him $3.8 million in damages.
“It is the littlest of Davids beating the biggest of Goliaths and taking two of them on at once,” Mr. Winston said. “This is the story of somebody who tried to set a company right. But it was frightening to them for me to shine the light from the inside out.”
Mr. Winston’s story provides a glimpse into how business was done at Countrywide at the height of the subprime craziness — and how assiduously Angelo R. Mozilo, the company’s fallen leader, worked to quash dissent in the ranks. Mr. Winston had the audacity to question Countrywide practices. Mr. Mozilo was not pleased and, before long, Mr. Winston was marginalized and later dismissed.
Mr. Winston, a prominent executive in the field of organization management, is a rarity among corporate whistle-blowers. Most of them get run over by their former companies. A fascinating detail in his case: after providing to the opposition his list of witnesses, which included former colleagues who had also been let go by Bank of America, the bank hired several of them back. Then they testified against him.
Mr. Winston’s lawyer was Charles T. Mathews, a former prosecutor in the Los Angeles district attorney’s office. “This case is about holding these scoundrels accountable and it is absolutely vital that these people be brought in front of a jury,” Mr. Mathews said. “They hired these huge law firms with unlimited budgets, but when plain, ordinary citizens see the evidence and hear the facts they are repulsed by what these people did.”
The jury heard from an array of former Countrywide executives, including Mr. Mozilo, in a rare courtroom appearance. David Sambol, Countrywide’s former president, also testified.
Sam Usher, 73, was a juror on the case. A former human resources executive at General Motors, he is a program manager for addiction treatment centers at several hospitals in Los Angeles. Asked about the trial, Mr. Usher said the witnesses for Countrywide and Bank of America were unpersuasive.
“There was an air of arrogance about them,” he said. “The attorneys for the plaintiff caught most of them in little lies that cracked their credibility. Meanwhile, Mr. Winston’s witnesses had credibility and the documentation kind of supported his testimony.”
Mr. Winston did not win on all his claims. For example, the jury rejected his contention that Countrywide had reneged on an oral agreement to provide him with substantial stock awards in future years after he agreed to a relatively modest starting salary.
But the jury voted 9 to 3 that Bank of America’s dismissal was motivated by two of Mr. Winston’s actions — both essentially refusals to play the game that Countrywide wanted him to.
“The acquisition by Bank of America provided an opportunity to drop him off the cliff,” Mr. Usher said.
A spokeswoman for Bank of America said the bank would ask the trial court to reverse the jury verdict and enter judgment in the company’s favor. “We believe that the jury’s verdict finding liability on the wrongful-termination claim is not supported by any evidence, let alone ‘substantial evidence’ as is required by law,” she said.
MR. WINSTON joined Countrywide in May 2005, when the lender was riding the mortgage wave. He was hired as an executive vice president in the leadership development area to help Countrywide grow even bigger and groom better managers. His boss, he recalled, told him that the lender wanted to become “Goldman Sachs on the Pacific.” Soon after, he was promoted to managing director and enterprise chief leadership officer.
Mr. Winston’s career experience included successful stints at Motorola, McDonnell Douglas and Lockheed. He also worked previously as the global head of worldwide leadership and organizational strategy at Merrill Lynch in New York but resigned from that position in 2003 to take care of his parents, who were terminally ill.
It wasn’t long after he joined Countrywide that Mr. Winston began to worry about its business strategy, he said. He still recalls an episode from late 2005 that raised red flags for him. He found himself parked next to a man in the Countrywide lot whose car had vanity plates that read, “Fund’Em.” “I said: ‘I’m not familiar with that expression. What is this about?’ ” Mr. Winston recalled. The man replied that the term described the company’s growth strategy for 2006 — to fund all loans. “I was brand new and I said, ‘What if the person has no job?’ ” Mr. Winston said. The answer: “Fund ’em.”
“What if the person has no assets?”
Again: “Fund ’em.”
Click here for full story
Read on.
A shocking robo-signing story: Robo-lawyering
Written by Biloxi
Can you imagine terminating your employment with a company and learning that documents in the company are bearing your name after you left? Well, this was what happened to Anna Malone,an attorney that left her employment with Shapiro & Fishman but only to discover that her company continued to file documents with the court bearing her name. And Ms. Malone was not a happy woman. Last year, Ms. Malone filed a cease and desist order against her former law firm. Ms. Malone ended her employment on July 31, 2010 and didn't authorize the law firm to use her name. She requested that the firm send her a certification that all files under her name or with her electronic signature since July 31, 2010 to have been withdrawn and resolved. Check out Ms. Malone's name on all these notices to the court. Click here.
It is interesting at Ms. Malone currently works for Lender Processing Services (LPS). LPS's subsidiary, Docx LLC is under investigation for foreclosure fraud.
And there is more robo-signing documents under Shapiro & Fishman. 4closurefraud website wrote:
Note #1 (lost note count, copy of note with a single endorsement in blank by Betty Cotton attached to the compliant)
Note#2 received as returned exhibit to affirmative defenses which also has a SINGLE endorsement in blank by Debra Sierck.
Read more on these two exhibits. Click here. I wouldn't be surprised if more shoes to drop of fraud under Shapiro and Fishman.
Can you imagine terminating your employment with a company and learning that documents in the company are bearing your name after you left? Well, this was what happened to Anna Malone,an attorney that left her employment with Shapiro & Fishman but only to discover that her company continued to file documents with the court bearing her name. And Ms. Malone was not a happy woman. Last year, Ms. Malone filed a cease and desist order against her former law firm. Ms. Malone ended her employment on July 31, 2010 and didn't authorize the law firm to use her name. She requested that the firm send her a certification that all files under her name or with her electronic signature since July 31, 2010 to have been withdrawn and resolved. Check out Ms. Malone's name on all these notices to the court. Click here.
It is interesting at Ms. Malone currently works for Lender Processing Services (LPS). LPS's subsidiary, Docx LLC is under investigation for foreclosure fraud.
And there is more robo-signing documents under Shapiro & Fishman. 4closurefraud website wrote:
Note #1 (lost note count, copy of note with a single endorsement in blank by Betty Cotton attached to the compliant)
Note#2 received as returned exhibit to affirmative defenses which also has a SINGLE endorsement in blank by Debra Sierck.
Read more on these two exhibits. Click here. I wouldn't be surprised if more shoes to drop of fraud under Shapiro and Fishman.
Tuesday, February 22, 2011
Minnesota soldier sues Citigroup for penalizing student loan
Written by Biloxi
Here is another military soldier abused by a major bank, and another bank that has violated the Servicemembers Civil Relief Act. First, it is JP Morgan Chase and then Bank of America. Now, it is Citigroup. Capt. Lyndsey Olson, member of the Minnesota National Guard, is suing the bank of penalizing military personnel by placing their loans into "mandatory forbearance." A "mandatory forbearance" under Citigroup would accrue unpaid interest to the soldier's loan, and then that interest is added to the loan balance when the soldier's active-duty period ends. Therefore, Citibank can collect interest on a larger sum of money from the soldier's loan.
Here is Ms. Olsen's story:
Olson said she contacted Citibank to have her interest rate, 9.25 percent at the time, capped at 6 percent. Citibank agreed to the rate cap, while placing her loan into forbearance and canceling the automatic payment feature on her loan. When she called to complain, Citigroup said that forbearance was required if she wanted to receive the lower interest rate.
As a result, Olson was forced to arrange loan payments from a combat zone and returned from Iraq with a larger debt burden than if she had not applied for relief under the SCRA. "Citibank is taking a population that is worthy of protection and turning it into a moneymaking scheme," she said.
Citibank calls a "mandatory forbearance" of loan a benefit:
Citibank argues that forbearance is a benefit because it relieves soldiers from making payments while they are on active duty. This gives service members "additional time and flexibility to repay their debts," the bank said in court documents.
Big problem for Citigroup as the bank doesn't understand the SCRA law for military soldiers with a student loan:
Reduced Interest: A member may reduce the higher interest rates the members pays for any financial obligation (credit card, loan, mortgage) individually or jointly entered into before active service to six percent (6%) if active service materially affects the member’s ability to repay the financial obligation. In addition, the SCRA prohibits the lender from accelerating the principal amount owed, and forgives (vs. defers) the excess interest payments that would have been due under the higher interest rate so that the member is not liable for the excess after he or she is released from active service. This reduced interest rate is effective only during the period of active military duty. Finally, this reduced rate does not apply to financial obligations (including refinancing or credit card balance increases) entered into or accrued while on active service, or to federal guaranteed student loans.
The question is will Citigroup jump on the band wagon like Chase and Bank of America and create new program for the troops?
Here is another military soldier abused by a major bank, and another bank that has violated the Servicemembers Civil Relief Act. First, it is JP Morgan Chase and then Bank of America. Now, it is Citigroup. Capt. Lyndsey Olson, member of the Minnesota National Guard, is suing the bank of penalizing military personnel by placing their loans into "mandatory forbearance." A "mandatory forbearance" under Citigroup would accrue unpaid interest to the soldier's loan, and then that interest is added to the loan balance when the soldier's active-duty period ends. Therefore, Citibank can collect interest on a larger sum of money from the soldier's loan.
Here is Ms. Olsen's story:
Olson said she contacted Citibank to have her interest rate, 9.25 percent at the time, capped at 6 percent. Citibank agreed to the rate cap, while placing her loan into forbearance and canceling the automatic payment feature on her loan. When she called to complain, Citigroup said that forbearance was required if she wanted to receive the lower interest rate.
As a result, Olson was forced to arrange loan payments from a combat zone and returned from Iraq with a larger debt burden than if she had not applied for relief under the SCRA. "Citibank is taking a population that is worthy of protection and turning it into a moneymaking scheme," she said.
Citibank calls a "mandatory forbearance" of loan a benefit:
Citibank argues that forbearance is a benefit because it relieves soldiers from making payments while they are on active duty. This gives service members "additional time and flexibility to repay their debts," the bank said in court documents.
Big problem for Citigroup as the bank doesn't understand the SCRA law for military soldiers with a student loan:
Reduced Interest: A member may reduce the higher interest rates the members pays for any financial obligation (credit card, loan, mortgage) individually or jointly entered into before active service to six percent (6%) if active service materially affects the member’s ability to repay the financial obligation. In addition, the SCRA prohibits the lender from accelerating the principal amount owed, and forgives (vs. defers) the excess interest payments that would have been due under the higher interest rate so that the member is not liable for the excess after he or she is released from active service. This reduced interest rate is effective only during the period of active military duty. Finally, this reduced rate does not apply to financial obligations (including refinancing or credit card balance increases) entered into or accrued while on active service, or to federal guaranteed student loans.
The question is will Citigroup jump on the band wagon like Chase and Bank of America and create new program for the troops?
Biloxi Buzz for Tuesday
Libya protests spread and intensify — Security forces open fire on anti-government demonstrators in Tripoli, as protests escalate across the country. — Scores of people have been reported killed in continuing violence in the Libyan capital, Tripoli, amid escalating protests …
Wisconsin Senate can eliminate collective bargaining for teachers — even without Democrats who fled
Stripped, punched and whipped with flag poles: Full horror of Lara Logan's attack emerges
Wisconsin Senate can eliminate collective bargaining for teachers — even without Democrats who fled
First lady hits the slopes — Michelle Obama enjoys fresh veggies at Restaurant Kelly Liken — Daily staff report newsroom@vaildaily.com — VAIL — First lady Michelle Obama enjoyed locally grown fare at a Vail restaurant Saturday night before hitting the slopes of Vail Mountain early Sunday.
American Held in Pakistan Worked With C.I.A. — WASHINGTON — The American arrested in Pakistan after shooting two men at a crowded traffic stop was part of a covert, C.I.A.-led team collecting intelligence and conducting surveillance on militant groups deep inside the country, according to American government officials.
Stripped, punched and whipped with flag poles: Full horror of Lara Logan's attack emerges
Federal prosecutors drop criminal probe of former Countrywide CEO Angelo Mozilo
Written by Biloxi
Crime doesn't pay when it comes to former corporate executives that commit fraud in the foreclosure crisis. Countrywide former CEO Angelo Mozilo skates again from seeing the sight of possible prison. Federal prosecutors drop their criminal investigation against Angelo R. Mozilo. Federal prosecutors determined that Mozilo's actions in the mortgage crisis, which led to $67.5-million settlement against him, did not amount to criminal wrongdoing according to the LA times. According to the LA times, "the criminal investigation into Mozilo was never announced publicly, and as a rule federal prosecutors make no formal announcement when such cases are closed".
Mozillo settled with the Securities and Exchange Commission on insider trading allegations last October:
Regulators had contended that Mr. Mozilo sold $140 million in Countrywide stock between 2006 and 2007 even as he recognized that his company was faltering. Countrywide and Bank of America paid $45 million of Mr. Mozilo’s $67.5 million settlement, and he was responsible for the rest.
Without admitting or denying wrongdoing, Mr. Mozilo agreed to be banned from serving as an officer or a director of a public company.
While Mozilo skates criminal probe and not civil probe, thousands of homeowners and investors are victims of Mozilo's demise. Investors lost million of dollars while homeowners lost their homes. Both investors and homeowners left holding the bag. This is another failed investigation of criminal prosecution. And this follows another corrupted corporate executive at AIG Financial Products in his dealings in mortgage-related securities, Joseph Cassano. SEC and Justice Department decided not to bring criminal charges on Cassano. The absence of "no one is above law" in the criminal acts of the banks and its executives is a real threat to the justice system.
Crime doesn't pay when it comes to former corporate executives that commit fraud in the foreclosure crisis. Countrywide former CEO Angelo Mozilo skates again from seeing the sight of possible prison. Federal prosecutors drop their criminal investigation against Angelo R. Mozilo. Federal prosecutors determined that Mozilo's actions in the mortgage crisis, which led to $67.5-million settlement against him, did not amount to criminal wrongdoing according to the LA times. According to the LA times, "the criminal investigation into Mozilo was never announced publicly, and as a rule federal prosecutors make no formal announcement when such cases are closed".
Mozillo settled with the Securities and Exchange Commission on insider trading allegations last October:
Regulators had contended that Mr. Mozilo sold $140 million in Countrywide stock between 2006 and 2007 even as he recognized that his company was faltering. Countrywide and Bank of America paid $45 million of Mr. Mozilo’s $67.5 million settlement, and he was responsible for the rest.
Without admitting or denying wrongdoing, Mr. Mozilo agreed to be banned from serving as an officer or a director of a public company.
While Mozilo skates criminal probe and not civil probe, thousands of homeowners and investors are victims of Mozilo's demise. Investors lost million of dollars while homeowners lost their homes. Both investors and homeowners left holding the bag. This is another failed investigation of criminal prosecution. And this follows another corrupted corporate executive at AIG Financial Products in his dealings in mortgage-related securities, Joseph Cassano. SEC and Justice Department decided not to bring criminal charges on Cassano. The absence of "no one is above law" in the criminal acts of the banks and its executives is a real threat to the justice system.
Monday, February 21, 2011
Open thread for Monday
From yesterday's Wisconsin forum on Democratic Underground:
Ian's Pizza on State St. heads to battlestations!
People have been calling in pizza orders to Ian's on State St all week from the around the country to have them delivered to protesters in the the Capitol rotunda. Today, it reached critical mass. I read this from a local Facebook friend (who I also saw today at the Square):UPDATE: Here's their Facebook page here if you want to check the running tally of states and countries of donations
"Ian's Pizza on State has shut down operations to the public and is now only taking donation orders for pizza's for the protesters. They have received pizza order donations from across the US, Eygpt, Europe - all around the world - to support the protesters. Unbelievable!"
They apparently already have enough orders to deliver to the Rotunda to keep them busy all night. Keep in mind that this is a Saturday night, already one of their busiest.
Lawsuit filed in local bank break-in case
Written by Biloxi
ORANGE COUNTY, Fla. (WOFL FOX 35) - Nancy Jacobini is a homeowner and has been for awhile. For two decades, she has been in the same house, which makes what happened on September 28th, 2010 so bizarre.
"It was about 5:30 p.m. It was a very rainy, dark, dreary day. I was in the front bedroom lying down on the bed with the light on. All of a sudden I heard someone trying to put their hand on the door handle. At that point I knew I was in trouble. I immediately grabbed my cell phone, went to the bathroom, locked my door and called 911. I was scared. Very scared. Cause I could hear the aggressiveness at the door. I panicked. Maybe he followed me. Maybe he's a sex offender. I had no idea," remembers Jacobini.
Orange County deputies showed up at the house. They found a locksmith changing the hardware on Nancy's front door. He was sent by Nancy's bank: JP Morgan Chase.
"The bank broke into my home for no darn good reason," says Jacobini.
"Americans need to wake up, because if we don't stop them from doing this now, what's to stop them from kicking everybody's doors down?" asks Matthew Weidner, Nancy's attorney.
http://www.myfoxorlando.com/dpp/news/local/021511-lawsuit-filed-in-local-bank-break-in-case
ORANGE COUNTY, Fla. (WOFL FOX 35) - Nancy Jacobini is a homeowner and has been for awhile. For two decades, she has been in the same house, which makes what happened on September 28th, 2010 so bizarre.
"It was about 5:30 p.m. It was a very rainy, dark, dreary day. I was in the front bedroom lying down on the bed with the light on. All of a sudden I heard someone trying to put their hand on the door handle. At that point I knew I was in trouble. I immediately grabbed my cell phone, went to the bathroom, locked my door and called 911. I was scared. Very scared. Cause I could hear the aggressiveness at the door. I panicked. Maybe he followed me. Maybe he's a sex offender. I had no idea," remembers Jacobini.
Orange County deputies showed up at the house. They found a locksmith changing the hardware on Nancy's front door. He was sent by Nancy's bank: JP Morgan Chase.
"The bank broke into my home for no darn good reason," says Jacobini.
"Americans need to wake up, because if we don't stop them from doing this now, what's to stop them from kicking everybody's doors down?" asks Matthew Weidner, Nancy's attorney.
http://www.myfoxorlando.com/dpp/news/local/021511-lawsuit-filed-in-local-bank-break-in-case
OCC chief found deficiencies in bank foreclosure proceedings
Written by Biloxi
Office of Comptroller of Currency (OCC) acting chief John Walsh tesified in front of the Senate Banking Committee on Thursday on the agency's undertaken to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Here are the highlights of the OCC's focus according to Mr. Walsh's testimony:
• The OCC’s progress integrating the staff and functions of the Office of ThriftOffice of Comptroller of Currency (OCC) acting chief John Walsh tesified in front of the Senate Banking Committee on Thursday on the agency's undertaken to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Here are the highlights of the OCC's focus according to Mr. Walsh's testimony:
Supervision (OTS) into the OCC, and identifying employees for transfer to the
Consumer Financial Protection Bureau (CFPB);
• Highlights of our work to date in implementing important policy and rulemaking
initiatives required by Dodd-Frank, including the OCC’s participation on the
Financial Stability Oversight Council (FSOC or Council), and the challenges of
ensuring that these initiatives are appropriately coordinated with other
participating agencies and with international efforts to reform capital and liquidity
standards for financial institutions; and the Council’s achievements thus far; and
• Provides an update on a significant issue that was just emerging at the time of the
Committee’s last hearing on Dodd-Frank implementation by reporting on the
steps that the OCC, working with our fellow regulators, has taken to identify and
address irregularities in institutions’ foreclosure processes and our efforts to foster
development and implementation of comprehensive and nationally applicable
mortgage servicing standards.
In his testimony, Mr. Walsh explained his findings of mortgage servicers' deficiencies in the foreclosure process. OCC examiners reviewed samples of approximately 2,800 borrower foreclosure cases in various stages of foreclosure in judicial states and non-judicial states.. Here is the highlight of the findings according to Mr. Walsh:
In general, the examinations found critical deficiencies and shortcomings in foreclosure
governance processes, foreclosure document preparation processes, and oversight and
monitoring of third party law firms and vendors. These deficiencies have resulted in
violations of state and local foreclosure laws, regulations, or rules and have had an
adverse affect on the functioning of the mortgage markets and the U.S. economy as a
whole. By emphasizing timeliness and cost efficiency over quality and accuracy,
examined institutions fostered an operational environment that is not consistent with
conducting foreclosure processes in a safe and sound manner.
Despite these deficiencies, the examination of specific cases and a review of servicers’
custodial activities found that loans were seriously delinquent, and that servicers
maintained documentation of ownership and had a perfected interest in the mortgage to
support their legal standing to foreclose. In addition, case reviews evidenced that
servicers were in contact with troubled borrowers and had considered loss mitigation
alternatives, including loan modifications. A small number of foreclosure sales should
not have proceeded because of an intervening event or condition, such as the borrower:
(a) being covered by the Servicemembers Civil Relief Act; (b) filing bankruptcy shortly
before the foreclosure action; or (c) being approved for a trial period modification.
Mr. Walsh had expressed sanctions and penalties to the bank. In addition, OCC developed a framework for reforms for comprehensive mortgage servicing standards. As I have said some quite some time, sanctions, punishments, and penalties must be implemented to the banks. And criminal charges should be filed against the banks that violated the Servicemembers Civil Relief Act (SCRA). No one is above the law and neither are the banks.
Bernie Madoff says banks ‘had to know’ of fraud
Written by Biloxi
Bernie Madoff, who is serving a 150-year sentence for milking millions of dollars from investors in a Ponzi scheme had a lot to say in prison in what banks knew in his Ponzi scheme. JP Morgan Chase who is being sued by Madoff trustee deny that the bank knew or was an accomplice in Madoff's Ponzi scheme. Madoff disagrees according to the NY Times:
“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”
While he acknowledged his guilt in the interview and said nothing could excuse his crimes, he focused his comments laserlike on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. In an e-mail written on Jan. 13, he observed that many long-term clients made more in legitimate profits from him in the years before the fraud than they could have elsewhere. “I would have loved for them to not lose anything, but that was a risk they were well aware of by investing in the market,” he wrote.
Mr. Madoff said he was startled to learn about some of the e-mails and messages raising doubts about his results — now emerging in lawsuits — that bankers were passing around before his scheme collapsed.
“I’m reading more now about how suspicious they were than I ever realized at the time,” he said with a faint smile.
He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.
And Mr. Madoff provided information to Irving Picard, Madoff's trustee, to help uncover assets for the victims of Madoff and not to provide him with criminal evidence against the banks:
In some e-mails, Mr. Madoff conceded that Mr. Picard’s team conducted its own investigation into the withdrawals made by some big clients, in the years before the Ponzi scheme collapsed, to determine who might have known what and when. Such withdrawals could indicate that investors could have been aware of the fraud, which could increase their liability.
And what did JP Morgan Chase know about Madoff's fraud? According to the Wall Street Journal, JPMorgan Chase CEO knew of the banks' decision to pull money out from hedge funds that were Madoff-related but wasn't informed of report of red flags on Madoff's Ponzi practices:
J.P. Morgan Chase & Co. Chief Executive James Dimon wasn't informed about a formal report that raised suspicions about Bernard Madoff prior to Madoff's arrest. But he did know about the bank's 2008 decision to pull money from many hedge funds, some of which turned out to be Madoff-related, according to people familiar with the Madoff case.
It wasn't until after Mr. Madoff's December 2008 arrest that the CEO was given a full accounting of the firm's exposure and told that some of the funds had ties to Mr. Madoff, these people added.
What J.P. Morgan executives knew about Madoff is at the heart of a lawsuit alleging that J.P. Morgan Chase ignored or dismissed warning signs about the fraud even as it earned hundreds of millions from its relationship with the firm. The suit was filed last December by Irving Picard, the trustee seeking to recover money for Mr. Madoff's victims, and unsealed earlier this month
Of course, Mr. Madoff had asserted that banks and hedge funds "were complicit" in his Ponzi scheme. The question how many more major banks and hedge funds ignored the warning signs of Madoff's fraud yet profits from their relationship to Madoff?
Bernie Madoff, who is serving a 150-year sentence for milking millions of dollars from investors in a Ponzi scheme had a lot to say in prison in what banks knew in his Ponzi scheme. JP Morgan Chase who is being sued by Madoff trustee deny that the bank knew or was an accomplice in Madoff's Ponzi scheme. Madoff disagrees according to the NY Times:
“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”
While he acknowledged his guilt in the interview and said nothing could excuse his crimes, he focused his comments laserlike on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. In an e-mail written on Jan. 13, he observed that many long-term clients made more in legitimate profits from him in the years before the fraud than they could have elsewhere. “I would have loved for them to not lose anything, but that was a risk they were well aware of by investing in the market,” he wrote.
Mr. Madoff said he was startled to learn about some of the e-mails and messages raising doubts about his results — now emerging in lawsuits — that bankers were passing around before his scheme collapsed.
“I’m reading more now about how suspicious they were than I ever realized at the time,” he said with a faint smile.
He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.
And Mr. Madoff provided information to Irving Picard, Madoff's trustee, to help uncover assets for the victims of Madoff and not to provide him with criminal evidence against the banks:
In some e-mails, Mr. Madoff conceded that Mr. Picard’s team conducted its own investigation into the withdrawals made by some big clients, in the years before the Ponzi scheme collapsed, to determine who might have known what and when. Such withdrawals could indicate that investors could have been aware of the fraud, which could increase their liability.
And what did JP Morgan Chase know about Madoff's fraud? According to the Wall Street Journal, JPMorgan Chase CEO knew of the banks' decision to pull money out from hedge funds that were Madoff-related but wasn't informed of report of red flags on Madoff's Ponzi practices:
J.P. Morgan Chase & Co. Chief Executive James Dimon wasn't informed about a formal report that raised suspicions about Bernard Madoff prior to Madoff's arrest. But he did know about the bank's 2008 decision to pull money from many hedge funds, some of which turned out to be Madoff-related, according to people familiar with the Madoff case.
It wasn't until after Mr. Madoff's December 2008 arrest that the CEO was given a full accounting of the firm's exposure and told that some of the funds had ties to Mr. Madoff, these people added.
What J.P. Morgan executives knew about Madoff is at the heart of a lawsuit alleging that J.P. Morgan Chase ignored or dismissed warning signs about the fraud even as it earned hundreds of millions from its relationship with the firm. The suit was filed last December by Irving Picard, the trustee seeking to recover money for Mr. Madoff's victims, and unsealed earlier this month
Of course, Mr. Madoff had asserted that banks and hedge funds "were complicit" in his Ponzi scheme. The question how many more major banks and hedge funds ignored the warning signs of Madoff's fraud yet profits from their relationship to Madoff?
BofA problem: Paying off mortgage results in default
Written by Biloxi
Here is another homeowner who never missed a mortgage payment that became a victim of a bank's major blunder. This homeowner was not seeking a loan modification or refinance. The homeowner was paying off her entire home in full. Here is Nancy Schweitzer's story and her nightmare with Bank of America:
"My credit should be pristine," Schweitzer said. "I did everything right."
It was with great pride that she paid off her mortgage in November, 24 years early. The monthly payments, she said, were leaving her too little spending money. With the mortgage gone, she would also avoid decades of interest payments.
Her lender, Bank of America, had given her the payoff amount and reminded her she also had money in her escrow account for taxes. The Bank of America representative told her not to worry — when she paid off the mortgage, the $2,776.13 in escrow would be applied to the principal.
On Nov. 13, Schweitzer went to her bank and obtained a cashier's check for $61,385.44 which, combined with the escrow money, equaled the $64,161.57 payoff.
Unfortunately, Ms. Schweitzer's happiness didn't last that long:
A month later, Schweitzer became concerned when she hadn't received any documents that showed she owned her house free and clear. So she called Bank of America, where a representative told her the escrow money hadn't been applied to the principal.
"The person I spoke to was going to correct the error that day," she said. "I thought it was settled."
It wasn't.
On Jan. 15, Schweitzer received a letter from Bank of America informing her that her monthly payment was past due.
"We want to help you avoid foreclosure," the letter said.
And here is another example of a bank's major blunder of ruining a homeowner's credit who was current on her mortgage and had paid off her entire house payment. Bank of America as well as the other major banks created a very dysfunctional industry where customer service has become lost in translation. And here is an interesting nugget from Propublica that gives exampples of a dysfunctional industry:
It was common industry practice to tie employees' pay to keeping calls short. Among the four largest servicers, calls with homeowners average around eight minutes, according to data the companies submitted to Congress last year.
Many employees tasked with working with homeowners were moved from collections departments, and multiple current and former servicing employees said the emphasis was still on collections.
“Your manager is telling you, ‘Collect, collect, collect,’ ” said Debra Foley, who also had no experience when she was hired by Countrywide near the end of 2008. “Most people want to stay in their house. So why aren’t they”—meaning banks—“helping?”
Mairone said Bank of America, which acquired Countrywide in 2008, has since “created more of a distinction between what a collector does and then what a modification associate will do to help the customer.”
Retaining experienced employees has also been a problem for servicers. Most of the large servicers reported to Congress last year that their call centers had annual turnover rates around 25 percent.
And certainly struggling homeowners are not the only target for banks to abuse. Current homeowners on mortgage payment are now the new victims in foreclosure fraud.
Here is another homeowner who never missed a mortgage payment that became a victim of a bank's major blunder. This homeowner was not seeking a loan modification or refinance. The homeowner was paying off her entire home in full. Here is Nancy Schweitzer's story and her nightmare with Bank of America:
"My credit should be pristine," Schweitzer said. "I did everything right."
It was with great pride that she paid off her mortgage in November, 24 years early. The monthly payments, she said, were leaving her too little spending money. With the mortgage gone, she would also avoid decades of interest payments.
Her lender, Bank of America, had given her the payoff amount and reminded her she also had money in her escrow account for taxes. The Bank of America representative told her not to worry — when she paid off the mortgage, the $2,776.13 in escrow would be applied to the principal.
On Nov. 13, Schweitzer went to her bank and obtained a cashier's check for $61,385.44 which, combined with the escrow money, equaled the $64,161.57 payoff.
Unfortunately, Ms. Schweitzer's happiness didn't last that long:
A month later, Schweitzer became concerned when she hadn't received any documents that showed she owned her house free and clear. So she called Bank of America, where a representative told her the escrow money hadn't been applied to the principal.
"The person I spoke to was going to correct the error that day," she said. "I thought it was settled."
It wasn't.
On Jan. 15, Schweitzer received a letter from Bank of America informing her that her monthly payment was past due.
"We want to help you avoid foreclosure," the letter said.
And here is another example of a bank's major blunder of ruining a homeowner's credit who was current on her mortgage and had paid off her entire house payment. Bank of America as well as the other major banks created a very dysfunctional industry where customer service has become lost in translation. And here is an interesting nugget from Propublica that gives exampples of a dysfunctional industry:
It was common industry practice to tie employees' pay to keeping calls short. Among the four largest servicers, calls with homeowners average around eight minutes, according to data the companies submitted to Congress last year.
Many employees tasked with working with homeowners were moved from collections departments, and multiple current and former servicing employees said the emphasis was still on collections.
“Your manager is telling you, ‘Collect, collect, collect,’ ” said Debra Foley, who also had no experience when she was hired by Countrywide near the end of 2008. “Most people want to stay in their house. So why aren’t they”—meaning banks—“helping?”
Mairone said Bank of America, which acquired Countrywide in 2008, has since “created more of a distinction between what a collector does and then what a modification associate will do to help the customer.”
Retaining experienced employees has also been a problem for servicers. Most of the large servicers reported to Congress last year that their call centers had annual turnover rates around 25 percent.
And certainly struggling homeowners are not the only target for banks to abuse. Current homeowners on mortgage payment are now the new victims in foreclosure fraud.
Biloxi Buzz for Monday
Wis. union head calls on teachers to go to work — MADISON, Wis. — The head of Wisconsin's powerful teachers' union is calling on educators to return to classrooms Monday and Tuesday rather than continue being absent to protest an anti-union bill at the state Capitol
Former aide rips Palin in leaked book manuscript — UNPUBLISHED: Former governor broke election law, Bailey alleges. — A leaked manuscript by one of Sarah Palin's closest aides from her time as governor charges that Palin broke state election law in her 2006 gubernatorial campaign
Retiring Boomers Find 401(k) Plans Fall Short — The 401(k) generation is beginning to retire, and it isn't a pretty sight. — The retirement savings plans that many baby boomers thought would see them through old age are falling short in many cases. — The median household headed …
Allstate Sues Citigroup, Deutsche Bank over RMBS
Written by Biloxi
More trouble for the banks. So far, Allstate sued Bank of America and JP Morgan Chase of being misled over millions of dollars of bad mortgage backed securities that the insurer were sold and lost money over. Add Citgroup and Deutsche Bank to the list to being sued that was filed in the New York state Supreme Court in Manhattan:
The insurer said it bought more than $200 million of the securities, backed by residential mortgages, from the Citigroup defendants and about $185 million from the Deutsche Bank units after relying on misrepresentations and omissions regarding underwriting standards, owner occupancy data and loan-to-value ratios.
“Allstate was made to believe it was buying highly rated, safe securities,” the Northbrook, Illinois-based company said in its complaint against New York-based Citigroup. “Defendants knew the pools were toxic mixes of loans extended to borrowers who could not afford the properties and thus were highly likely to default.”
It sounds like more shoes to drop in lawsuits in toxic loans. Who else is next on Allstate's list? And are other insurance companies going to follow Allstate's footsteps?
More trouble for the banks. So far, Allstate sued Bank of America and JP Morgan Chase of being misled over millions of dollars of bad mortgage backed securities that the insurer were sold and lost money over. Add Citgroup and Deutsche Bank to the list to being sued that was filed in the New York state Supreme Court in Manhattan:
The insurer said it bought more than $200 million of the securities, backed by residential mortgages, from the Citigroup defendants and about $185 million from the Deutsche Bank units after relying on misrepresentations and omissions regarding underwriting standards, owner occupancy data and loan-to-value ratios.
“Allstate was made to believe it was buying highly rated, safe securities,” the Northbrook, Illinois-based company said in its complaint against New York-based Citigroup. “Defendants knew the pools were toxic mixes of loans extended to borrowers who could not afford the properties and thus were highly likely to default.”
It sounds like more shoes to drop in lawsuits in toxic loans. Who else is next on Allstate's list? And are other insurance companies going to follow Allstate's footsteps?
JP Morgan Chase makes amends for overcharging soldiers
Written by Biloxi
After an investigative report by NBC News of JP Morgan Chase overcharging thousands of soldiers' mortgages and foreclosing on their homes, the bank make changes and amends for its treatment of military soldiers on mortgage loans. This week, Chase rolls out a new program effective April 1 for the soldiers according the Chase's website:
• Lower the mortgage interest rate for active duty military to 4 percent (2 points less than required by law).
• Start an enhanced modification program for anyone serving in the military after Sept. 11, 2001. Yes, over the past decade. This program will be for anyone delinquent or having problems paying the mortgage.
• Set up a special 24-hour hotline staffed by experts.
• Refuse to foreclose on any active-duty military personnel.
• Donate 1,000 homes to military families and veterans over the next five years in conjunction with its non-profit partners.
• Offer more jobs for veterans.
• Will form an alliance with other major corporate employers to commit to hire 100,000 military and veterans in total over the next ten years.
JP Morgan Chase CEO Jamie Dimon expressed regret for the bank's mistakes. Mr. Dimon said, "This company has a great history of honoring military and veterans, and the mistakes we made on military foreclosures are a painful aberration on that track record. We deeply apologize to our military customers and their families for these mistakes. We cannot undo them, but we can take accountability for them, fix them and learn from them. Today we want to begin a new way forward with the military and veteran community to make serving them a core part of how we operate our business every day. Our servicemen and servicewomen deserve nothing less."
Unfortunately, Dick Harpootlian, the South Carolina lawyer who is representing some of the servicemembers mistreated by Chase responded to Chase's new program for the troops:
"When I was prosecuting cases, I never had a defendant who got caught breaking the law that didn't want to give back what they took and promise to lead a better life."
JP Morgan Chase has admitted that it overcharged 4,500 soldiers and wrongly foreclosed on 18 of them and said to reimburse over $2 million to the troops and get back the homes of troops or settle with troops that lost their homes.
After NBC news report of JP Morgan Chase's scandal, Bank of America has announced that the bank will create a new program to assist those active duty soldiers. Why would Bank of America now announce a new program to help the troops? Maybe it is because Good Morning America host George Stephanopoulos received an email from a soldier who had problems with Bank of America:
I received an email last month from Sgt. Keith Oliver – a soldier currently deployed in Iraq. He told me that after Bank of America had reduced his payments for two years the bank suddenly came back and said he owed about $19,000 or else he would face foreclosure.
He kept calling the bank to explain he was deployed but Oliver said he bounced from one department to another until finally he contacted us at “GMA” to ask for help.
When we called Bank of America it quickly realized the error and fixed the situation with Oliver.
As you can see, JP Morgan Chase is not the only bank that mistreated the military soldiers.
After an investigative report by NBC News of JP Morgan Chase overcharging thousands of soldiers' mortgages and foreclosing on their homes, the bank make changes and amends for its treatment of military soldiers on mortgage loans. This week, Chase rolls out a new program effective April 1 for the soldiers according the Chase's website:
• Lower the mortgage interest rate for active duty military to 4 percent (2 points less than required by law).
• Start an enhanced modification program for anyone serving in the military after Sept. 11, 2001. Yes, over the past decade. This program will be for anyone delinquent or having problems paying the mortgage.
• Set up a special 24-hour hotline staffed by experts.
• Refuse to foreclose on any active-duty military personnel.
• Donate 1,000 homes to military families and veterans over the next five years in conjunction with its non-profit partners.
• Offer more jobs for veterans.
• Will form an alliance with other major corporate employers to commit to hire 100,000 military and veterans in total over the next ten years.
JP Morgan Chase CEO Jamie Dimon expressed regret for the bank's mistakes. Mr. Dimon said, "This company has a great history of honoring military and veterans, and the mistakes we made on military foreclosures are a painful aberration on that track record. We deeply apologize to our military customers and their families for these mistakes. We cannot undo them, but we can take accountability for them, fix them and learn from them. Today we want to begin a new way forward with the military and veteran community to make serving them a core part of how we operate our business every day. Our servicemen and servicewomen deserve nothing less."
Unfortunately, Dick Harpootlian, the South Carolina lawyer who is representing some of the servicemembers mistreated by Chase responded to Chase's new program for the troops:
"When I was prosecuting cases, I never had a defendant who got caught breaking the law that didn't want to give back what they took and promise to lead a better life."
JP Morgan Chase has admitted that it overcharged 4,500 soldiers and wrongly foreclosed on 18 of them and said to reimburse over $2 million to the troops and get back the homes of troops or settle with troops that lost their homes.
After NBC news report of JP Morgan Chase's scandal, Bank of America has announced that the bank will create a new program to assist those active duty soldiers. Why would Bank of America now announce a new program to help the troops? Maybe it is because Good Morning America host George Stephanopoulos received an email from a soldier who had problems with Bank of America:
I received an email last month from Sgt. Keith Oliver – a soldier currently deployed in Iraq. He told me that after Bank of America had reduced his payments for two years the bank suddenly came back and said he owed about $19,000 or else he would face foreclosure.
He kept calling the bank to explain he was deployed but Oliver said he bounced from one department to another until finally he contacted us at “GMA” to ask for help.
When we called Bank of America it quickly realized the error and fixed the situation with Oliver.
As you can see, JP Morgan Chase is not the only bank that mistreated the military soldiers.
The latest on SEC whistleblower's case against Chase
Written by Biloxi
Last year, I had written an article on JP Morgan Chase ex-employee Linda Almonte and her lawsuit against JP Morgan Chase. Here is a recap against of Ms. Almonte's case against Chase:
Ms. Almonte was a "mid-level executive" who "supervised employees across the litigation and post-judgment functions" of the credit card litigation department at JP Morgan Chase. Ms. Almonte no longer works for JP Morgan Chase because she was terminated from her position. In March of last year, Ms. Almonte sued the bank for wrongful termination. She has claimed that she was fired because she had refused to participate in the sale of 23,000 credit card accounts Chase had packaged for sale. Ms. Almonte claimed that 5,000 of the credit card accounts were listed the wrong amount owed and that thousands more had other problems according to her statement reported in Daily Finance.
Ms. Almonte filed a whistleblower complaint with the Securities and Exchange Commission (SEC) which adds more context and creditability to her lawsuit. In her complaint , Ms. Almonte accused the bank of illegal practices involving its credit card debt processes including robo-signing.
According to this month's court document, it looks like Ms. Almonte and JP Morgan Chase is entering a settlement:
The parties have not engaged in any settlement negotiations to date. Pursuant to the Scheduling Order, Plaintiff is to provide Defendant a written offer of settlement on or beforeMarch 7, 2011.
II.
Defendant's counsel of record is responsible for settlement negotiations.
III.
At this time, Defendant does not believe that any alternative dispute resolution procedures are appropriate.
Last month, both JP Morgan Chase and Ms. Almonte agreed to a protective order on the confidential information produced and exchanged during the litigation according to the court document. Here is the excerpt of the court document:
AGREED PROTECTIVE ORDER
On this date came on for consideration the Parties' Agreed Motion for Entry of Protective
Order and this Court, having been advised of the premises therefore, is of the opinion that the
Motion is well taken and should be granted and that the Protective Order should be entered.
Accordingly, it is hereby ORDERED that:
1. All confidential information produced or exchanged in the course of this litigation
shall be treated as confidential by the Parties and shall be used solely for the purpose of
preparation and trial of this litigation and for no other purpose or litigation whatsoever and shall
not be disclosed or made available to any person except in accordance with the terms hereof.
It is not surprising that Chase is settling with Ms. Almonte rather than to face trial. But, Ms. Almonte was smart enough to file a SEC whistleblower complaint and be a participant on the SEC whistleblower program. We will have to see whether SEC will investigate Ms. Almonte's complaint.
Last year, I had written an article on JP Morgan Chase ex-employee Linda Almonte and her lawsuit against JP Morgan Chase. Here is a recap against of Ms. Almonte's case against Chase:
Ms. Almonte was a "mid-level executive" who "supervised employees across the litigation and post-judgment functions" of the credit card litigation department at JP Morgan Chase. Ms. Almonte no longer works for JP Morgan Chase because she was terminated from her position. In March of last year, Ms. Almonte sued the bank for wrongful termination. She has claimed that she was fired because she had refused to participate in the sale of 23,000 credit card accounts Chase had packaged for sale. Ms. Almonte claimed that 5,000 of the credit card accounts were listed the wrong amount owed and that thousands more had other problems according to her statement reported in Daily Finance.
Ms. Almonte filed a whistleblower complaint with the Securities and Exchange Commission (SEC) which adds more context and creditability to her lawsuit. In her complaint , Ms. Almonte accused the bank of illegal practices involving its credit card debt processes including robo-signing.
According to this month's court document, it looks like Ms. Almonte and JP Morgan Chase is entering a settlement:
The parties have not engaged in any settlement negotiations to date. Pursuant to the Scheduling Order, Plaintiff is to provide Defendant a written offer of settlement on or beforeMarch 7, 2011.
II.
Defendant's counsel of record is responsible for settlement negotiations.
III.
At this time, Defendant does not believe that any alternative dispute resolution procedures are appropriate.
Last month, both JP Morgan Chase and Ms. Almonte agreed to a protective order on the confidential information produced and exchanged during the litigation according to the court document. Here is the excerpt of the court document:
AGREED PROTECTIVE ORDER
On this date came on for consideration the Parties' Agreed Motion for Entry of Protective
Order and this Court, having been advised of the premises therefore, is of the opinion that the
Motion is well taken and should be granted and that the Protective Order should be entered.
Accordingly, it is hereby ORDERED that:
1. All confidential information produced or exchanged in the course of this litigation
shall be treated as confidential by the Parties and shall be used solely for the purpose of
preparation and trial of this litigation and for no other purpose or litigation whatsoever and shall
not be disclosed or made available to any person except in accordance with the terms hereof.
It is not surprising that Chase is settling with Ms. Almonte rather than to face trial. But, Ms. Almonte was smart enough to file a SEC whistleblower complaint and be a participant on the SEC whistleblower program. We will have to see whether SEC will investigate Ms. Almonte's complaint.
Sunday, February 20, 2011
JPMorgan, EMC Sued by Ambac Over Securitization Losses
Ambac Assurance Corp. sued JPMorgan Chase & Co.’s EMC Mortgage and JPMorgan Securities units in New York state court, claiming it was fraudulently induced to participate in mortgage- backed securitization transactions.
The insurer is seeking to be made whole, as if it had never entered into the 2005 to 2007 transactions worth hundreds of millions of dollars, according to the complaint filed yesterday in Manhattan.
The actions covered by the lawsuit began when EMC was owned by Bear Stearns & Co. and continued after 2008, when it was bought by New York-based JPMorgan, according to the complaint.
Ambac said JPMorgan engaged in a “bad-faith strategy” and rejected Bear Stearns’s findings of loans that breached representations.
“Bear Stearns’ material misrepresentations, omissions and breaches of the parties’ agreements fundamentally altered and essentially gutted the parties’ bargain,” according to the complaint. “JPMorgan caused EMC to reject legitimate repurchase demands.”
In mid-2006, Bear Stearns induced investors to buy and Ambac to insure securities backed by a pool of mortgages that a Bear Stearns deal manager called a “sack of s--t,” according to the complaint. Bear Stearns disregarded the quality of the loans to increase the volume for securitizations, Ambac said. When the market collapse exposed the defective loans, JPMorgan took over Bear Stearns and prevented EMC from honoring its promises to disclose and repurchase defective loans, Ambac said.
Howard Opinsky, a spokesman for JPMorgan, had no immediate comment.
The case is Ambac Assurance Corp. v EMC Mortgage Corp., 650421/2011, New York state Supreme Court (Manhattan).
The insurer is seeking to be made whole, as if it had never entered into the 2005 to 2007 transactions worth hundreds of millions of dollars, according to the complaint filed yesterday in Manhattan.
The actions covered by the lawsuit began when EMC was owned by Bear Stearns & Co. and continued after 2008, when it was bought by New York-based JPMorgan, according to the complaint.
Ambac said JPMorgan engaged in a “bad-faith strategy” and rejected Bear Stearns’s findings of loans that breached representations.
“Bear Stearns’ material misrepresentations, omissions and breaches of the parties’ agreements fundamentally altered and essentially gutted the parties’ bargain,” according to the complaint. “JPMorgan caused EMC to reject legitimate repurchase demands.”
In mid-2006, Bear Stearns induced investors to buy and Ambac to insure securities backed by a pool of mortgages that a Bear Stearns deal manager called a “sack of s--t,” according to the complaint. Bear Stearns disregarded the quality of the loans to increase the volume for securitizations, Ambac said. When the market collapse exposed the defective loans, JPMorgan took over Bear Stearns and prevented EMC from honoring its promises to disclose and repurchase defective loans, Ambac said.
Howard Opinsky, a spokesman for JPMorgan, had no immediate comment.
The case is Ambac Assurance Corp. v EMC Mortgage Corp., 650421/2011, New York state Supreme Court (Manhattan).
Biloxi Buzz for Sunday
Rep. David Wu's staff confronted him over concerns about his mental health — WASHINGTON — Three days before the Nov. 2 election, U.S. Rep. David Wu's most loyal and senior staffers were so alarmed by his erratic behavior that they demanded he enter a hospital for psychiatric treatment.
Tea Party Descends on Madison Protests — Wisconsin Tea Party Activists Are Now Weighing In on the Ongoing State Worker Protests and Exploring Measures to Recall the Missing Democratic Senators — Wisconsin tea party activists are now weighing in on the ongoing state worker protests …
Kids for profit: Pa. judge guilty of racketeering in kickback case
SCRANTON, Pa. (AP) — A former juvenile court judge defiantly insisted he never accepted money for sending large numbers of children to detention centers even after he was convicted of racketeering for taking a $1 million kickback from the builder of the for-profit lockups.
Former Luzerne County Judge Mark Ciavarella was allowed to remain free pending sentencing following his conviction Friday in what prosecutors said was a "kids for cash" scheme that ranks among the biggest courtroom frauds in U.S. history.
Ciavarella, 61, left the bench in disgrace two years ago after he and a second judge, Michael Conahan, were accused of using juvenile delinquents as pawns in a plot to get rich. The Pennsylvania Supreme Court has dismissed 4,000 juvenile convictions issued by Ciavarella, saying he sentenced young offenders without regard for their constitutional rights.
Ciavarella maintained the payments were legal and denied that he incarcerated youths for money.
"Never took a dime to send a kid anywhere. ... Never happened. Never, ever happened. This case was about extortions and kickbacks, not about 'kids for cash,'" said Ciavarella, who plans to appeal.
Federal prosecutors accused Ciavarella and Conahan of taking more than $2 million in bribes from the builder of the PA Child Care and Western PA Child Care detention centers and extorting hundreds of thousands of dollars from the facilities' co-owner.
Read on.
Former Luzerne County Judge Mark Ciavarella was allowed to remain free pending sentencing following his conviction Friday in what prosecutors said was a "kids for cash" scheme that ranks among the biggest courtroom frauds in U.S. history.
Ciavarella, 61, left the bench in disgrace two years ago after he and a second judge, Michael Conahan, were accused of using juvenile delinquents as pawns in a plot to get rich. The Pennsylvania Supreme Court has dismissed 4,000 juvenile convictions issued by Ciavarella, saying he sentenced young offenders without regard for their constitutional rights.
Ciavarella maintained the payments were legal and denied that he incarcerated youths for money.
"Never took a dime to send a kid anywhere. ... Never happened. Never, ever happened. This case was about extortions and kickbacks, not about 'kids for cash,'" said Ciavarella, who plans to appeal.
Federal prosecutors accused Ciavarella and Conahan of taking more than $2 million in bribes from the builder of the PA Child Care and Western PA Child Care detention centers and extorting hundreds of thousands of dollars from the facilities' co-owner.
Read on.
JP Morgan Chase, Bank of America and Citigroup Might Limit Debit Card Purchases
Some of the nation's largest banks are considering a cap on all debit card transactions. Big banks including JP Morgan Chase, Bank of America and Citigroup might limit each debit card purchase to $50 or $100 if Congress approves new rules aimed at limiting swipe fees, industry sources said Friday.
"I'm hearing the same things that everybody else is hearing" including a possible transaction cap, said Peter Garuccio, a spokesman for the American Bankers Association. "The bottom line is this forces a minimum 70 percent reduction in revenue. Some of our members don't believe they'll be able to manage that."
Such a cap could change how millions of Americans shop. Since the average family spends $122 a week on food, according to the U.S. Department of Labor, a trip to the grocery store could put many consumers over the limit and they'd have to find another way to pay.
“What's the alternative? Start writing checks again? Going to the ATM to get cash?" asked Gerri Detweiler, Credit.com's credit card expert. "It's not practical to say people are going to start using their credit cards because a lot of people don't have credit cards, or they are close to their limits."
Bank insiders confirmed that these institutions are considering such a cap, but they declined to speak on the record. The Durbin amendment, which Congress passed last year, required the Federal Reserve to create new rules limiting debit swipe fees, known in the industry as "interchange" fees, which retailers complain have risen steeply in recent years.
Read on.
"I'm hearing the same things that everybody else is hearing" including a possible transaction cap, said Peter Garuccio, a spokesman for the American Bankers Association. "The bottom line is this forces a minimum 70 percent reduction in revenue. Some of our members don't believe they'll be able to manage that."
Such a cap could change how millions of Americans shop. Since the average family spends $122 a week on food, according to the U.S. Department of Labor, a trip to the grocery store could put many consumers over the limit and they'd have to find another way to pay.
“What's the alternative? Start writing checks again? Going to the ATM to get cash?" asked Gerri Detweiler, Credit.com's credit card expert. "It's not practical to say people are going to start using their credit cards because a lot of people don't have credit cards, or they are close to their limits."
Bank insiders confirmed that these institutions are considering such a cap, but they declined to speak on the record. The Durbin amendment, which Congress passed last year, required the Federal Reserve to create new rules limiting debit swipe fees, known in the industry as "interchange" fees, which retailers complain have risen steeply in recent years.
Read on.
Free manuretv: Sunday's bobblehead show
Here are the line-ups for the Sunday talk shows this weekend:
• ABC, This Week: Secretary of State Hillary Clinton.
• CBS, Face The Nation: Rep. Paul Ryan (R-WI), Rep. Chris Van Hollen (D-MD).
• CNN, State Of The Union: Former Secretary of Defense Donald Rumsfeld.
• Fox News Sunday: Gov. Scott Walker (R-WI), Sen. Tom Coburn (R-OK), Sen. Claire McCaskill (D-MO).
• NBC, Meet The Press: Senate Majority Whip Dick Durbin (D-IL), Sen. Lindsey Graham (R-SC), Ambassador to the United Nations Susan Rice.
• ABC, This Week: Secretary of State Hillary Clinton.
• CBS, Face The Nation: Rep. Paul Ryan (R-WI), Rep. Chris Van Hollen (D-MD).
• CNN, State Of The Union: Former Secretary of Defense Donald Rumsfeld.
• Fox News Sunday: Gov. Scott Walker (R-WI), Sen. Tom Coburn (R-OK), Sen. Claire McCaskill (D-MO).
• NBC, Meet The Press: Senate Majority Whip Dick Durbin (D-IL), Sen. Lindsey Graham (R-SC), Ambassador to the United Nations Susan Rice.
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