WASHINGTON – New York Attorney General Eric T. Schneiderman, U.S. Attorney General Eric H. Holder, Housing and Urban Development (HUD) Secretary Shaun Donovan, and Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami today detailed the core mission of the new Residential Mortgage-Backed Securities Working Group announced by President Obama in the State of the Union address. This collaboration brings together the Department of Justice (DOJ), several state law enforcement officials – led by Attorney General Schneiderman – and other federal entities to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. It builds upon ongoing state and federal investigations, while also launching new ones.
The goals of this joint investigation will be to:
Hold accountable any institutions that violated the law;
Compensate victims and help provide relief for homeowners struggling from the collapse of the housing market, caused in part by this wrongdoing; and
To help us finally turn the page on this destructive period in our nation’s history.
“I would like to thank President Obama and Attorney General Holder for launching this comprehensive investigation, and I look forward to co-chairing this effort that marshals state and federal resources to bring justice for the victims of the misconduct that caused the mortgage crisis,” said Attorney General Schneiderman. “In coordination with our federal partners, our office will continue its steadfast commitment to holding those responsible for the mortgage crisis accountable, providing meaningful relief for homeowners commensurate with the scale of the misconduct, and getting our economy moving again. The American people deserve nothing less than a thorough investigation into the global financial meltdown to ensure nothing like it ever happens again, and this effort is a major step in the right direction.”
Attorney General Schneiderman and Attorney General Holder announced that the new working group will include 55 Department of Justice attorneys, analysts, agents and investigators. As it begins its work, 15 attorneys – civil and criminal – and 10 FBI agents and analysts will be initially assigned to the working group. An additional 30 attorneys, investigators and other staff from U.S. Attorney’s Offices around the country will join the working group’s efforts, in addition to existing state and federal investigations into similar misconduct under those authorities.
“This Working Group brings together federal and state partners to strengthen current and future efforts to investigate and prosecute instances of wrongdoing in the residential mortgage-backed securities market,” said Attorney General Holder. “With this focus on collaboration – and by bringing our government’s full enforcement resources to bear – I have no doubt that we will improve our ability to recover losses, to prevent fraud, to bring abuses to light, and to hold those who violate the law accountable: That’s what the challenge before us demands, and that’s what the American people deserve.”
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Like millions of stories from the great recession, this one begins with homeowners struggling to keep up with a mortgage payment they simply couldn’t afford.
By 2009, the adjustable interest rate for Cassandra and Bernard Gray’s Durham, N.C., home loan had spiked to more than 12 percent. “I didn’t know if we were going to be on the street or in a shelter,” Cassandra recalls. “We couldn’t afford groceries. It got pretty bad.”
They were thrilled to sign up for a modification plan with their loan servicer, GMAC Home Mortgage, Cassandra Gray said…
The new federal task force led by New York Attorney General Eric Schneiderman sent subpoenas to the 11 largest financial institutions in the past few days as part of its investigation in possible residential mortgage-backed securities fraud.
President Obama formed the task group and announced it in his State of the Union address Tuesday.
Schneiderman said in a press conference Friday that he will be joined by Delaware AG Beau Biden, Massachusetts AG Martha Coakley and Nevada AG Catherin Cortez Masto, California AG Kamala Harris and Illinois AG Lisa Madigan.
The Obama administration, state attorneys general, and the nation’s largest banks are close to a final settlement on the years-long struggle over allegations of massive foreclosure fraud, according to several sources familiar with the talks. The final details of the arrangement, according to the source who revealed them, will apparently not preclude prosecutors and regulators from taking legal action against many of the common abuses during the house bubble. It remains to be seen whether all parties will ultimately sign off on the language.
The settlement is worth $25 billion, a sum which will be distributed to homeowners who were wrongfully foreclosed on as well as those who remain underwater. In addition, banks could still face future legal action over 12 specific violations.
According to someone intimate with the negotiations, there will be no legal release of the banks with respect to:
Criminal liability.
Tax liability
Fair lending, fair housing, or any other civil rights claim.
Federal Housing Finance Agency or the GSEs [Fannie Mae and Freddie Mac]
CFPB claims for the period after they came into existence in July 2011
Linette Lopez over at Business Insider did a great job documenting AG Schneiderman’s past and why he might stick to his commitment of seeking accountability after all.
The man he picked to co-chair that task force is New York’s Attorney General, Eric Schneiderman. It’s not a surprising choice. Schneiderman been aggressive in investigating banks for mortgage fraud in New York, and has taken a leadership role in mortgage fraud settlement negotiations between banks and state AGs around the country.
The investigators will consider a variety of cases, including false statements, mail and wire fraud, and failure to comply with the Financial Institutions Reform, Recovery and Enforcement Act of 1989, established in the wake of the savings and loan crisis. This law empowers investigators to examine wrongdoings going back a decade. Many other mortgage-related laws have statutes of limitations for less than half as long.
Already the new unit has 15 attorneys and 10 investigators, including FBI agents. Once fully staffed, it will employ roughly 55 people, in addition to the five co-chairs, and include a mix of new hires and existing personnel from participating agencies, including the Treasury Department, Consumer Financial Protection Bureau, Internal Revenue Service, Department of Housing and Urban Development and Federal Housing Administration as well as the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. A “significant portion” of the unit will be based in Washington, D.C., though officials anticipate expanding to “at least three or four U.S. attorney offices,” as the cases unfold, said a Justice Department official.
Floridians know she’s inadequate for her position because she hasn’t even investigated foreclosure fraud.
Palm Beach Post-
Florida Attorney General Pam Bondi stood by the 50-state attorneys general settlement with the nation’s biggest banks on Thursday as California and Delaware formally rejected the proposal she helped negotiate.
Bondi said Floridians can’t wait for foreclosure relief and that the draft proposal sent to states on Monday addresses California’s concerns.
“The settlement under discussion contains all the elements California purports to be looking for; transparency, substantial relief for distressed homeowners, and strict enforcement,” Bondi said Thursday. “Florida’s homeowners need relief now, and protracted and uncertain litigation would be contrary to their best interests.”
A former general counsel for a Teamsters union has been accused of collecting $211,000 by submitting false expense reports for bogus CLE classes, law books never purchased and shipping at a UPS store that doesn’t exist.
ABA Journal-
Federal prosecutors in Manhattan announced the indictment of Amherst, N.Y., lawyer Kevin Clor on Wednesday, report the Buffalo News, the Associated Press, the New York Post and Thomson Reuters News & Insight. Clor, 40, currently works at the mortgage law firm of Steven J. Baum, according to Thomson Reuters. The law firm is closing after it was barred from doing work for Fannie Mae and Freddie Mac.
Bank of America Corp. is impeding an investigation of its loan modification practices by negotiating settlements with borrowers who must agree to keep them secret and not criticize the bank in exchange for cash payments and loan relief, Arizona officials say.
The Arizona Attorney General’s office is asking a court to block those aspects of the settlements and require the bank to turn over all the agreements. The bank denies any wrongdoing.
One 2011 accord involving a borrower facing foreclosure who defaulted on a $253,142 mortgage included a $5,000 payment, plus $7,500 for legal fees, and the defaulted payments were waived and the loan was modified to a 40-year term with a 2 percent interest rate, court documents show. The terms of the original loan and the borrower’s complaint about the lender weren’t described in the documents.
Lawyers for the IndyMac executives say the FDIC is required by law to retain all the records of a failed bank it takes over for six years.
WSJ-
A pair of former IndyMac executives being sued by the Federal Deposit Insurance Corp. are accusing the bank regulator of a “stunning display of incompetence” for failing to preserve some evidence when it took over receivership of the failed bank.
Lawyers for onetime midlevel IndyMac executives Kenneth Shellem and Richard Koon say the FDIC failed to collect and preserve documents and emails after taking receivership of IndyMac following the bank’s 2008 collapse, leaving the pair handicapped in mounting their defense.
If the AG’s think they can settle the greatest theft in history, let them read this story…it’s not only people who are in default.
HuffPO-
In July 2009, Roy and Sheila Bowers refinanced the mortgage on their suburban ranch home in Topeka, Kansas. The couple wanted to take advantage of the low interest rates that were all the rage at the time.
Roy, a truck driver, and Sheila, a former hotel housekeeping supervisor, knew their new loan from Wells Fargo would enable them to save $198.86 a month – a nice chunk to help with gas and groceries.
But what the Bowers never imagined was that their old loan, the one Wells Fargo told them was paid off, would resurrect itself, trashing their credit report, scotching their son’s student loans and throwing the whole family into foreclosure. All, they say, even though they didn’t miss a single mortgage payment.
I personally feel this is a game being played…and sure many of you think so too.
They are only trying to force place the settlement and give in. If I knew my company committed crimes, I would keep my mouth shut and not say a damn word!
REUTERS-
JPMorgan Chase & Co (JPM.N) Chief Executive Jamie Dimon said President Barack Obama’s decision to expand investigations into home lending and sales of mortgage securities could stop settlement talks with the states over foreclosure practices.
“It has a pretty good chance of derailing it,” Dimon said in a televised interview with CNBC from Davos, Switzerland on Thursday.
Obama, in his State of the Union address Tuesday, said he has asked his attorney general to create a special unit of prosecutors to expand investigations into home lending and packaging of mortgage-backed securities. It is not clear how the new unit will be different from earlier investigations.
They’re all connected to Wall Street and against us.
Go ahead and vote for this winner who was cashing in on you getting booted out your home!
ThinkProgress-
A ThinkProgress examination of Mitt Romney’s presidential personal financial disclosuresfrom May 2011 reveal that the former Massachusetts governor and his wife own or owned millions of dollars worth of a Goldman Sachs investment fund invested heavily in mortgage-backed obligations. And the current owners of those mortgage debts began foreclosure proceedings against thousands of Floridians.
Along with his investments in Bain Capital funds linked to offshore tax havens, the Romneys have large investments in the Goldman Sachs Strategic Income Fund (institutional class). The firm’s March 2011 annual report for the fund notes that about 8 percent of the fund is invested in banks and 24.5 percent is invested in mortgage-backed obligations. Romney’s form says he has invested between $1,000,001 and $5,000,000 in the fund and his wife Ann has invested an additional $1 million-plus. Since the 2008 economic meltdown and the enactment of the Troubled Asset Relief Fund, this fund has done quite well, growing 7.88 percent between April 2010 and March 2011.
Oh my, look what we have here…big mistake because I don’t think this is going very far….his franchises that is.
Bill Warner Private Investigator-
My source in Fort Lauderdale tells me that attorney David J. Stern has rolled over his $Millions in foreclosure home profits and the cash he got up front from the DJSP Entreprises Inc. FKA Chardan 2008 China Acquisition Corp deal into at least 150 Five Guys Burger and Fries Franchise’s, will that be fries with your meal sir?
It appears that David J. Stern is buying ”Five Guys Burger and Fries Franchise’s” in bulk, Stern is trying to acquire 500 Burger Joints NATIONWIDE…
Delaware Attorney General Beau Biden and real estate analyst Jack McCabe talks foreclosures and debt as The DR Show’s “30 Million Jobs Tour” continues in Florida.
UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS CENTRAL DIVISION
In re:
JAMES E ALGER, JR. and
DEBORAH J ALGER
Debtors
JAMES E. ALGER, JR. and DEBORAH J. ALGER, Plaintiffs,
v.
COUNTRYWIDE HOME LOANS, INC., MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., and BANK OF NEW YORK MELLON, F/K/A THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC., ALTERNATIVE LOAN TRUST 2006-11CB MORTGAGE PASS-THROUGH CERTIFICATES, 11CB, Defendants.
Excerpt:
Each acknowledgment form that the Algers signed contained the following language: “The undersigned each acknowledge receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” It is unclear whether the Algers acknowledged that each of them received two copies for a total of four or whether they each acknowledged receipt of two copies in total. In analyzing the identical acknowledgment language in In re Cromwell, Judge Hillman, too, found the language ambiguous:
The placement of the word “each” before “acknowledge” renders the phrase susceptible to two meanings. First, that the Debtors acknowledged each receiving two copies as the Defendants[] assert, or second, that they each acknowledged receipt of a total of two copies as the Debtors suggest. While I understand that Countrywide intended the former as that is what the law required, the average consumer would not have necessarily known that. 2011 WL 4498875, at *17. The existence of this ambiguity neutralizes any presumption created by the acknowledgment in favor of delivery of the requisite number of Notices. See id. (resolving the ambiguity “against the drafter of the Acknowledgment such that it did not create a presumption of adequate delivery of a total of four copies”).
In the absence of a presumption of adequate delivery, the burden shifts to the defendants to prove that the Algers each received two copies of the Notice for a total of four for the couple. See id. While the defendants rely on the deposition testimony of Ms. Manugian as evidence of her general practice during closings to establish that the Algers received four copies, the Algers have attested through their affidavits that the first time their loan file was opened after the closing it contained a total of three Notices. The question of how many copies of the Notice the Algers received remains a genuine and material fact in dispute. The defendants’ motion for summary judgment is therefore DENIED.
If this deal doesn’t suffice for you, imagine what the people who are damaged think about this?
Bloomberg-
A proposed multistate settlement with Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and three other U.S. mortgage servicers to resolve probes of foreclosure practices is “inadequate for California,” state Attorney General Kamala Harris’s office said.
“Our state been clear about what any multistate settlement must contain: transparency, relief going to the most distressed homeowners, and meaningful enforcement that ensures accountability,” Preston said in the statement. “At this point, this deal does not suffice for California.”
If the president thought his mortgage investigation announcement would be an easy sell to progressive critics, he was only half right at best. The announcement — especially the appointment of New York Attorney General Eric Schneiderman — did win praise from a number of liberal groups.
Smith’s subheader says Schneiderman “joins Federal Committee that looks designed to undermine AGs against mortgage settlement deal.” Dayen’s reads, “Financial fraud unit appears designed to fail and grease skids for foreclosure fraud settlement.” Field’s says that “Breuer and Khuzami (two other unit leaders) have to go and indictments have to be immediate.”
In fact, there was a big meeting on Monday in Chicago to try to seal the deal. It included Secretary of Housing and Urban Development, Shaun Donovan, Associate U.S. Attorney General. Thomas Perelli, and several Democratic AG’s, including the lead negotiator, Iowa Attorney General Tom Miller.
Lawsuit: ‘Profits Were Running the Show’ at Leading Credit Ratings Agency
Illinois Attorney General-
Attorney General Lisa Madigan today filed a lawsuit against Standard & Poor’s for its fraudulent role in assigning its highest ratings to risky mortgage-backed investments in the years leading up to the housing market crash.
Madigan filed her lawsuit today in Cook County Circuit Court, alleging that Standard & Poor’s, or S&P, compromised its independence as a ratings agency by doling out high ratings to unworthy, risky investments as a corporate strategy to increase its revenue and market share. The Attorney General’s lawsuit alleges that S&P ignored the increasing risks posed by mortgage-backed securities, instead giving the investment pools ratings that were favorable to its investment bank client base and S&P’s profits.
“Publically, S&P took every opportunity to proclaim their analyses and ratings as independent, objective and free from its desire for revenue,” Madigan said. “Yet privately, S&P abandoned its principles and instead used every trick possible to give deals high ratings in order to retain clients and generate revenue. The mortgage-backed securities that helped our market soar – and ultimately crash – could not have been purchased by most investors without S&P’s seal of approval.”
The Attorney General’s lawsuit cites numerous internal emails and conversations among S&P employees in the run up to the housing market’s crash that demonstrate the company misrepresented its ratings as objective and independent. In one such exchange, in April 2007, an online conversation via a company-based instant messenger application revealed employees discussing S&P ratings compared to the reality of risk involved, with an employee stating an investment “could be structured by cows and we would rate it.”
Ingham County, Michigan Curtis Hertel Jr. is seeking re-election and he needs your vote. This is a great way to show your gratitude for all he’s done for you Michiganders.
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