June, 2014 | FORECLOSURE FRAUD | by DinSFLA

Archive | June, 2014

U.S. Bank to Pay $200 Million to Resolve Alleged FHA Mortgage Lending Violations

U.S. Bank to Pay $200 Million to Resolve Alleged FHA Mortgage Lending Violations

Department of Justice

Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, June 30, 2014
U.S. Bank to Pay $200 Million to Resolve Alleged FHA Mortgage Lending Violations

U.S. Bank has agreed to pay the United States $200 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today.

“By misusing government programs designed to maintain and expand homeownership, U.S. Bank not only wasted taxpayer funds, but inflicted harm on homeowners and the housing market that lasts to this day,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.   “As this settlement shows, we will continue to hold accountable financial institutions that violate the law by pursuing their own financial interests at the expense of hardworking Americans.”

“U.S. Bank ignored certain lending requirements causing substantial losses to taxpayers,” said United States Attorney for the Northern District of Ohio Steven M. Dettelbach.  “This settlement demonstrates that the Department of Justice will not permit lenders to play fast and loose with the rules and stick the American people with their significant tab.”

“U.S. Bank’s lax mortgage underwriting practices contributed to home foreclosures across the country,” said United States Attorney for the Eastern District of Michigan Barbara L. McQuade.  “This settlement recovers funds for taxpayers and demonstrates that lenders will be held accountable for engaging in irresponsible lending practices.”

During the time period covered by the settlement, U.S. Bank participated as a direct endorsement lender (DEL) in the FHA insurance program.   A DEL has the authority to originate, underwrite, and certify mortgages for FHA insurance.  If a loan certified for FHA insurance later defaults, the holder of the loan may submit an insurance claim to the U.S. Department of Housing and Urban Development (HUD), FHA’s parent agency, for the losses resulting from the defaulted loan.  Because FHA does not review a loan before it is endorsed for FHA insurance, FHA requires a DEL to follow program rules designed to ensure that the DEL is properly underwriting and submitting mortgages for FHA insurance.

As part of the settlement, U.S. Bank admitted that, from 2006 through 2011, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements.   U.S. Bank also admitted that its quality control program did not meet FHA requirements, and as a result, it failed to identify deficiencies in many of the loans it had certified for FHA insurance, failed to self-report many deficient loans to HUD, and failed to take the corrective action required under the program.   U.S. Bank further acknowledged that its conduct caused FHA to insure thousands of loans that were not eligible for insurance and that the FHA suffered substantial losses when it later paid insurance claims on those loans.

“This substantial recovery on behalf of the Federal Housing Administration should serve as a vivid reminder of the potential consequences of not following HUD program rules, and the diligence with which we will pursue those that violate them, particularly where lenders such as U.S. Bank take actions to compromise the insurance fund,” said David A. Montoya, Inspector General of the Department of Housing and Urban Development.

“We are gratified that U.S. Bank has agreed to put this matter behind it, and we want to thank the Department of Justice and HUD’s Office of Inspector General for all of their efforts in helping us make this settlement a reality,” said Damon Smith, Acting General Counsel for the U.S. Department of Housing and Urban Development.   “This settlement underscores our consistent message that following Federal Housing Administration rules for underwriting FHA-insured loans is a requirement, not an option.”

The agreement resolves potential violations of federal law based on U.S. Bank’s deficient origination of FHA insured mortgages.   The agreement does not prevent state and federal authorities from pursuing enforcement actions for other origination conduct by U.S. Bank, or for any servicing or foreclosure conduct, including civil enforcement actions against U.S. Bank for violations of the CFPB’s new mortgage servicing rules that took effect on Jan. 10, 2014.   U.S. Bank is a banking services company headquartered in Cincinnati, Ohio, and a wholly owned subsidiary of U.S. Bancorp, a bank holding company headquartered in Minneapolis, Minnesota.

The settlement was the result of a joint investigation conducted by HUD, its Office of Inspector General, the Civil Division of the Department of Justice, and the United States Attorney’s Offices for the Northern District of Ohio and the Eastern District of Michigan.

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

# # #

14-684

DO NOT REPLY TO THIS MESSAGE.  IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.

Related Material:
14-684
Civil Division
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Freddie Mac Updates MERS Requirements

Freddie Mac Updates MERS Requirements

MERS®
Effective immediately, unless otherwise noted
Legal compliance
Effective October 15, 2014

Due to recent legal developments, Mortgages in the States of Montana, Oregon and Washington where MERS is not the original mortgagee of record, but is a subsequent assignee, are not eligible for sale to Freddie Mac. Seller/Servicers should refer to Bulletin 2014-6 regarding the use of the MERS Rider (Form 3158) for Mortgages where MERS is the original mortgagee of record in the above States.

Updates and clarifications
We are updating the Glossary to include the term “MERS Governing Documents.” Seller/Servicers are reminded that in the event any requirements of the MERS Governing Documents conflict with the requirements of the Guide, the requirements stipulated within the Guide will prevail.
We are also announcing the following updates and clarifications for MERS-registered Mortgages:
Effective September 16, 2014, we are requiring Seller/Servicers, who sell and/or service Mortgages for which MERS is the mortgagee, to:
• Register the Mortgage(s) with MERS prior to loan delivery to Freddie Mac
• Update the MERS System to reflect a MERS-registered Mortgage status as “Paid in Full” within two Business Days after the Payoff Date
Effective immediately, we are clarifying that Seller/Servicers must:
• Reflect a Concurrent Transfer of Servicing on the MERS System
• Prepare and execute an assignment of the Security Instrument to themselves prior to initiating the first legal action in a foreclosure proceeding
• Prepare and execute an assignment of the Security Instrument to themselves prior to filing any bankruptcy proof of claim or motion for relief from stay and record the assignment where required by State law
Reminders
For MERS-registered Mortgages, we are reminding Servicers of the need to:
• Reconcile Mortgage data in accordance with obligations set forth in the MERS Governing Documents
• Promptly notify Freddie Mac if their membership with MERS is terminated for any reason
• Comply with all MERS-registered Mortgage loan data reconciliation requirements set forth in the MERS Governing Documents
• Ensure that only their duly authorized officers or employees, as appointed by MERS pursuant to a MERS corporate resolution, are permitted to act as MERS signing officers
Freddie Mac may review a Servicer’s compliance with MERS requirements periodically.
Guide updates
Sections 4.14, MERS® Membership, 22.14, Assignment of Security Instrument, 53.15, MERS®, 66.17, Foreclosing in the Servicer’s Name, 67.7, Bankruptcy General Requirements, and 78.15, Payoff – Matured or Prepaid, and the Glossary have been updated to reflect the changes referenced above.

read more Bulletin 2014-12

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Osorio v. State Farm Bank, FSB | 11th Circuit – ROBO-CALLS – Debt Collectors Could Be Fined $1,500 in Statutory Damages, or $4,500 if Willful Every Time They Call

Osorio v. State Farm Bank, FSB | 11th Circuit – ROBO-CALLS – Debt Collectors Could Be Fined $1,500 in Statutory Damages, or $4,500 if Willful Every Time They Call

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

________________________

No. 13-10951

________________________

D.C. Docket No. 0:11-cv-61880-DMM

FREDY D. OSORIO,
Plaintiff – Appellant,

versus

STATE FARM BANK, F.S.B.,

Defendant – Third-Party Plaintiff – Appellee,
versus

CLARA BETANCOURT,
Third-Party Defendant – Appellant.

Appeal from the United States District Court
for the Southern District of Florida

(March 28, 2014)

Excerpt-

If, for example, State Farm is found to have made its first three autodialed calls in reasonable reliance on Betancourt’s negligent misrepresentation (causing a total of $1,500 in statutory damages, or $4,500 if willful), but hundreds more calls were made in spite of a subsequent revocation of consent, then spending $132,000 to defend a claim with a maximum potential recovery of only $4,500 would appear unreasonable. This issue will thus require consideration by the district court on remand.

V. CONCLUSION

For all of the reasons set forth above, we REVERSE the district court’s grant of summary judgment to State Farm on Osorio’s TCPA claim, REVERSE its grant of summary judgment to State Farm on the latter’s negligent-misrepresentation claim against Betancourt, and REMAND the case for further proceedings consistent with this opinion.

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Seize the loans of belly-up homes: Why New York City should use eminent domain to rescue underwater mortgages

Seize the loans of belly-up homes: Why New York City should use eminent domain to rescue underwater mortgages

New York Daily News-

The last time the U.S. experienced economic calamity and slow-motion recovery — from 1929 into the 1930s — the policy responses it adopted were profoundly innovative yet quintessentially American. This was largely because the President who took office in 1933, Franklin Roosevelt, had led New York — the nation’s center of creative dynamism in business, the arts and governance alike.

New York City should take inspiration from FDR’s ingenuity today by employing a home-foreclosure prevention tool that he pioneered.

Among the most pressing emergencies Roosevelt faced upon taking office was a massive foreclosure crisis ravaging home-owning families. A Rube Goldberg system of private mortgage finance, complete with an early form of mortgage “securitization,” had helped fuel a real-estate bubble in parallel with the era’s notorious stock-market bubble. That bubble’s bursting left millions of Americans deep “underwater” — owing much more on their homes than their homes were now worth.

[NEW YORK DAILY NEWS]

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American Savings Bank vs John Riddel, J.R. | HAWAII APPEALS COURT – REVERSED ON APPEAL

American Savings Bank vs John Riddel, J.R. | HAWAII APPEALS COURT – REVERSED ON APPEAL

IN THE INTERMEDIATE COURT OF APPEALS OF THE STATE OF HAWAII

 

AMERICAN SAVINGS BANK, F.S.B., Plaintiff-Appellee,

v.

JOHN RIDDEL, J.R., Defendant-Appellant
and
KEVYN KELI PAIK, WENDYS.L. PAIK, Defendants-Appellees

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT

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Did elderly Naples couple lose home over 10 cents?

Did elderly Naples couple lose home over 10 cents?

WFTX-TV

Lots of people run into problems paying their homeowners’ association fees at one point or another. And an elderly Naples couple, Phil and Sally Duplers, is no different.

They tried making good and pay up, but lost their $1,000,000 home when their homeowners’ associated foreclosed on the house anyway.

The couple tells 4 In Your Corner it’s been a tough couple of years. “We ran into financial problems. I’ve been quite sick,” said Sally Dupler. She had a stroke, and the couple missed about 6 months of HOA dues. “It was about $3,500 approximately,” Sally added.

[WFTX-TV]

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Investors Who Bought Foreclosed Homes in Bulk Look to Sell

Investors Who Bought Foreclosed Homes in Bulk Look to Sell

Wonder how they will get clear titles to these if they have not done so already?


NYT-

A year ago, buying foreclosed homes to rent out was the sure-thing trade for investment firms backed by money from private equity companies, hedge funds and pension systems. But with the supply of cheap foreclosed homes dwindling, some early investors are looking to cash out a bit by flipping homes to competitors.

The Waypoint Real Estate Group, one of the first companies to raise money from private investors to buy foreclosed homes, is quietly shopping as many as 2,000 houses in California that it acquired in the last few years in several private investment funds, said three people who had been briefed on the matter but were not authorized to discuss it. The homes, which are largely rented, are being shown to other companies backed by investor money that have also scooped up distressed houses in states including Arizona, California, Florida, Georgia, Illinois and Nevada.

Waypoint is considering selling about half of its 4,000 homes. Some of the biggest institutional investors in the market for foreclosed homes — companies like the Blackstone Group, American Homes 4 Rent and American Residential Properties — have slowed their pace of acquisitions in response to an increase in home prices and a dearth of foreclosed homes that do not require significant renovation.

[NEW YORK TIMES]

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OCC News Release: Mortgage Performance Improvement Continues, OCC Reports

OCC News Release: Mortgage Performance Improvement Continues, OCC Reports

Are these numbers “improving”, because the FRAUDULENT FORECLOSURES WERE COMPLETED? What are the percentages “of” total numbers? For example, 93.1% of “mortgages”. Has the “mortgages” number DECREASED SUBSTANTIALLY DUE TO FORECLOSED ZOMBIE PROPERTIES WITH NO NEW MORTGAGES TO REPLACE THE ONES THAT WERE FORECLOSED UPON? Has the “mortgages” number DECREASED SUBSTANTIALLY DUE TO INABILITY TO GET ANOTHER MORTGAGE AS HOMEOWNER DUE TO: 1. Poor credit rating/score, as a result of a foreclosure and/or bankruptcy 2. Loss of job/income?

 

WASHINGTON — The performance of first-lien mortgages serviced by large national and federal savings banks improved in the first quarter of 2014, according to a report released today by the Office of the Comptroller of the Currency (OCC).

The OCC Mortgage Metrics Report, First Quarter 2014 showed 93.1 percent of mortgages were current and performing at the end of the quarter, compared with 91.8 percent at the end of the previous quarter and 90.2 percent a year earlier. The percentage of mortgages that were 30 to 59 days past due decreased 19.8 percent from a year earlier to 2.1 percent of the portfolio, the lowest level since the OCC began reporting mortgage performance in 2008. Seriously delinquent mortgages—60 or more days past due or held by bankrupt borrowers whose payments are 30 days or more past due—decreased to 3.1 percent compared with 4.0 percent a year earlier. The percentage of mortgages that were seriously delinquent decreased 22.4 percent from a year earlier and is the lowest level since June 2008.

At the end of the first quarter of 2014, the number of mortgages in the process of foreclosure fell to 432,832, a decrease of 52.3 percent from a year earlier. The percentage of mortgages that were in the process of foreclosure at the end of the first quarter of 2014 was 1.8 percent, the lowest level since September 2008. Servicers initiated 90,852 new foreclosures during the quarter, a decrease of 49.1 percent from a year earlier. The number of completed foreclosures also decreased 33.9 percent to 56,185, compared to a year ago. Factors contributing to the decline in foreclosure activity include improved economic conditions, foreclosure prevention assistance, and transfer of loans to servicers not included in this report.

Servicers implemented 237,133 home retention actions (modifications, trial-period plans, and shorter-term payment plans) in the quarter compared with 71,678 home forfeiture actions (completed foreclosures, short sales, and deed-in-lieu-of-foreclosure actions). The number of home retention actions implemented by servicers decreased 32.1 percent from a year earlier. Almost 91 percent of modifications in the first quarter of 2014 reduced monthly principal and interest payments, and 58.6 percent of modifications reduced payments by 20 percent or more. Modifications reduced payments by $292 per month on average, while modifications made under the Home Affordable Modification Program reduced monthly payments by an average of $312.

Servicers implemented 3,460,476 modifications from January 1, 2008, through December 31, 2013. Of these modifications, 60 percent were active at the end of the first quarter of 2014 and 40 percent had exited the portfolios of the reporting institutions, through payment in full, involuntary liquidation—completed foreclosure, short sale or deed-in-lieu of foreclosures—or transfer to a non-reporting servicer. Of the 2,071,078 modifications that were active at the end of the first quarter of 2014, 69.9 percent were current and performing at quarter end, 23.9 percent were delinquent, and 6.1 percent were in the process of foreclosure.

The mortgages in this portfolio comprise about 48 percent of all mortgages outstanding in the United States—24.5 million loans totaling $4.1 trillion in principal balances. This report provides information on their performance through March 31, 2014, and can be downloaded from the OCC’s Web site, www.occ.gov.

Related Link

 

# # #

OCC shield  The Office of the Comptroller of the Currency (OCC) charters and oversees a nationwide system of national banks and federal savings associations and assures that these banking institutions are safe and sound, competitive, and capable of serving the banking needs of their customers in the best possible manner. OCC press releases and other information are available at http://www.occ.gov. To receive OCC press releases and issuances by e-mail, subscribe at http://www.occ.gov/tools-forms/subscribe/occ-email-list-service.html. ]

 

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Zombie Foreclosures Still A Lingering Legacy of the Housing Crisis

Zombie Foreclosures Still A Lingering Legacy of the Housing Crisis

RealtyTrac-

RealtyTrac recently analyzed zombie foreclosures for Q2 2014 — properties that have started the foreclosure process but never been foreclosed and the homeowner has vacated the property — one of the lingering legacies of the recent housing crisis.

Zombie foreclosures are a byproduct of lengthy foreclosure timelines and changing state foreclosure statutes. Many of these properties are likely to be the eyesores of a given neighborhood, driving down the values of surrounding homes and eroding local government tax revenue.

Distressed homeowners, who have vacated the property, may not realize they are still responsible for and owe property taxes on the zombie foreclosure — and that means unpaid property tax revenue for the local government taxing entity. RealtyTrac estimates that more than $400 million in property tax revenue nationwide is likely delinquent because of these zombie foreclosures.

[REALTYTRAC]

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California Appellate Court Judges’ Ownership of Stocks and Bonds of Financial Companies

California Appellate Court Judges’ Ownership of Stocks and Bonds of Financial Companies

Pueblo Lands-

How do judges reach conclusions in complex cases where the law is often open to interpretation, or where the laws are still changing in response to the times? Are judges influenced by cultural currents? Do politics sway their decisions? What role does their material interest play in shaping their rulings and legal reasoning?

A network diagram of the 42 of California’s 105 Appellate Court judges who own at least $2,000 of stock or bonds in a financial company. The larger and darker colored nodes are financial companies. The node size is based on the number of judges who reported an ownership stake in the company. The larger the line connection two node (judges to their investments), the larger the investment in dollar terms.

I don’t claim to have answers to any of these questions. But in searching for some possible reasons for the outcomes of homeowner lawsuits against banks, mortgage lenders, and mortgage servicing companies in California, I thought it might be useful to compile information on the economic interests of the judges themselves. The advantage of focusing on the economic interest of judges, as opposed to other factors that shape their interpretations of law, like political ideology or culture, is that material economic interests are literally material, and therefore easily identified and measured.

[PUEBLO LAND]

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Backing Banks Over Borrowers, California Judges Often Big Stakeholders in Same Banks

Backing Banks Over Borrowers, California Judges Often Big Stakeholders in Same Banks

AND we know this is happening not only in California.


Truth-Out-

Sue your bank in California over a wrongful foreclosure, and the best you’re likely to get – if you have ironclad evidence that it broke the law – is a loan modification. That is, a “win” for the borrower usually means the bank keeps another customer and collects interest payments that are thousands of basis points above the level at which the bank is able to borrow from the Fed. Very often, however, homeowner lawsuits against the banks end in dismissal. In the parlance of the courts, the defendant’s demurrer is sustained. Judges in California’s superior courts often rule in favor of the banks, and the few lawsuits that filter up to the appeals courts and Supreme Court don’t fare any better.

Why do the banks keep winning in court against borrowers alleging wrongful foreclosure, fraud and other abuses? Many borrowers and their lawyers say there’s a judicial bias favoring the banks over homeowners, and that this bias is revealed by the economic position of the judges themselves. Most California judges are wealthy, and many of them hold significant investments in financial corporations and bonds, oftentimes even in the very same banks and mortgage lenders that have been sued by thousands of Californians over alleged fraud, deception and wrongful foreclosure.

Case in point: Baldwin v. Bank of America, a borrower lawsuit alleging wrongful foreclosure that battled all the way to the steps of California’s Supreme Court. In 2007, Marvin Baldwin borrowed half a million dollars from J&R Lending to purchase a small three-unit apartment building in Long Beach, California. It was the height of the real estate bubble. Things quickly fell apart, and Baldwin ran into financial troubles.

[TRUTHOUT]

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RUFINI vs CITIMORTGAGE | CA Appeals Court – Breach of Contract, Negligent Misrepresentation and Unfair Business Practices — Modifications

RUFINI vs CITIMORTGAGE | CA Appeals Court – Breach of Contract, Negligent Misrepresentation and Unfair Business Practices — Modifications

IN THE COURT APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE

JAMES RUFINI,
Plaintiff and Appellant,

v.

CITIMORTGAGE, INC.,
Defendant and Respondent.

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“Weasel Fargo” **Whacked** While Trying a Razzle Dazzle Two Step Backpedal || Excellent order USDC SC – Harlin v. Wells Fargo – WF’s claim that Nat’l Mtg Settlement precludes INDEPENDENT state consumer claims … DENIED

“Weasel Fargo” **Whacked** While Trying a Razzle Dazzle Two Step Backpedal || Excellent order USDC SC – Harlin v. Wells Fargo – WF’s claim that Nat’l Mtg Settlement precludes INDEPENDENT state consumer claims … DENIED

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION

EMILY M. HARLIN,
Plaintiff

vs.

WELLS FARGO BANK, NA,
Defendant

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U.S. BANK vs SAWYER | MAINE – Dismissal with Prejudice Affirmed – 4 Mediations. Endless requests for documents

U.S. BANK vs SAWYER | MAINE – Dismissal with Prejudice Affirmed – 4 Mediations. Endless requests for documents

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2014 ME 81
Docket: Cum-13-472
Argued: May 13, 2014
Decided: June 24, 2014
Panel: ALEXANDER, SILVER, MEAD, GORMAN, and JABAR, JJ.

U.S. BANK, N.A.

v.

DAVID SAWYER et al.

MEAD, J.

[¶1] U.S. Bank N.A. (Bank) appeals from the judgment of the Superior
Court (Cumberland County, Mills, J.) dismissing the Bank’s foreclosure complaint
with prejudice. The Bank contends that the court abused its discretion in
dismissing the complaint because there was no evidence of bad faith or of
prejudice to the mortgagor, and because the sanction it imposed is too severe. We
affirm the judgment.

I. BACKGROUND
[¶2] The following facts are taken from the unrebutted testimony of David
and Debra Sawyer offered at the September 24, 2013, show cause hearing. See
Theriault v. Murray, 625 A.2d 908, 909 (Me. 1993).

[¶3] In 2009, the Sawyers first defaulted on a mortgage held by the Bank.1
After their default, the Sawyers were approved for a modification plan under which
they were to make a reduced monthly payment for a trial period of six months.
The Sawyers met their payment obligations at the reduced rate, but at some point
the loan-servicing agency, on behalf of the Bank,2 increased their monthly payment
to a level above the predelinquency amount and the Sawyers were again unable to
make timely payments. In 2012, the Bank filed a complaint for foreclosure. At the
time the complaint was filed, J.P. Morgan Chase Bank N.A. (Chase) had taken
over as loan servicer from the servicer with whom the Sawyers had negotiated the
reduced payment schedule. After the complaint was filed, and before the first of
four court-ordered mediations took place, the Sawyers contacted Chase in an
attempt to negotiate a modification. They were told to provide Chase with a list of
documents, which they did. The Sawyers reported, however, that Chase kept
requesting additional documents or new copies of documents that they had already
submitted.

A. The First Mediation
[¶4] In October 2012, Chase and the Sawyers met at the first mediation
session. The Sawyers again expressed their interest in a modification. Chase
requested additional copies of the same documents that the Sawyers had already
submitted in the months leading up to the mediation session. Chase promised the
Sawyers that if they provided the requested documentation a second time, it would
make a decision within 30 days of submittal. The Sawyers submitted the requested
documents, but Chase did not make a decision on the modification.

B. The Second Mediation
[¶5] On February 22, 2013, the parties attended another mediation session.
Again, the Sawyers were given a list of documents to provide. This time Chase
promised to respond to the modification request by April 22. The Sawyers
hand-delivered the requested documents to Chase’s local counsel, but Chase did
not respond by April 22, and still had not done so by the date of the next scheduled
mediation, May 17.

C. The Third Mediation
[¶6] At the May mediation, Chase once again requested additional
documentation and expressly promised to respond by June 28. The mediator later
reported to the court that Chase confirmed it was in receipt of the required
documents and that it would respond with a “definite answer” by the agreed-upon
date. The Sawyers did not receive a response by June 28. After the deadline had
passed, the Sawyers attempted unsuccessfully to contact Chase. When their
housing counselor did reach Chase, he was informed that the Sawyers’
modification was in the final stages of underwriting and would be released “in just
a couple of days.” Instead of a modification, however, the Sawyers received notice
on July 17—only a few days after their housing counselor spoke with Chase and
had been promised that a modification was imminent—that their loan would be
transferred to yet another servicer, Select Portfolio Servicing (SPS).

[¶7] After the third mediation, the court held a status conference at which
the Sawyers reported that in addition to the delays perpetuated by Chase, they were
subjected to daily debt-collection calls and letters, and that new and excessive
taxes, fees, and interest were regularly added to the valuation of their debt, making
it less likely that they would be approved for a modification.3 The Sawyers
accepted that they were responsible for the initial default, but reported that the
post-default actions of Chase and other servicers were causing them severe
distress. After hearing a summary of what had occurred at the mediation sessions
(including a description of Chase’s actions and inaction), the court directed Chase
that, unless the issues were resolved at the mediation on September 10, it was to
appear on September 24 and show cause why the complaint should not be
dismissed with prejudice.

D. The Fourth Mediation
[¶8] No agreement or modification was reached at the September mediation.
Instead, the new servicer, SPS, informed the Sawyers that they would have to
submit entirely new documentation if they wished to be considered for a
modification. SPS demanded these documents within ten days.

E. The Show Cause Hearing
[¶9] On September 24, the court conducted a show cause hearing. Although
SPS had been aware of the hearing date since August 15, it retained counsel only a
few days prior to the hearing. It sent counsel to the hearing with an oral proposal
for a proprietary modification,4 but without evidence, witnesses, or any convincing
argument as to why the court should not dismiss the case with prejudice.

[¶10] Noting that the Bank had the burden of going forward, the court found
that the Bank was not prepared to proceed at the hearing “in spite of the notice to
be prepared to proceed” and dismissed the complaint with prejudice. The Bank
appeals.

[…]

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N.Y. Agency Taps TARP Ex-Watchdog Barofsky to Monitor Credit Suisse

N.Y. Agency Taps TARP Ex-Watchdog Barofsky to Monitor Credit Suisse

.

Credit Suisse Agreed to Pay $2.6B, Including $715M to New York, in Tax-Evasion Case


WSJ-

Neil Barofsky, the former watchdog of the U.S. government’s bank-bailout program, has been selected by New York’s banking agency to oversee Credit Suisse Group AG’s compliance with a tax-evasion settlement the firm reached with federal and state authorities last month, according to people familiar with the matter.

A five-member committee within the New York Department of Financial Services recently chose Mr. Barofsky from a pool of about 15 candidates who applied to be the monitor for the settlement, according to one of…

 [WALL STREET JOURNAL]

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BadHawk DOWN . . . OCWEN stock price plunges on news of their subsidiary being…”shut out of a distressed loan auction”

BadHawk DOWN . . . OCWEN stock price plunges on news of their subsidiary being…”shut out of a distressed loan auction”

HW-

It hasn’t been a good day for Altisource Asset Management Corp (AAMC). In fact, the day is looking downright catastrophic. The company’s stock is currently trading at $840 per share, which is down more than $259 for the day. The company’s stock has lost more than 30% of its value in less than four hours of trading.

The precipitous fall comes on the heels of reports that the company’s affiliate, Altisource Residential (RESI), was shut out of a distressed loan auction from the U.S. Department of Housing and Urban Development. According to a statement from HUD, Lone Star Funds was the sole winner of the auction, with a weighted average bid of 77.6% of the collateral value.

HUD said that this was the first time in the history of its Distressed Asset Stabilization Program that a single bidder submitted the highest bid on “each and every pool.”

[HOUSINGWIRE]

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Bank of America v. Caulkett | SCOTUS PETITION – Whether, under Section 506(d) of the Bankruptcy Code, which provides that “[t]o the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void,” a chapter 7 debtor may “strip off” a junior mortgage lien in its entirety when the outstanding debt owed to a senior lienholder exceeds the current value of the collateral

Bank of America v. Caulkett | SCOTUS PETITION – Whether, under Section 506(d) of the Bankruptcy Code, which provides that “[t]o the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void,” a chapter 7 debtor may “strip off” a junior mortgage lien in its entirety when the outstanding debt owed to a senior lienholder exceeds the current value of the collateral

A response to the petition is due June 27.

 

IN THE
Supreme Court of the United States

BANK OF AMERICA, N.A.,
Petitioner,
v.

DAVID B. CAULKETT,
Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI

QUESTION PRESENTED
Section 506(d) of the Bankruptcy Code provides in
relevant part that “[t]o the extent that a lien secures a
claim against the debtor that is not an allowed secured
claim, such lien is void.” In Dewsnup v. Timm, 502 U.S.
410 (1992), this Court held that section 506(d) does not
permit a chapter 7 debtor to “strip down” a mortgage
lien to the current value of the collateral. The question
presented in this case, on which the courts of appeals
are divided, is whether section 506(d) permits a chapter
7 debtor to “strip off” a junior mortgage lien in its entirety
when the outstanding debt owed to a senior
lienholder exceeds the current value of the collateral.

[..]

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BlackRock v. U.S. Bank | DERIVATIVE COMPLAINT AGAINST U.S. BANK NA FOR BREACH OF CONTRACT; VIOLATION OF THE TRUST INDENTURE ACT OF 1939; BREACH OF FIDUCIARY DUTY; BREACH OF DUTY OF INDEPENDENCE; AND NEGLIGENCE

BlackRock v. U.S. Bank | DERIVATIVE COMPLAINT AGAINST U.S. BANK NA FOR BREACH OF CONTRACT; VIOLATION OF THE TRUST INDENTURE ACT OF 1939; BREACH OF FIDUCIARY DUTY; BREACH OF DUTY OF INDEPENDENCE; AND NEGLIGENCE

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

BLACKROCK ALLOCATION TARGET SHARES: SERIES S PORTFOLIO; BLACKROCK BALANCED CAPITAL PORTFOLIO (FI); BLACKROCK CORE ACTIVE BOND FUND B; BLACKROCK CORE ACTIVE LIBOR FUND B; BLACKROCK CORE BOND PORTFOLIO; BLACKROCK CORE BOND TRUST; BLACKROCK COREALPHA BOND FUND E; BLACKROCK COREALPHA BOND MASTER PORTFOLIO; BLACKROCK COREPLUS BOND FUND B; BLACKROCK ENHANCED GOVERNMENT FUND, INC.; BLACKROCK FIXED INCOME GLOBALALPHA MASTER FUND LTD.; BLACKROCK FIXED INCOME VALUE OPPORTUNITIES; BLACKROCK FUNDS II, INFLATION PROTECTED BOND PORTFOLIO; BLACKROCK INCOME OPPORTUNITY TRUST; BLACKROCK INCOME TRUST, INC.; BLACKROCK LIMITED DURATION INCOME TRUST; BLACKROCK LOW DURATION BOND PORTFOLIO; BLACKROCK MANAGED VOLATILITY V.I. FUND (FI); BLACKROCK MULTI-ASSET INCOME – NON-AGENCY MBS PORTFOLIO; BLACKROCK MULTI-SECTOR INCOME TRUST; BLACKROCK SECURED CREDIT PORTFOLIO; BLACKROCK STRATEGIC INCOME OPPORTUNITIES PORTFOLIO; BLACKROCK TOTAL RETURN PORTFOLIO (INS – SERIES); BLACKROCK TOTAL RETURN V.I. PORTFOLIO (INS – VAR SER); BLACKROCK US MORTGAGE;
BLACKROCK WORLD INCOME FUND, INC.; FIXED INCOME SHARES (SERIES R); FIXED INCOME SHARES: SERIES C; FIXED INCOME SHARES: SERIES LD; FIXED INCOME SHARES: SERIES M; LVS I LLC; LVS I SPE XIV LLC; LVS II LLC; PARS ASPIRE FUND; PCM FUND, INC.; PIMCO ABSOLUTE RETURN STRATEGY 3D OFFSHORE FUND LTD.; PIMCO ABSOLUTE RETURN STRATEGY II MASTER FUND LDC; PIMCO ABSOLUTE RETURN STRATEGY III MASTER FUND LDC; PIMCO ABSOLUTE RETURN STRATEGY III OVERLAY MASTER FUND LTD.; PIMCO ABSOLUTE RETURN STRATEGY IV IDF LLC; PIMCO ABSOLUTE RETURN STRATEGY IV MASTER FUND LDC; PIMCO ABSOLUTE RETURN STRATEGY V MASTER FUND LDC; PIMCO CANADA CANADIAN COREPLUS BOND TRUST; PIMCO CANADA CANADIAN COREPLUS LONG BOND TRUST; PIMCO CANADA CANADIAN TACTICAL BOND TRUST; PIMCO CANADIAN TOTAL RETURN BOND FUND; PIMCO COMBINED ALPHA STRATEGIES MASTER FUND LDC; PIMCO CORPORATE & INCOME OPPORTUNITY FUND; PIMCO CORPORATE & INCOME STRATEGY FUND; PIMCO DISTRESSED SENIOR CREDIT OPPORTUNITIES FUND II, L.P.; PIMCO DYNAMIC CREDIT INCOME FUND; PIMCO DYNAMIC INCOME FUND; PIMCO EQUITY SERIES: PIMCO BALANCED INCOME FUND; PIMCO ETF TRUST: PIMCO LOW DURATION EXCHANGE-TRADED FUND; PIMCO ETF TRUST: PIMCO TOTAL RETURN EXCHANGE-TRADED FUND; PIMCO FUNDS: PIMCO EM FUNDAMENTAL INDEXPLUS® AR STRATEGY FUND; PIMCO FUNDS: PIMCO INTERNATIONAL FUNDAMENTAL INDEXPLUS® AR STRATEGY FUND; PIMCO FUNDS: PIMCO SMALL COMPANY FUNDAMENTAL INDEXPLUS® AR STRATEGY FUND; PIMCO FUNDS: PIMCO COMMODITIESPLUS® STRATEGY FUND; PIMCO FUNDS: PIMCO COMMODITY REAL RETURN STRATEGY FUND®; PIMCO FUNDS: PIMCO CREDIT ABSOLUTE RETURN FUND; PIMCO FUNDS: PIMCO DIVERSIFIED INCOME FUND; PIMCO FUNDS: PIMCO EMERGING LOCAL BOND FUND; PIMCO FUNDS: PIMCO EMERGING MARKETS BOND FUND; PIMCO FUNDS: PIMCO EMERGING MARKETS CURRENCY FUND; PIMCO FUNDS: PIMCO EMG INTL LOW VOLATILITY RAFI®-PLUS AR FUND; PIMCO FUNDS: PIMCO EXTENDED DURATION FUND; PIMCO FUNDS: PIMCO FLOATING INCOME FUND; PIMCO FUNDS: PIMCO FOREIGN BOND FUND (U.S. DOLLAR-HEDGED); PIMCO FUNDS: PIMCO FOREIGN BOND FUND (UNHEDGED); PIMCO FUNDS: PIMCO FUNDAMENTAL ADVANTAGE ABSOLUTE RETURN STRATEGY FUND; PIMCO FUNDS: PIMCO FUNDAMENTAL INDEXPLUS® AR FUND; PIMCO FUNDS: PIMCO GLOBAL ADVANTAGE® STRATEGY BOND FUND; PIMCO FUNDS: PIMCO GLOBAL BOND FUND (U.S. DOLLAR-HEDGED); PIMCO FUNDS: PIMCO GLOBAL BOND FUND (UNHEDGED); PIMCO FUNDS: PIMCO GLOBAL MULTI-ASSET FUND; PIMCO FUNDS: PIMCO GNMA FUND; PIMCO FUNDS: PIMCO HIGH YIELD FUND; PIMCO FUNDS: PIMCO INCOME FUND; PIMCO FUNDS: PIMCO INFLATION RESPONSE MULTI-ASSET FUND; PIMCO FUNDS: PIMCO INTERNATIONAL STOCKSPLUS® AR STRATEGY FUND (U.S. DOLLAR-HEDGED); PIMCO FUNDS: PIMCO INTERNATIONAL STOCKSPLUS® AR STRATEGY FUND (UNHEDGED); PIMCO FUNDS: PIMCO INVESTMENT GRADE CORPORATE BOND FUND; PIMCO FUNDS: PIMCO LONG DURATION TOTAL RETURN FUND; PIMCO FUNDS: PIMCO LONG-TERM CREDIT FUND; PIMCO FUNDS: PIMCO LONG-TERM U.S. GOVERNMENT FUND; PIMCO FUNDS: PIMCO LOW DURATION FUND; PIMCO FUNDS: PIMCO LOW DURATION FUND II; PIMCO FUNDS: PIMCO LOW DURATION FUND III; PIMCO FUNDS: PIMCO MODERATE DURATION FUND; PIMCO FUNDS: PIMCO MORTGAGE OPPORTUNITIES FUND; PIMCO FUNDS: PIMCO MORTGAGE-BACKED SECURITIES FUND; PIMCO FUNDS: PIMCO REAL ESTATE REAL RETURN STRATEGY FUND; PIMCO FUNDS: PIMCO REAL RETURN ASSET FUND; PIMCO FUNDS: PIMCO REAL RETURN FUND; PIMCO FUNDS: PIMCO SHORT-TERM FUND; PIMCO FUNDS: PIMCO SMALL CAP STOCKSPLUS® AR STRATEGY FUND; PIMCO FUNDS: PIMCO STOCKSPLUS® ABSOLUTE RETURN FUND; PIMCO FUNDS: PIMCO STOCKSPLUS® AR SHORT STRATEGY FUND; PIMCO FUNDS: PIMCO STOCKSPLUS® FUND; PIMCO FUNDS: PIMCO STOCKSPLUS® LONG DURATION FUND; PIMCO FUNDS: PIMCO TOTAL RETURN FUND; PIMCO FUNDS: PIMCO TOTAL RETURN FUND II; PIMCO FUNDS: PIMCO TOTAL RETURN FUND III; PIMCO FUNDS: PIMCO TOTAL RETURN FUND IV; PIMCO FUNDS: PIMCO UNCONSTRAINED BOND FUND; PIMCO FUNDS: PIMCO UNCONSTRAINED TAX MANAGED BOND FUND; PIMCO FUNDS: PIMCO WORLDWIDE FUNDAMENTAL ADVANTAGE AR STRATEGY FUND; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES ASSET-BACKED SECURITIES PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES DEVELOPING LOCAL MARKETS PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES EMERGING MARKETS PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES HIGH YIELD PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES INTERNATIONAL PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES LONG DURATION CORPORATE BOND PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES MORTGAGE PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES REAL RETURN PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES SHORT-TERM PORTFOLIO; PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES U.S. GOVERNMENT SECTOR PORTFOLIO; PIMCO GLOBAL ADVANTAGE STRATEGY BOND FUND (CANADA); PIMCO GLOBAL CREDIT OPPORTUNITY MASTER FUND LDC; PIMCO GLOBAL INCOME OPPORTUNITIES FUND; PIMCO GLOBAL STOCKSPLUS & INCOME FUND; PIMCO HIGH INCOME FUND; PIMCO INCOME OPPORTUNITY FUND; PIMCO INCOME STRATEGY FUND; PIMCO INCOME STRATEGY FUND II; PIMCO LARGE CAP STOCKSPLUS ABSOLUTE RETURN FUND; PIMCO MONTHLY INCOME FUND (CANADA); PIMCO OFFSHORE FUNDS – PIMCO ABSOLUTE RETURN STRATEGY IV EFUND; PIMCO OFFSHORE FUNDS: PIMCO OFFSHORE FUNDS – PIMCO ABSOLUTE RETURN STRATEGY V ALPHA FUND; PIMCO STRATEGIC GLOBAL GOVERNMENT FUND, INC.; PIMCO TACTICAL OPPORTUNITIES MASTER FUND LTD.; PIMCO VARIABLE INSURANCE TRUST: PIMCO COMMODITYREALRETURN STRATEGY PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO EMERGING MARKETS BOND PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO FOREIGN BOND PORTFOLIO (U.S. DOLLAR HEDGED); PIMCO VARIABLE INSURANCE TRUST: PIMCO FOREIGN BOND PORTFOLIO (UNHEDGED); PIMCO VARIABLE INSURANCE TRUST: PIMCO GLOBAL ADVANTAGE STRATEGY BOND PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO GLOBAL BOND PORTFOLIO (UNHEDGED); PIMCO VARIABLE INSURANCE TRUST: PIMCO HIGH YIELD PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO LONG TERM U.S. GOVERNMENT PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO LOW DURATION PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO REAL RETURN PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO SHORT-TERM PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO TOTAL RETURN PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO UNCONSTRAINED BOND PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO GLOBAL MULTI-ASSET MANAGED ALLOCATION PORTFOLIO; PIMCO VARIABLE INSURANCE TRUST: PIMCO GLOBAL MULTI-ASSET MANAGED VOLATILITY PORTFOLIO; TERLINGUA FUND 2, LP; CREF BOND MARKET ACCOUNT; CREF SOCIAL CHOICE ACCOUNT; TIAA GLOBAL PUBLIC INVESTMENTS, MBS LLC; TIAA-CREF BOND FUND; TIAA-CREF BOND PLUS FUND; TIAA-CREF LIFE BOND FUND; TIAA-CREF LIFE INSURANCE COMPANY; TIAA-CREF SHORT-TERM BOND FUND; TIAA-CREF SOCIAL CHOICE BOND FUND; PRUDENTIAL BANK & TRUST; PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY; PRUDENTIAL TRUST COMPANY; THE GIBRALTAR LIFE INSURANCE COMPANY LTD.; THE PRUDENTIAL INSURANCE COMPANY OF AMERICA; THE PRUDENTIAL INVESTMENT PORTFOLIOS 2; THE PRUDENTIAL INVESTMENT PORTFOLIOS 9; THE PRUDENTIAL INVESTMENT PORTFOLIOS INC.; THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC. 17; THE PRUDENTIAL SERIES FUND; BROOKFIELD HIGH INCOME FUND INC.; BROOKFIELD MORTGAGE OPPORTUNITY INCOME FUND INC.; BROOKFIELD SECURITIZED CREDIT QIF FUND; BROOKFIELD TOTAL RETURN FUND INC.; CRYSTAL RIVER CAPITAL INC.; MILLERTON ABS CDO LTD.; GLOBAL PREFERRED RE LIMITED; LIICA HOLDINGS, LLC; LIICA RE I, INC.; LIICA RE II, INC.; MONUMENTAL LIFE INSURANCE COMPANY; STONEBRIDGE CASUALTY INSURANCE COMPANY; STONEBRIDGE LIFE INSURANCE COMPANY; STONEBRIDGE REINSURANCE COMPANY; TRANSAMERICA ADVISORS LIFE INSURANCE COMPANY; TRANSAMERICA ADVISORS LIFE INSURANCE COMPANY OF NEW YORK; TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY; TRANSAMERICA INTERNATIONAL RE (BERMUDA) LTD.; TRANSAMERICA LIFE (BERMUDA) LTD.; TRANSAMERICA LIFE INSURANCE COMPANY; TRANSAMERICA LIFE INTERNATIONAL (BERMUDA) LTD.; WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO; KORE ADVISORS LP; SEALINK FUNDING LIMITED; DZ BANK AG, derivatively, on behalf of the Trusts Identified in Exhibit 1
Plaintiffs,

-against-

U.S. BANK NATIONAL ASSOCIATION,
Defendant,

-and-

The Trusts Identified in Exhibit 1,
Nominal Defendants.

I. NATURE AND SUMMARY OF THE ACTION

1. Defendant U.S. Bank is a national banking association and is the Trustee for over a thousand RMBS trusts originally securitized by more than $1.3 trillion of residential mortgage loans. Among them are the Trusts at issue in this action: 841 private-label RMBS Trusts securitized between 2004 and 2008 collateralized with loans worth approximately $771 billion at the time of securitization. U.S. Bank, as Trustee, is the sole gatekeeper for the protection of the Trusts and their beneficial certificateholders (the “Certificateholders”), and must at all times act in the best interests of the Trusts. As alleged herein, U.S. Bank wholly failed to discharge its duties and obligations to protect the Trusts. Instead, to protect its own business interests, U.S. Bank ignored pervasive and systemic deficiencies in the underlying loan pools and the servicing of those loans and unreasonably refused to take any action. This derivative action seeks to recover billions of dollars in damages to the Trusts caused by U.S. Bank’s abdication of responsibility.

2. RMBS trusts are created to facilitate the securitization and sale of residential mortgage loans to investors. The trust’s assets consist entirely of the underlying loans, and the principal and interest (“P&I”) payments on the loans are “passed through” to the certificateholders. Between 2004 and 2008, a handful of large investment banks dominated the RMBS market and controlled the process from beginning to end. These banks act as “sponsors” of the RMBS, acquiring the mortgage loans from originators, who often were affiliates of the sponsors, or beholden to them through warehouse lending or other financial arrangements. Once the loans are originated, acquired and selected for securitization, the sponsor creates a trust where the loans are deposited for the benefit of the Certificateholders. The sponsor also hand-picks the servicer, often an affiliate of the sponsor or originator, to collect payments on the loans. Finally, a select number of these same banks that originate, securitize and service RMBS also act as trustees on other sponsor’s deals.

3. To ensure the quality of the RMBS and the underlying loans, the Trust documents generally include representations and warranties from the loan sellers attesting to the quality and characteristics of the mortgages as well as an agreement to cure, substitute, or repurchase mortgages that do not comply with those representations and warranties. Because the risk of non-payment or default on the loans is “passed through” to investors, other than these representations and warranties, the large investment banks and other players in the mortgage securitization industry have no “skin” in the game once the RMBS are sold to certificateholders. Instead, their profits are principally derived from the spread between the cost to originate or purchase loans, how much they can sell them to investors once packaged as securities, as well as various servicing-related income. Accordingly, volume became the focus, and the quality of the loans was disregarded.

[…]

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BlackRock, Pimco sue over billions in mortgage securities losses

BlackRock, Pimco sue over billions in mortgage securities losses

What about the homeowners? Pay very close attention to this suit…chances are you have or had a Frankenstein loan on your house.


Reuters-

Institutional investors including BlackRock Inc and Allianz SE’s Pimco on Wednesday sued six of the largest bond trustees, accusing them of failing to properly oversee more than $2 trillion in mortgage-backed securities issued in the run-up to the 2008 financial crisis.

The lawsuits, filed in New York state court, claim the trustees breached their duties to investors by failing to force lenders and sponsors of the securities to repurchase defective loans, the suits claim.

The investors are seeking damages for losses that exceed $250 billion and relate to over 2,200 residential mortgage-backed securities trusts issued between 2004 and 2008, according to a person familiar with the cases.

[REUTERS]

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BofA Must Face U.S. Suit Over Mortgage-Securities Fraud

BofA Must Face U.S. Suit Over Mortgage-Securities Fraud

Bloomberg-

Bank of America Corp. must face the U.S. Justice Department’s lawsuit accusing it of misleading investors about the quality of loans tied to $850 million in residential mortgage-backed securities.

U.S. District Judge Max O. Cogburn Jr. in Charlotte, North Carolina, gave the government 30 days to revise the suit after a magistrate judge earlier found its complaint was deficient and recommended it be dismissed. Cogburn said in yesterday’s ruling that the government hadn’t adequately supported claims that bank documents omitted key facts and included false statements.

The case is part of a U.S. bid to punish companies for actions it says helped trigger the financial crisis. The Bank of America case and others like it rely on a law dating to the savings-and-loan crisis of the 1980s that allows the government to punish misdeeds that are too old to be covered by other statutes. It also lets the U.S. seek larger damages awards.

“The court need not reach far outside the complaint or be an expert in economics to take notice that it was the trading of toxic RMBS between financial institutions that nearly brought down the banking system in 2008,” Cogburn said in his ruling.

[BLOOMBERG]

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Wells Fargo Bank, N.A. v. Scantling | At issue was whether debtor can “strip off” a wholly unsecured junior mortgage in a Chapter 20 case. . . . Court’s determination that debtor could strip off Wells Fargo’s second and third liens on the residence because they were wholly unsecured.

Wells Fargo Bank, N.A. v. Scantling | At issue was whether debtor can “strip off” a wholly unsecured junior mortgage in a Chapter 20 case. . . . Court’s determination that debtor could strip off Wells Fargo’s second and third liens on the residence because they were wholly unsecured.

Via Justia

Wells Fargo Bank, N.A. v. Scantling

Court: U.S. 11th Circuit Court of Appeals

Docket: 13-10558 Opinion Date: June 18, 2014

Judge: Schlesinger

Areas of Law: Bankruptcy

Debtor filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code, seeking to determine the secured status of the second and third mortgages held by Wells Fargo on debtor’s principal residence. At issue was whether debtor can “strip off” a wholly unsecured junior mortgage in a Chapter 20 case. The court concluded that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) did not prohibit this result. Accordingly, the court affirmed the Bankruptcy Court’s determination that debtor could strip off Wells Fargo’s second and third liens on the residence because they were wholly unsecured.

http://j.st/Zwzv

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Exclusive: BofA asks Holder to meet with its CEO

Exclusive: BofA asks Holder to meet with its CEO

Can’t blame them, it worked for JP Morgan’s Dimon as we’re well aware!


Reuters-

Brian Moynihan may be taking a play out of Jamie Dimon’s book.

Representatives of Bank of America Corp have asked U.S. Attorney General Eric Holder to meet with Moynihan, its chief executive officer, in an attempt to resolve differences over a possible multibillion-dollar settlement involving shoddy mortgage securities sold by the second-largest U.S. bank and its units, according to people familiar with the negotiations.

Negotiators for Bank of America and the Justice Department have not met in more than a week and have no plans to do so after a flurry of meetings did not bring them close to a settlement amount, sources said.

Bank of America spokesman Lawrence Grayson and Justice Department spokeswoman Dena Iverson declined to comment.

[REUTERS]

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Posted in STOP FORECLOSURE FRAUD1 Comment

GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
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