CITY OF ST. CLAIR SHORES POLICE AND FIRE RETIREMENT SYSTEM vs NATIONSTAR MORTGAGE HOLDINGS INC., JESSE K. BRAY and ROBERT D. STILES | ROBO-SIGNING - COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS

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CITY OF ST. CLAIR SHORES POLICE AND FIRE RETIREMENT SYSTEM vs NATIONSTAR MORTGAGE HOLDINGS INC., JESSE K. BRAY and ROBERT D. STILES | ROBO-SIGNING – COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS

CITY OF ST. CLAIR SHORES POLICE  AND FIRE RETIREMENT SYSTEM vs NATIONSTAR MORTGAGE HOLDINGS  INC., JESSE K. BRAY and ROBERT D.  STILES | ROBO-SIGNING – COMPLAINT FOR VIOLATIONS OF  THE FEDERAL SECURITIES LAWS

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. _______-Civ-___________

CITY OF ST. CLAIR SHORES POLICE
AND FIRE RETIREMENT SYSTEM,
Individually and on Behalf of All Others
Similarly Situated,
Plaintiff,

vs.

NATIONSTAR MORTGAGE HOLDINGS
INC., JESSE K. BRAY and ROBERT D.
STILES,
Defendants.

CLASS ACTION
DEMAND FOR JURY TRIAL

EXCERPT:
In February 2012, 49 states and the District
of Columbia entered into a $25 billion
settlement with Ally Bank (formerly GMAC), Ba
nk of America, Citicorp, JP Morgan Chase and
Wells Fargo, five of the nation’s biggest mortgage
lenders, over a laundry list of improprieties from
“robo-signing” foreclosure documents to failing to
negotiate in good faith with homeowners over
inflated fees and other charges that pushed them in
to default (the “National Mortgage Settlement”).
The National Mortgage Settlement encouraged le
nders to negotiate lower rates with existing
borrowers and to lower principal am
ounts owed in an effort to keep
houses out of foreclosure.
Pursuant to new servicing rule
s under the National Mortgage Se
ttlement designed to slow down
foreclosures, the signing banks
were prohibited from employing “robo-
signing” in connection with
foreclosures or paying agents to speed up forecl
osures, took on new detailed paperwork obligations,
and had to take a number of
other steps before foreclosing,
including reviewing any loan
modification proposals the borrower made and givi
ng borrowers two weeks to
accept or reject any
offer the bank made. Separately, banks also faced
regulations under Basel III, a comprehensive set
of reform measures, limiting the amount of capital
they could risk on servicing rights, spurring them
to offload their servicing businesses.
37.
Following the financial crisis, Ocwen, then
the nation’s largest non-bank mortgage
servicing company, began buying up servicing right
s from banks who were no longer willing to
assume the substantial risks
of servicing their own MSRs.
38.
On December 19, 2013, the Consumer Financ
ial Protection Bureau (the “CFPB”),
joined by 49 states and the District
of Columbia, filed a complaint in the U.S. District Court for the
District of Columbia alleging that Ocwen and othe
r firms had violated, among other laws, the Unfair
and Deceptive Acts and Practices laws of the plai
ntiff states and the Consumer Financial Protection
Act of 2010 by deceiving consumers about their loans and engaging in illegal foreclosures.
According to the complaint, investigators found
evidence that, among other things, Ocwen gave
borrowers false or misleading information, did
not honor trial modifications begun by previous
servicers, wrongly charged fees, and denied mortgage loan modifications to eligible borrowers.
During a conference call held with
reporters that day, CFPB direct
or Richard Cordray stated that
“‘[t]oo often, trouble began as soon as the loan
was transferred to Ocwen,’” adding that “‘Ocwen
made troubled borrowers even more vulnerable to foreclosure.’”
39.
Ocwen, the CFPB, and the 49 states and Distri
ct of Columbia entered into a Consent
Judgment also filed in the U.S.
District Court for the District
of Columbia on December 19, 2013,
under which Ocwen was forced to fund a $2.1 billion
mortgage settlement for mortgage servicing
abuses (including $2 billion in first-lien prin
ciple reduction and $125 million for cash payments to
borrowers whose loans had been fo
reclosed on). According to th
e CFPB, “‘Ocwen took advantage
of borrowers at every stage of the process.’”
The $2.1 billion fine far exceeded Ocwen’s $1.5 billion
of revenue during the first nine months of 2013,
and dwarfed the $357 million in cash Ocwen then
had on its books.
40.
Under the 2013 Consent Judgment, Ocwen was
required to improve its oversight of
its attorneys, bolster training for its employees
, refrain from making collection calls when a
borrower’s application for a modification was pending, and increase its staff. The 2013 Consent
Judgment contained “Examination Findings”
indicating that Ocwen suffered from:
a. Lack of controls related to document execution
, including evidence of robo-
signing, unauthorized execution,
assignment backdating, improper
certification and notarization, chain of
title irregularities, and other related
practices affecting the in
tegrity of documents relied upon in the foreclosure
process;
b. Deficiencies in loss mitigation and lo
an modification processes, including but
not limited to:
1. Failure to effectively communicate with borrowers
regarding loss
mitigation and other foreclosure avoidance alternatives;
2. Failure to account for documents
submitted in tandem with
application for loss mitigation assistance
;
3. Lack of reasonable expedience in approving or denying loss
mitigation applications
;
4. Providing false or misleading
reasons for denial of loan
modifications
; and
5. Failure to honor the terms loan
modifications for transferred
accounts and continued efforts
to collect payments under the
original note terms.

[…]

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