Reuters-

Goldman Sachs Group Inc agreed to pay about $12 million to settle charges that it violated “pay-to-play” rules in a case involving undisclosed campaign contributions to a former Massachusetts state treasurer who was a candidate for governor in the state, U.S. securities regulators said on Thursday.

A former vice president in Goldman’s Boston office, Neil Morrison, worked on the campaign of Timothy Cahill around the same time that he was also soliciting underwriting business from the Massachusetts treasurer’s office, the Securities and Exchange Commission said.

[REUTERS]

[ipaper docId=107175616 access_key=key-2cn93z9737k088hlrvbn height=600 width=600 /]

Current-

Sheila Bair, former chairwoman of the Federal Deposit Insurance Corporation (FDIC), talks to “Viewpoint” host Eliot Spitzer about why the financial collapse happened and whether the government should have done more. Bair has written a new book about her experiences during the financial crisis, “Bull by the Horns.”

[CURRENT]

Reuters-

A federal judge has again dismissed a lawsuit accusing Freddie Mac of misleading shareholders by understating its subprime mortgage exposure and overstating its capital strength ahead of the 2008 financial crisis.

U.S. District Judge John Keenan in Manhattan said the allegations made in an amended lawsuit failed to show that Freddie Mac officials, including former Chief Executive Richard Syron, intended to mislead shareholders, or withheld significant information from them.

He also said Freddie Mac had made a “bevy of truthful disclosures” about its credit and risk exposures during the period covered by the lawsuit, including over loans it guaranteed and its activities in nontraditional markets.

[REUTERS]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Seeking Alpha-

Bill Cohan declares, today, that the money JPMorgan (JPM) lost in its infamous “London Whale” trades actually belonged to depositors. He’s wrong about that.

Here’s Cohan’s argument:

To my mind, the money that Iksil lost was depositors’ money. Iksil worked for the CIO, where depositors’ money is invested until it is lent out. The trade lost almost $6 billion in cash, which we know is real because hedge funds such as Saba Capital, run by wunderkind Boaz Weinstein, and Blue Mountain Capital staked out the other side of Iksil’s trade and made a fortune. How could there be any confusion that the money Iksil lost came from the bank’s depositors?

This is just silly. If you deposit money at a bank, you’re lending that money to the bank. Bank deposits count as liabilities on the bank’s balance sheet: they’re money that the bank owes to its depositors. And like all other debt, bank deposits are a contractual arrangement: the bank borrows your money — and agrees to repay it — on certain terms. Often, those terms include an effective call option: the depositor can ask for her money back at any time.

[SEEKING ALPHA]

image: e-how

HUFFPO-

Libor is a joke.

Don’t get me wrong, the London Interbank Offered Rate, or Libor, is deadly serious business, affecting $350 trillion in derivatives contracts and all sorts of borrowing costs around the world. Your adjustable-rate mortgage or corporate loan is probably based on Libor. A big deal, then.

But it has long been a hilarious joke to traders, as some new instant message transcripts dug up by Bloomberg show. The transcripts, which are evidence in a wrongful-termination suit by a former Royal Bank of Scotland trader, show RBS traders breezily chatting back and forth about how much fun they’re having jerking around this important interest rate.

[HUFFINGTONPOST]

animated-gifs.org

I guess it takes the lawn to be about 4 feet tall in order to get paid to probably do something you’re already getting paid to have done.

Make any sense? Normal folks would have been fired if the lawn wasn’t done 3-4 months ago. This looks about that time frame.

ABC Action News-

“It’s terrible,” Becky Amendola said Monday.

The overgrown property next door had her and her husband Bill at their wits’ end.

“Today, I feel like hugging everybody.  Yesterday, I was disgusted.  Today, I’m elated,” smiled Becky.

As the roar of a lawnmower echoed from next door, and a weed eater ran on high, Becky took it all in.

“It’s music to my ears, to see that it’s finally getting done,” explained Becky.

Our story on Monday showed how the foreclosed property next door to the Amendola home had grown into its own habitat.

After we aired the couple’s complaints, Lender Processing Services sent a crew that quickly got to work.

[ABC ACTION NEWS]

Reuters-

The unveiling Wednesday of the details of a new rule making New York the first state to require aspiring lawyers to perform free legal work in order to be admitted to the bar has quieted concerns of law school administrators that it would be costly to implement.

The regulation, first proposed by Chief Judge Jonathan Lippman in May, requires law students to perform 50 hours of pro bono work between their first year of law school and the time they apply for a license.

Over the summer, officials from law schools across the country had worried that if existing programs like clinics and internships did not qualify, schools would be forced to hastily implement new ones, taxing limited resources.

But under the new rule, pro bono service is defined as providing “law-related” services to low-income people, non-profit organizations, civil rights groups or any government entity and allows such clinics to count toward the requirement, even though students typically receive academic credit for those programs.

“It’s much better than it could have been,” said the dean of Cornell Law School, Stewart Schwab.

[REUTERS]

LA TIMES-

Gov. Jerry Brown has completed work on a package of foreclosure-prevention bills aimed at preventing another massive real estate bust like the one that plunged California and the nation into a deep recession five years ago.

The governor on Tuesday signed into law SB 1474 by Sen. Loni Hancock (D-Berkeley), giving the attorney general authority to impanel a statewide grand jury to investigate and issue indictments for alleged financial crimes, including mortgage fraud.

Also signed Tuesday were Assembly Bill 1950 by Assemblyman Mike Davis (D-Los Angeles), which extends from one to three years the legal statute of limitations for prosecuting mortgage-related crimes, and AB 2610 by Assemblywoman Nancy Skinner (D-Berkeley), which provides guarantees to renters that they can stay longer in foreclosed properties purchased by new owners.

[LA TIMES]

Cadwalader, Wickersham & Taft LLP, a leading counselor to global financial institutions and corporations was/is also MERS’ special counsel. (see image below)

On August 1, 2011 the Wall Street Journal reported that President Obama has nominated Michael Horowitz, a partner at Cadwalader, Wickersham, & Taft LLP, to be the Justice Department’s top watchdog.

And most recent this year, the U.S. Senate Confirmed Michael E. Horowitz a Cadwalader Attorney for Department of Justice Position from the PRNewsWire article:

Cadwalader, Wickersham & Taft LLP, a leading counselor to global financial institutions and corporations, welcomes  the U.S. Senate’s confirmation of Michael E. Horowitz, a partner in the Business Fraud and Complex Litigation Group and a former member of the Firm’s management committee, as Inspector General of the Department of Justice.  President Barack Obama nominated Horowitz for the position in July 2011.

“We congratulate Michael on his appointment as Inspector General,” said Christopher White, Chairman of the Firm. “Michael has been an outstanding partner in every respect and we are proud that he will once again apply his substantial talents in service of the public good.”

Before joining Cadwalader, Horowitz held senior positions in the DOJ’s Criminal Division during the Clinton and George W. Bush Administrations, first as Deputy Assistant Attorney General and then as Chief of Staff to the head of the Criminal Division. 

United States Attorney General Eric Holder recently remarked: “I’m confident … Michael will provide strong leadership to the department, and will play an instrumental role in fulfilling our critical mission of protecting the American people.  … Michael will promote integrity, financial austerity and effectiveness in Department of Justice operations.”  

Related: EXCLUSIVE: Eric Holder, Covington & Burling and MERSCORP

American Banker-

Assistant Attorney General Thomas Perez cut an inappropriate deal with city officials in Saint Paul, Minn., in order to convince them to drop an appeal that the Supreme Court was scheduled to hear and that might have benefited banks, according to top GOP lawmakers.

In a letter Monday, GOP Rep. Patrick McHenry and three Republican colleagues alleged that Perez, who heads the Justice Department’s Civil Rights Division, essentially bought off the city with a quid pro quo.

[AMERICAN BANKER]

KXLH-

Donna Peterson of Helena is still fighting to keep her home, despite motions by Bank of America to place her into foreclosure.

Peterson was in District Court last week hearing arguments about why her court case should be dismissed.

Bank of America filed a motion claiming that the verbal agreements were a modified loan that didn’t have paper to back it up.

Peterson filed the case after she was told she could refinance at a lower rate but the verbal contract was later unkept.

Peterson said, “Yes, I am still living in my home. I plan to intend to keep my home. The bank promised me a 2% loan and I’ve been fighting for over three years now to hold them to that promise. And I intend to continue that fight.”

Peterson’s attorney Jon Motl claims that under California case law, the b is in breach of contract for non-traditional money lending practices.

[KXLH]

Executive Summary

When consumers purchase their credit scores from one of the major nationwide consumer reporting agencies (CRAs), they often receive scores that are not generated by the scoring models use to generate scores sold to lenders. The Dodd-Frank Wall Street Reform and Consumer Protection Act directed the Consumer Financial Protection Bureau (CFPB) to compare credit scores sold to creditors and those sold to consumers by nationwide CRAs and determine whether differences between those scores disadvantage consumers. CFPB analyzed credit scores from 200,000 credit files from each of the three major nationwide CRAs: TransUnion, Equifax, and Experian. The study yielded the following results:

• The CFPB found that for a majority of consumers the scores produced by different scoring models provided similar information about the relative creditworthiness of the consumers. That is, if a consumer had a good score from one scoring model the consumer likely had a good score on another model. For a substantial minority, however, different scoring models gave meaningfully different results.

• Correlations across the results of scoring models were high, generally over .90 (out of a possible one). Correlations were stronger among the models for consumers with scores below the median than for consumers with scores above the median.

• To determine if score variations would lead to meaningful differences between the consumers’ and lenders’ assessment of credit quality, the study divided scores into four credit-quality categories. The study found that different scoring models would place consumers in the same credit-quality category 73-80% of the time. Different scoring models would place consumers in credit-quality categories that are off by one category 19-24% of the time. And from 1% to 3% of consumers would be placed in categories that were two or more categories apart.

• The study looked at results within several demographic subgroups. Different scores did not appear to treat different groups of consumers systematically differently than other scoring models. The study found less variation among scores for younger consumers and consumers who live in lower-income or high-minority population ZIP codes than for older consumers or consumers in higher-income or lower-minority population ZIP codes. This is likely driven by differences in the median scores of these different categories of consumers.

• Consumers cannot know ahead of time whether the scores they purchase will closely track or vary moderately or significantly from a score sold to creditors. Thus, consumers should not rely on credit scores they purchase exclusively as a guide to how creditors will view their credit quality.

• Firms that sell scores to consumers should make consumers aware that the scores consumers purchase could vary, sometimes substantially, from the scores used by creditors.

[…]

Reuters-

U.S. Senior District Judge Jed Rakoff of Manhattan made Assured Guaranty wait a long time for the opinion explaining his ruling back in February that denied the MBS issuer Flagstar summary judgment on its interpretation of what constitutes a breach of the representations and warranties on mortgages underlying the securities Assured insured. But for Assured and its counsel at Susman Godfrey, the 24-page opinion Rakoff finally issued Tuesday was worth the wait, and then some. Rakoff not only offered a simple definition of a material adverse effect that should help everyone with MBS put-back claims but also wiped out several other potential Flagstar defenses to Assured’s claims. With a bench trial in the case only a couple of weeks away, Flagstar has to be wondering if it’s time to talk settlement.

[REUTERS ON THE CASE]

[ipaper docId=106979299 access_key=key-1evdlwxn4wf8aqgtc7p1 height=600 width=600 /]

It’s no secret MERS is setting up to go well beyond assignments, affidavits etc and begin housing e-NOTES as well as your digital signature. LOL…what a mess.

Boston Business Journal-

Seeking to have the remaining civil charges against them dismissed, five large national mortgage lenders and the Mortgage Electronic Registration System confronted state prosecutors in Suffolk Superior Court in Boston on Monday afternoon.

Prosecutors during a hearing argued that lenders Wells Fargo, Bank of America, JP Morgan Chase, Citibank and GMAC Mortgage, as well as MERS, should face state civil charges that they initiated foreclosures without actually holding the mortgages in question and that they corrupted land records by using MERS. Those charges were originally brought by state Attorney General Martha Coakley last December.

[BOSTON BUSINESS REVIEW]

(CBS5) –

We now have the video showing a woman getting tased as Maricopa County sheriff’s deputies try and evict her from her home.

Lilly Washington has been fighting her foreclosure and was appealing the amount the court ordered her to pay to stay in the home, but in the meantime she wasn’t paying anything. So MCSO deputies went to evict her from her Phoenix home, but she wouldn’t leave without a fight.

The video is hard to watch – Washington, from Romania, the mother of a soldier overseas, getting tased during her eviction.

[CBS5]

Reuters-

A nonprofit group on Tuesday accused Bank of America Corp of maintaining and marketing foreclosed homes in white neighborhoods much better than those it owns in African-American and Latino neighborhoods.

The National Fair Housing Alliance and its member organizations said they filed a discrimination complaint with the U.S. Department of Housing and Urban Development. It lodged similar complaints in April against Wells Fargo & Co and U.S. Bancorp.

The group reviewed 373 properties owned, managed or serviced by Bank of America in eight U.S. cities as part of its ongoing examination of how U.S. lenders maintain bank-owned properties. Investigators evaluated properties for problems such as broken windows, overgrown lawns, trash accumulation and a lack of “for sale” signs.

“We have found significant racial disparities,” Shanna Smith, chief executive officer of the National Fair Housing Alliance in a conference call with reporters.

[REUTERS]

Courtesy of The Big Picture–

SUPREME COURT OF THE STATE OF NEW YORK

MBIA Insurance Corporation,

v

Countrywide Home Loans, Inc., et al.,

[ipaper docId=106564648 access_key=key-dmz9mn36qh64eapsdn0 height=600 width=600 /]

More bailouts for the banks courtesy of you.

(FOX19) –

It was barely covered by national media but a major event took place late last week. One that will have a massive effect on the money in your wallet.  Your ability to by goods and services and ultimately your future.

HuffPO-

Former bank regulator Sheila Bair cringed when President Barack Obama promised at an Arizona high school gymnasium in 2009 that his administration could save millions of homes from foreclosure.

“If lenders and home buyers work together, and the lender agrees to offer rates that the borrower can afford, then we’ll make up part of the gap between what the old payments were and what the new payments will be,” Obama said, explaining the program with Bair at his side. “And this will enable as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure.”

In her new book, “Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself,” Bair recounts how her own housing proposals were passed over in favor of a much weaker program, which she knew would never save 4 million homes. Bair served as chairwoman of the Federal Deposit Insurance Corporation until July 2011.

[HUFFINGTON POST]

SWAN LANDING DEVELOPMENT, LLC, REZA YAZDANI, ITI CONSTRUCTION, LLC, LEONARD S. ENGLANDER, and JOHN W. WAECHTER, Appellants,
v.
FIRST TENNESSEE BANK NATIONAL ASSOCIATION f/k/a FIRST HORIZON HOME LOAN CORPORATION, Appellee.

Leonard S. Englander and Courtney L. Fish of Englander and Fischer, LLP, St. Petersburg, for Appellants Leonard S. Englander and John W. Waechter.

Marion Hale and Sharon E. Krick of Johnson, Pope, Bokor, Ruppel & Burns, LLP, Clearwater, for Appellee.

CRENSHAW, Judge.

Swan Landing Development, LLC, Reza Yazdani, iTi Construction, LLC, (collectively referred to as Swan Landing) and their attorneys, Leonard S. Englander and John W. Waechter, appeal a final judgment imposing sanctions and awarding attorney’s fees to First Tennessee Bank, National Association (the Bank) under section 57.105, Florida Statutes (2010). In awarding the fees, the trial court concluded that there was no basis to support Swan Landing’s postjudgment motion filed under Florida Rule of Civil Procedure 1.540(b), and it found that the Bank was entitled to recover a total of $9356.25 from Swan Landing and $9356.25 from the attorneys. Because we conclude that the trial court abused its discretion in granting the Bank’s motion for sanctions under section 57.105, we reverse.

Following a final judgment of mortgage foreclosure entered against Swan Landing in favor of the Bank, Swan Landing received an audit inquiry letter confirming that they owed the Bank a balance of $357,164. This letter prompted Swan Landing’s attorneys to investigate whether the Bank had misrepresented at trial that it had given a $357,164 concession to Swan Landing for refinancing.^[1] Swan Landing sought to depose the Bank’s auditor to explain the audit inquiry letter. And because the audit inquiry letter appeared to contradict a material issue contested below, Swan Landing filed a motion to set aside the foreclosure judgment under rule 1.540(b). Noting that Swan Landing’s 1.540(b) motions “allege grounds which, if proven to exist, may constitute a basis for relief under the rule,” the trial court ordered the Bank to respond. The trial court thereafter entered an order summarily denying Swan Landing’s 1.540(b) motion. Following the summary denial of the motion, the trial court granted, without an evidentiary hearing, the Bank’s motion for sanctions and attorney’s fees under section 57.105.

A trial court’s ruling on a motion for fees based on section 57.105 is reviewed by this court for an abuse of discretion. See generally Bowen v. Brewer, 936 So. 2d 757, 763 (Fla. 2d DCA 2006). Section 57.105(1) provides for the award of attorney’s fees in any action:

[I]n which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:

(a) Was not supported by the material facts necessary to establish the claim or defense; or

(b) Would not be supported by the application of then-existing law to those material facts.

“A finding that a party is entitled to recover attorney’s fees under section 57.105 must be based upon substantial, competent evidence presented at the hearing on attorney’s fees or otherwise before the court and in the record.” Mason v. Highlands Cnty. Bd. of Cnty. Comm’rs, 817 So. 2d 922, 923 (Fla. 2d DCA 2002).

We are compelled to conclude based on the facts of this case that the trial court abused its discretion in awarding fees under section 57.105. Rule 1.540(b) permits a trial court to relieve a party from a final judgment based, in part, on “newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial or rehearing, . . . fraud . . . , misrepresentation, or other misconduct of an adverse party . . . .” Here, the Bank’s audit inquiry letter, which was sent after entry of the final judgment of foreclosure, facially contradicted the Bank’s position at trial that the parties had agreed to a concession. And because Swan Landing’s efforts seeking an explanation of this contradiction proved unsuccessful, we conclude it was reasonable under these circumstances for Swan Landing and its attorneys to pursue the 1.540(b) motion.

We emphasize that section 57.105 should be applied with restraint “to ensure that it serves the purpose for which it was intended.” Bridgestone/Firestone, Inc. v. Herron, 828 So. 2d 414, 419 (Fla. 1st DCA 2002). The purpose of section 57.105 “is to discourage baseless claims . . . [and] not to cast a chilling effect on use of the courts.” Stevenson v. Rutherford, 440 So. 2d 28, 29 (Fla. 4th DCA 1983). In this context, section 57.105 should not be construed to discourage a party from pursuing a colorable claim under rule 1.540. And because Swan Landing and its attorneys presented a colorable claim to support the 1.540(b) motion, we conclude that the trial court abused its discretion in granting the Bank’s motion for sanctions and fees under section 57.105.

Accordingly, we reverse the award of attorney’s fees to the Bank under section 57.105.

Reversed.

NORTHCUTT, J., and DAKAN, STEPHEN L., ASSOCIATE SENIOR JUDGE, Concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED.

[1] At trial, counsel for the Bank testified that the Bank had “foregone that [$]357,000,” and that the Bank “forewent,” and “agreed to that $357,000 concession.”

Francine McKenna-

It was pitched as good news for foreclosed-upon borrowers: Last month regulators announced an extension for those seeking reviews of servicers’ actions under the April 2011 federal consent orders. Consumers now had until yearend to submit claims.

I think the big mortgage servicers, and their consultants, are in no hurry to start the reviews. They’d love it if these megabanks never have to pay borrowers a dime.

“Reviews are still underway. We hope the compensation will begin soon with a limited number of borrowers receiving compensation in the fourth quarter of 2012” says Bryan Hubbard, a spokesman for the Office of the Comptroller of the Currency. Regulators have been promising lump-sum payments “from $500 to, in the most egregious cases, $125,000 plus equity,” for a while. But, as yet, there have been no payments to borrowers. The independent consultants, engaged by the large banks and paid directly by them, haven’t yet made any payment recommendations, according to Hubbard.

Who’s getting paid in the meantime? The independent consultants.

[AMERICAN BANKER]

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
WESTERN DIVISION

DEKALB COUNTY, and JOHN ACARDO,
in his capacity as DeKalb Clerk & Recorder,
on behalf of themselves and all others
similarly situated,
Plaintiffs,

vs.

FEDERAL HOUSING FINANCE
AGENCY, AS CONSERVATOR FOR
FEDERAL NATIONAL MORTGAGE
ASSOCIATION AND FEDERAL HOME
LOAN MORTGAGE CORPORATION;
FEDERAL NATIONAL MORTGAGE
ASSOCIATION, a federally chartered
corporation; and FEDERAL HOME LOAN
MORTGAGE CORPORATION, a federally
chartered corporation,
Defendants.

CLASS ACTION COMPLAINT

Excerpt:

8. Plaintiffs bring this action on their own behalf and, pursuant to Fed. R. Civ. P. 23,
on behalf of a class of persons defined as any Illinois county, and the Recorder or Registrar of
Titles of said counties, which have recorded a deed or other conveyance from Defendants Fannie
Mae or Freddie Mac where those Defendants have claimed they are exempt from the Illinois
Transfer Tax as set forth in 35 ILCS 200/31-1, et seq.

9. The members of the class are so numerous that joinder of all members is
impracticable. The total number of class members is believed to include all Illinois counties.
There are 102 counties in Illinois.

10. The questions of law and fact common to the class concern whether Defendants
Fannie Mae and Freddie Mac qualify for the exemptions they claim from the Illinois Transfer
Tax. These common questions will predominate over any individual questions throughout the
litigation.

11. The claim of Plaintiffs and the absent class members have a common origin and
share a common basis. Their claim originates from the same practice by Defendants Fannie Mae
and Freddie Mac and Defendants act in the same way toward Plaintiffs and the members of the
class. Consequently, the named Plaintiffs and each class member has been the victim of
Defendants’ actions. Plaintiffs’ claim is typical of the claim of absent class members. If brought
individually, the claim of each class member would necessarily require proof of the same
material and substantive facts, and seek the same remedies.

12. The Plaintiffs are willing and prepared to serve the Court and the proposed class
in a representative capacity. The Plaintiffs will fairly and adequately protect the interest of the
class and have no interest adverse to, or which directly and irrevocably conflicts with, the
interests of other members of the class. Plaintiffs have retained counsel experienced in
prosecuting complex class action litigation.

13. A class action is superior to other available methods for the fair and efficient
adjudication of this controversy because individual claims by the class members are impractical
as the costs of prosecution may exceed what any class member has at stake.

[…]