July, 2016 | FORECLOSURE FRAUD | by DinSFLA

Archive | July, 2016

Nationstar Mortg. v. Rodriguez  | NV SC – Foreclosure Mediation Rule —Rodriguez discovered the note’s fraudulence on June 18,2013…

Nationstar Mortg. v. Rodriguez | NV SC – Foreclosure Mediation Rule —Rodriguez discovered the note’s fraudulence on June 18,2013…

Nationstar Mortgage LLC Et Al v Rodriguez, 132 Nev 55 by DinSFLA on Scribd

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TFH 7/31 | Securities Fraud: In Search of the Holy Grail of Foreclosure Defense

TFH 7/31 | Securities Fraud: In Search of the Holy Grail of Foreclosure Defense

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Sunday – July 31, 2016

Securities Fraud: In Search of the Holy Grail of Foreclosure Defense

Homeownership in the United States has fallen to 62.9%, the lowest rate since such statistics were kept beginning in 1965.

And that rate is expected to fall below 50% in the coming decades — and the statistics are even far worse for America’s minorities.

Homeowners’ rights have meanwhile been virtually ignored by the American political and legal systems, as evident by little discussion by either national political candidates today.

And yet a flood of even more irrational judicial decisions has been seen this year, which we will discuss on this Sunday’s radio show, by federal and big-state courts protecting pretender lenders, with virtually no real relief for defrauded homeowners yet in sight who are left to beg for loan modifications, another largely dishonest and emotionally humiliating process.

And meanwhile, securities fraud class actions have multiplied and many are still ongoing, resulting already in judgments of hundreds of millions of dollars being won by securitized trust investors.

These victories by securitized trust investors have been based on having been sold interests in defective mortgage backed securities containing pools of individual homeowner loans through misrepresentations of every kind, egregious violations of regulatory underwriting guidelines, and outright fraud.

America’s pension plans in particular have been decimated by past purchases of misrepresented mortgage backed securities in various derivative forms.

And such adjudicated securities violations have resulted in more than 200 billion dollars in additional regulatory fines against the sponsors of mortgage backed securities and their loan servicers.

But what about homeowners who were similarly defrauded by the same abusive predatory lending practices?

What about homeowners who were induced into taking out loans they could not pay back, based for instance on fraudulent appraisals, induced fraudulent loan applications, fraudulent promises of easy refinancing, fraudulent loan terms, bait and switch practices, index rigging, kickbacks, and related fraudulent promises?

How about homeowners who were denied being able to rely upon traditional lender-borrower collection and workout relationships or historic housing market stability otherwise crippled by pretender lender abuses deflating the value of their properties?

If investors were defrauded and federal regulations violated and underwriting guidelines falsified, why can’t homeowners recover damages for securities fraud for what was done to them by the same securities fraud?

The primary reason for such an anomaly or more accurately the pretense being used by our legal system to protect pretender lenders is that the rights of homeowners having mortgage loans in default are seen as governed not by federal and state securities laws with powerful remedies, but by the UCC and contract law — and even then rarely are the protections of the UCC and contract law equally applied to protect homeowners.

In large part, this inconsistency between the treatment in court of the legal rights of securitized trust investors and those of homeowners despite both being involved in virtually the same securities transactions is because mortgage loans that are securitized are treated from the perspective of property owners as containing traditional mortgages when as securitized they morph into traded securities.

The only real difference is in the nomenclature, while borrowers unknowingly are really the issuers of securities, their mortgages are really securities, securitized trusts and their collaborators are really securities dealers, and of course the investors are their investors.

The difference between the traditional mortgage and the nontraditional mortgage (security) evaporates when one considers the following hypothetical.

What if an owner of real property contacted a securities dealer and wanted to sell shares in his property or several homeowners did, pooling their properties jointly, borrowing money from solicited general public investors who were allowed to trade such shares on a trading platform?

Can there be any question in that context that the mortgage loan was indeed a traded security subject to federal and state securities laws?

What difference therefore does it make that in the non-traditional mortgage context the only distinction is that the homeowner is kept in the dark and unknowingly becomes an issuer of stock?

Is that not just another fraud?

Unfortunately, it now is clear that until and unless the homeowner is viewed by courts as an integral part of a securities transaction subject to federal and state securities laws, homeowners will continue to be remediless, continuing to become an endangered species, with devastating effects upon American Democracy, the middle class, our political system, and national social and economic stability.

But how to convince American courts that homeowners can sue for securities fraud based on the same claims that securitized investors have been winning damages on?

How to convince American courts that homeowners can recover for such things as unjust enrichment while being credited for insurance payments that partially or completely cancel their mortgage balances, rather than awarding the principals of loan servicers and their securitized trusts with “free houses”?

On this Sunday’s radio show I am going to suggest how this can be done and why it must be done, and why that effort is now absolutely critical, an inevitable battle to come in the litigation trenches.

Continuing to battle trying to use traditional UCC and contract law principles, a much too slow a process assisting too few homeowners and helping only those who can afford the insane costs of litigation today able to find competent foreclosure defense lawyers also an endangered species, for the vast majority of mortgage borrowers in the United States there will otherwise be and is no help in sight.
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UPDATE | JESINOSKI v. Countrywide Home Loans, Inc., Dist. Court, Minnesota 2016 | AWFUL, AWFUL AWFUL, AWFUL DECISION

UPDATE | JESINOSKI v. Countrywide Home Loans, Inc., Dist. Court, Minnesota 2016 | AWFUL, AWFUL AWFUL, AWFUL DECISION

 

Larry D. Jesinoski and Cheryle Jesinoski, individuals, Plaintiffs,

v.

Countrywide Home Loans, Inc., d/b/a America’s Wholesale Lender, subsidiary of Bank of America N.A.; BAC Home Loans Servicing, LP, a subsidiary of Bank of America, N.A., a Texas Limited Partnership f/k/a Countrywide Home Loans Servicing, LP; Mortgage Electronic Registration Systems, Inc., a Delaware Corporation; and John and Jane Does 1-10, Defendants.

Civil No. 11-474 (DWF/FLN).
United States District Court, D. Minnesota.
July 21, 2016.
Larry D. Jesinoski, Plaintiff, represented by Bryan R. Battina, Trepanier MacGillis Battina, P.A. & Daniel P. H. Reiff, Reiff Law Office, PLLC.

Cheryle Jesinoski, Plaintiff, represented by Bryan R. Battina, Trepanier MacGillis Battina, P.A. & Daniel P. H. Reiff, Reiff Law Office, PLLC.

Countrywide Home Loans, Inc., Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

BAC Home Loans Servicing, LP, Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

Mortgage Electronic Registration Systems, Inc., Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, District Judge.

INTRODUCTION

This matter is before the Court on a Motion for Summary Judgment brought by Defendants Countrywide Home Loans, Inc. (“Countrywide”), Bank of America, N.A. (“BANA”) and Mortgage Electronic Registration Systems, Inc. (“MERS”) (together, “Defendants”) (Doc. No. 51).[1] For the reasons set forth below, the Court grants Defendants’ motion.

BACKGROUND

I. Factual Background

This “Factual Background” section reiterates, in large part, the “Background” section included in the Court’s April 19, 2012 Memorandum Opinion and Order. (Doc. No. 23.)

On February 23, 2007, Plaintiffs Larry Jesinoski and Cheryle Jesinoski (collectively, “Plaintiffs”) refinanced their home in Eagan, Minnesota, by borrowing $611,000 from Countrywide, a predecessor-in-interest of BANA. (Doc. No. 7 (“Am. Compl.”) ¶¶ 7, 15, 16, 17; Doc. No. 55 (“Hanson Decl.”) ¶ 5, Ex. D (“L. Jesinoski Dep.”) at 125.) MERS also gained a mortgage interest in the property. (Am. Compl. ¶ 25.) Plaintiffs used the loan to pay off existing loan obligations on the property and other consumer debts. (L. Jesinoski Dep. at 114-15; Hanson Decl. ¶ 6, Ex. E (“C. Jesinoski Dep.”) at 49-50; Am. Compl. ¶ 22.)[2] The refinancing included an interest-only, adjustable-rate note. (L. Jesinoski Dep. at 137.) Plaintiffs wanted these terms because they intended to sell the property. (L. Jesinoski Dep. at 125-26, 137; C. Jesinoski Dep. at 38, 46-7.)

At the closing on February 23, 2007, Plaintiffs received and executed a Truth in Lending Act (“TILA”) Disclosure Statement and the Notice of Right to Cancel. (Doc. No. 56 (Jenkins Decl.) ¶¶ 5, 6, Exs. C & D; L. Jesinoski Dep. at 61, 67, 159; C. Jesinoski Dep. at 30-33; Hanson Decl. ¶¶ 2-3, Exs. A & B.) By signing the Notice of Right to Cancel, each Plaintiff acknowledged the “receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” (Jenkins Decl. ¶¶ 5, 6, Exs. C & D.) Per the Notice of Right to Cancel, Plaintiffs had until midnight on February 27, 2007, to rescind. (Id.) Plaintiffs did not exercise their right to cancel, and the loan funded.

In February 2010, Plaintiffs paid $3,000 to a company named Modify My Loan USA to help them modify the loan. (L. Jesinoski Dep. at 79-81; C. Jesinoski Dep. at 94-95.) The company turned out to be a scam, and Plaintiffs lost $3,000. (L. Jesinoski Dep. at 79-81.) Plaintiffs then sought modification assistance from Mark Heinzman of Financial Integrity, who originally referred Plaintiffs to Modify My Loan USA. (Id. at 86.) Plaintiffs contend that Heinzman reviewed their loan file and told them that certain disclosure statements were missing from the closing documents, which entitled Plaintiffs to rescind the loan. (Id. at 88-91.)[3] Since then, and in connection with this litigation, Heinzman submitted a declaration stating that he has no documents relating to Plaintiffs and does not recall Plaintiffs’ file. (Hanson Decl. ¶ 4, Ex. C (“Heinzman Decl.”) ¶ 4.)[4]

On February 23, 2010, Plaintiffs purported to rescind the loan by mailing a letter to “all known parties in interest.” (Am. Compl. ¶ 30; L. Jesinoski Dep., Ex. 8.) On March 16, 2010, BANA denied Plaintiffs’ request to rescind because Plaintiffs had been provided the required disclosures, as evidenced by the acknowledgments Plaintiffs signed. (Am. Compl. ¶ 32; L. Jesinoski Dep., Ex. 9.)

II. Procedural Background

On February 24, 2011, Plaintiffs filed the present action. (Doc. No. 1.) By agreement of the parties, Plaintiffs filed their Amended Complaint, in which Plaintiffs assert four causes of action: Count 1—Truth in Lending Act, 15 U.S.C. § 1601, et seq.; Count 2—Rescission of Security Interest; Count 3—Servicing a Mortgage Loan in Violation of Standards of Conduct, Minn. Stat. § 58.13; and Count 4—Plaintiffs’ Cause of Action under Minn. Stat. § 8.31. At the heart of all of Plaintiffs’ claims is their request that the Court declare the mortgage transaction rescinded and order statutory damages related to Defendants’ purported failure to rescind.

Plaintiffs do not dispute that they had an opportunity to review the loan documents before closing. (L. Jesinoski Dep. at 152-58; C. Jesinoski Dep. at 56.) Although Plaintiffs each admit to signing the acknowledgement of receipt of two copies of the Notice of Right to Cancel, they now contend that they did not each receive the correct number of copies as required by TILA’s implementing regulation, Regulation Z. (Am. Compl. ¶ 47 (citing C.F.R. §§ 226.17(b) & (d), 226.23(b)).)

Earlier in this litigation, Defendants moved for judgment on the pleadings based on TILA’s three-year statute of repose. In April 2012, the Court issued an order granting Defendants’ motion, finding that TILA required a plaintiff to file a lawsuit within the 3-year repose period, and that Plaintiffs had filed this lawsuit outside of that period. (Doc. No. 23 at 6.) The Eighth Circuit affirmed. Jesinoski v. Countrywide Home Loans, Inc., 729 F.3d 1092 (8th Cir. 2013). The United States Supreme Court reversed, holding that a borrower exercising a right to TILA rescission need only provide his lender written notice, rather than file suit, within the 3-year period. Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790, 792 (2015). The Eighth Circuit then reversed and remanded the case for further proceedings. (Doc. No. 38.) After engaging in discovery, Defendants now move for summary judgment.

DISCUSSION

I. Summary Judgment Standard

Summary judgment is appropriate if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Courts must view the evidence and all reasonable inferences in the light most favorable to the nonmoving party. Weitz Co. v. Lloyd’s of London, 574 F.3d 885, 892 (8th Cir. 2009). However, “[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1).

The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enter. Bank v. Magna Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). A party opposing a properly supported motion for summary judgment “must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).

II. TILA

Defendants move for summary judgment with respect to Plaintiffs’ claims, all of which stem from Defendants’ alleged violation of TILA—namely, failing to give Plaintiffs the required number of disclosures and rescission notices at the closing.

The purpose of TILA is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit . . .” 15 U.S.C. § 1601(a). In transactions, like the one here, secured by a principal dwelling, TILA gives borrowers an unconditional three-day right to rescind. 15 U.S.C. § 1635(a); see also id. § 1641(c) (extending rescission to assignees). The three-day rescission period begins upon the consummation of the transaction or the delivery of the required rescission notices and disclosures, whichever occurs later. Id. § 1635(a). Required disclosures must be made to “each consumer whose ownership interest is or will be subject to the security interest” and must include two copies of a notice of the right to rescind. 12 C.F.R. § 226.23(a)-(b)(1). If the creditor fails to make the required disclosures or rescission notices, the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction.” 15 U.S.C. § 1635(f); see 12 C.F.R. § 226.23(a)(3).

If a consumer acknowledges in writing that he or she received a required disclosure or notice, a rebuttable presumption of delivery is created:

Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under this subchapter by a person to whom information, forms, and a statement is required to be given pursuant to this section does no more than create a rebuttable presumption of delivery thereof.

15 U.S.C. §1635(c).

A. Number of Disclosure Statements

Plaintiffs claim that Defendants violated TILA by failing to provide them with a sufficient number of copies of the right to rescind and the disclosure statement at the closing of the loan. (Am. Compl. ¶ 47.) Defendants assert that Plaintiffs’ claims (both TILA and derivative state-law claims) fail as a matter of law because Plaintiffs signed an express acknowledgement that they received all required disclosures at closing, and they cannot rebut the legally controlling presumption of proper delivery of those disclosures.

It is undisputed that at the closing, each Plaintiff signed an acknowledgement that each received two copies of the Notice of Right to Cancel. Plaintiffs argue, however, that no presumption of proper delivery is created here because Plaintiffs acknowledged the receipt of two copies total, not the required four (two for each of the Plaintiffs). In particular, both Larry Jesinoski and Cheryle Jesinoski assert that they “read the acknowledgment . . . to mean that both” Larry and Cheryle “acknowledge receiving two notices total, not four.” (Doc. No. 60 (“L. Jesinoski Decl.”) ¶ 3; Doc. No. 61 (“C. Jesinoski Decl.”) ¶ 3.) Thus, Plaintiffs argue that they read the word “each” to mean “together,” and therefore that they collectively acknowledged the receipt of only two copies.

The Court finds this argument unavailing. The language in the Notice is unambiguous and clearly states that “[t]he undersigned each acknowledge receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” (Jenkins Decl. ¶¶ 5, 6, Exs. C & D (italics added).) Plaintiffs’ asserted interpretation is inconsistent with the language of the acknowledgment. The Court instead finds that this acknowledgement gives rise to a rebuttable presumption of proper delivery of two copies of the notice to each Plaintiff. See, e.g., Kieran v. Home Cap., Inc., Civ. No. 10-4418, 2015 WL 5123258, at *1, 3 (D. Minn. Sept. 1, 2015) (finding the creation of a rebuttable presumption of proper delivery where each borrower signed an acknowledgment stating that they each received a copy of the disclosure statement—”each of [t]he undersigned acknowledge receipt of a complete copy of this disclosure”).[5]

The only evidence provided by Plaintiffs to rebut the presumption of receipt is their testimony that they did not receive the correct number of documents. As noted in Kieran, this Court has consistently held that statements merely contradicting a prior signature are insufficient to overcome the presumption. Kieran, 2015 WL 5123258, at *3-4 (citing Gomez v. Market Home Mortg., LLC, Civ. No. 12-153, 2012 WL 1517260, at *3 (D. Minn. April 30, 2012) (agreeing with “the majority of courts that mere testimony to the contrary is insufficient to rebut the statutory presumption of proper delivery”)); see also Lee, 692 F.3d at 451 (explaining that a notice signed by both borrowers stating “[t]he undersigned each acknowledge receipt of two copies of [notice]” creates “a presumption of delivery that cannot be overcome without specific evidence demonstrating that the borrower did not receive the appropriate number of copies”); Golden v. Town & Country Credit, Civ. No. 02-3627, 2004 WL 229078, at *2 (D. Minn. Feb. 3, 2004) (finding deposition testimony insufficient to overcome presumption); Gaona v. Town & Country Credit, Civ. No. 01-44, 2001 WL 1640100, at *3 (D. Minn. Nov. 20, 2001)) (“[A]n allegation that the notices are now not contained in the closing folder is insufficient to rebut the presumption.”), aff’d in part, rev’d in part, 324 F.3d 1050 (8th Cir. 2003).

Plaintiffs, however, contend that their testimony is sufficient to rebut the presumption and create a factual issue for trial. Plaintiffs rely primarily on the Eighth Circuit’s decision in Bank of North America v. Peterson, 746 F.3d 357, 361 (8th Cir. 2014), cert. granted, judgment vacated, 135 S. Ct. 1153 (2015), and opinion vacated in part, reinstated in part, 782 F.3d 1049 (8th Cir. 2015). In Peterson, the plaintiffs acknowledged that they signed the TILA disclosure and rescission notice at their loan closing, but later submitted affidavit testimony that they had not received their TILA disclosure statements at closing. Peterson, 764 F.3d at 361. The Eighth Circuit determined that this testimony was sufficient to overcome the presumption of proper delivery. Id. The facts of this case, however, are distinguishable from those in Peterson. In particular, the plaintiffs in Peterson testified that at the closing, the agent took the documents after they had signed them and did not give them any copies. Id. Here, it is undisputed that Plaintiffs left with copies of their closing documents. (L. Jesinoski Dep. at 94-95.) In addition, Plaintiffs did not testify unequivocally that they did not each receive two copies of the rescission notice. Instead, they have testified that they do not know what they received. (See, e.g., id. at 161.) Moreover, Cheryle Jesinoski testified that she did not look through the closing documents at the time of closing, and therefore cannot attest to whether the required notices were included. (C. Jesinoski Dep. at 85.)[6]

Based on the evidence in the record, the Court determines that the facts of this case are more line with cases that have found that self-serving assertions of non-delivery do not defeat the presumption. Indeed, the Court agrees with the reasoning in Kieran, which granted summary judgment in favor of defendants under similar facts, and which was decided after the Eighth Circuit issued its decision in Peterson. Accordingly, Plaintiffs have not overcome the rebuttable presumption of proper delivery of TILA notices, and Defendants’ motion for summary judgment is granted as to the Plaintiffs’ TILA claims.

B. Ability to Tender

Defendants also argue that Plaintiffs’ claims fails as a matter of law on a second independent basis—Plaintiffs’ admission that they do not have the present ability to tender the amount of the loan proceeds. Rescission under TILA is conditioned on repayment of the amounts advanced by the lender. See Yamamoto v. Bank of N.Y., 329 F.3d 1167, 1170 (9th Cir. 2003). This Court has concluded that it is appropriate to dismiss rescission claims under TILA at the pleading stage based on a plaintiff’s failure to allege an ability to tender loan proceeds. See, e.g., Franz v. BAC Home Loans Servicing, LP, Civ. No. 10-2025, 2011 WL 846835, at *3 (D. Minn. Mar. 8, 2011); Hintz v. JP Morgan Chase Bank, Civ. No. 10-119, 2010 WL 4220486, at *4 (D. Minn. Oct. 20, 2010). In addition, courts have granted summary judgment in favor of defendants where the evidence shows that a TILA plaintiff cannot demonstrate an ability to tender the amount borrowed. See, e.g., Am. Mortg. Network, Inc. v. Shelton, 486 F.3d 815, 822 (4th Cir. 2007) (affirming grant of summary judgment for defendants on TILA rescission claim “given the appellants’ inability to tender payment of the loan amount”); Taylor v. Deutsche Bank Nat’l Trust Co., Civ. No. 10-149, 2010 WL 4103305, at *5 (E.D. Va. Oct. 18, 2010) (granting summary judgment on TILA rescission claim where plaintiff could not show ability to tender funds aside from selling the house “as a last resort”).

Plaintiffs argue that the Supreme Court in Jesinoski eliminated tender as a requirement for rescission under TILA. The Court disagrees. In Jesinoski, the Supreme Court reached the narrow issue of whether Plaintiffs had to file a lawsuit to enforce a rescission under 15 U.S.C. § 1635, or merely deliver a rescission notice, within three years of the loan transaction. Jesinoski, 135 S. Ct. at 792-93. The Supreme Court determined that a borrower need only provide written notice to a lender in order to exercise a right to rescind. Id. The Court discerns nothing in the Supreme Court’s opinion that would override TILA’s tender requirement. Specifically, under 15 U.S.C. § 1635(b), a borrower must at some point tender the loan proceeds to the lender.[7] Plaintiffs testified that they do not presently have the ability to tender back the loan proceeds. (L. Jesinoski Dep. at 54, 202; C. Jesinoski Dep. at 118-119.) Because Plaintiffs have failed to point to evidence creating a genuine issue of fact that they could tender the unpaid balance of the loan in the event the Court granted them rescission, their TILA rescission claim fails as a matter of law on this additional ground.[8]

Plaintiffs argue that if the Court conditions rescission on Plaintiffs’ tender, the amount of tender would be exceeded, and therefore eliminated, by Plaintiffs’ damages. In particular, Plaintiffs claim over $800,000 in damages (namely, attorney fees), and contend that this amount would negate any amount tendered. Plaintiffs, however, have not cited to any legal authority that would allow Plaintiffs to rely on the potential recovery of fees to satisfy their tender obligation. Moreover, Plaintiffs’ argument presumes that they will prevail on their TILA claims, a presumption that this Order forecloses.

C. Damages

Next, Defendants argue that Plaintiffs are not entitled to TILA statutory damages allegedly flowing from Defendants’ decision not to rescind because there was no TILA violation in the first instance. Plaintiffs argue that their damages claim is separate and distinct from their TILA rescission claim.

For the reasons discussed above, Plaintiffs’ TILA claim fails as a matter of law. Without a TILA violation, Plaintiffs cannot recover statutory damages based Defendants refusal to rescind the loan.

D. State-law Claims

Plaintiffs’ state-law claims under Minn. Stat. § 58.13 and Minnesota’s Private Attorney General statute, Minn. Stat. § 8.31, are derivative of Plaintiffs’ TILA rescission claim. Thus, because Plaintiffs’ TILA claim fails as a matter law, so do their state-law claims.

ORDER

Based upon the foregoing, IT IS HEREBY ORDERED that:

1. Defendants’ Motion for Summary Judgment (Doc. No. [51]) is GRANTED.

2. Plaintiffs’ Amended Complaint (Doc. No. [7]) is DISMISSED WITH PREJUDICE.

LET JUDGMENT BE ENTERED ACCORDINGLY.

[1] According to Defendants, Countrywide was acquired by BANA in 2008, and became BAC Home Loans Servicing, LP (“BACHLS”), and in July 2011, BACHLS merged with BANA. (Doc. No. 15 at 1 n.1.) Thus, the only two defendants in this case are BANA and MERS.

[2] Larry Jesinoski testified that he had been involved in about a half a dozen mortgage loan closings, at least three of which were refinancing loans, and that he is familiar with the loan closing process. (L. Jesinoski Dep. at 150-51.)

[3] Plaintiffs claim that upon leaving the loan closing they were given a copy of the closing documents, and then brought the documents straight home and placed them in L. Jesinoski’s unlocked file drawer, where they remained until they brought the documents to Heinzman.

[4] At oral argument, counsel for Plaintiffs requested leave to depose Heinzman in the event that the Court views his testimony as determinative. The Court denies the request for two reasons. First, it appears that Plaintiffs had ample opportunity to notice Heinzman’s deposition during the discovery period, but did not do so. Second, Heinzman’s testimony will not affect the outcome of the pending motion, and therefore, the request is moot.

[5] See also, e.g., Lee v. Countrywide Home Loans, Inc., 692 F.3d 442, 451 (6th Cir. 2012) (rebuttable presumption arose where each party signed an acknowledgement of receipt of two copies); Hendricksen v. Countrywide Home Loans, Civ. No. 09-82, 2010 WL 2553589, at *4 (W.D. Va. June 24, 2010) (rebuttable presumption of delivery of two copies of TILA disclosure arose where plaintiffs each signed disclosure stating “[t]he undersigned further acknowledge receipt of a copy of this Disclosure for keeping prior to consummation”).

[6] This case is also distinguishable from Stutzka v. McCarville, 420 F.3d 757, 762 (8th Cir. 2005), a case in which a borrower’s assertion of non-delivery was sufficient to overcome the statutory presumption. In Stutzka, the plaintiffs signed acknowledgements that they received required disclosures but left the closing without any documents. Stutzka, 420 F.3d at 776.

[7] TILA follows a statutorily prescribed sequence of events for rescission that specifically discusses the lender performing before the borrower. See § 1635(b). However, TILA also states that “[t]he procedures prescribed by this subsection shall apply except when otherwise ordered by a court.” Id. Considering the facts of this case, it is entirely appropriate to require Plaintiffs to tender the loan proceeds to Defendants before requiring Defendants to surrender their security interest in the loan.

[8] The Court acknowledges that there is disagreement in the District over whether a borrower asserting a rescission claim must tender, or allege an ability to tender, before seeking rescission. See, e.g. Tacheny v. M&I Marshall & Ilsley Bank, Civ. No. 10-2067, 2011 WL 1657877, at *4 (D. Minn. Apr. 29, 2011) (respectfully disagreeing with courts that have held that, in order to state a claim for rescission under TILA, a borrower must allege a present ability to tender). However, there is no dispute that to effect rescission under § 1635(b), a borrower must tender the loan proceeds. Here, the record demonstrates that Plaintiffs are unable to tender. Therefore, their rescission claim fails on summary judgment.

 

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Mortgage mess puts homeowner on brink of foreclosure

Mortgage mess puts homeowner on brink of foreclosure

ABC7NY-

If you have a home mortgage, it’s very probably your loan will change hands two or even three times, going from one loan servicing company to another. But what does that mean for you?

Deb Conte says she felt like she was going to have a heart attack after getting a foreclosure warning from her mortgage company.

She’s lived in her home for nearly 20 years. The single parent raised her daughter here and is now struggling to put Jacqueline through art school.

Last year DiTech took over her mortgage. She says nearly overnight her monthly mortgage ballooned from around $800 to nearly $2,000.

[ABC7NY]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Disabled woman faces foreclosure on home she doesn’t own

Disabled woman faces foreclosure on home she doesn’t own

King5-

Struggling to make ends meet on a fixed income and facing a major surgery, she needed an inexpensive place to live with her autistic son. In April she says she rented a mobile home through a homeless services organization.

Two months later, she says a Whatcom County Sheriff’s Office deputy was nailing an eviction notice to the door because the trailer was being foreclosed upon.

“This is just not right,” said Morisette. “With my health condition, I can’t be on the streets, especially with my son.”

[KING 5]

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GMAC v Del Valle | FL Cir. Court – Albertelli Law Order to Show Cause – Robo-Signing…Use of Disbarred David J. Stern Assignment During Trial

GMAC v Del Valle | FL Cir. Court – Albertelli Law Order to Show Cause – Robo-Signing…Use of Disbarred David J. Stern Assignment During Trial

Excellent job to Attorney Kenneth Eric Trent!

IN THE CIRCUIT COURT OF SEVENTEENTH JUDICIAL CIRCUIT
IN AND FOR BROWARD COUNTY, FLORIDA

GMAC MORTGAGE, LLC

Plaintiff,

v.

MYRIAM E. DEL VALLE

Defendant.

Order to Show Cause by DinSFLA on Scribd

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Sanabria v. PENNYMAC MORTGAGE INVESTMENT TRUST HOLDINGS I LLC | FL 2DCA- “the copy of the note attached to the complaint does not contain Defendant’s signature and is not the note signed by Defendant.”

Sanabria v. PENNYMAC MORTGAGE INVESTMENT TRUST HOLDINGS I LLC | FL 2DCA- “the copy of the note attached to the complaint does not contain Defendant’s signature and is not the note signed by Defendant.”

 

LUZ SANABRIA and GAETANO PIRO, Appellants,
v.
PENNYMAC MORTGAGE INVESTMENT TRUST HOLDINGS I LLC. Appellee.

Case No. 2D15-866.
District Court of Appeal of Florida, Second District.
Opinion filed July 15, 2016.
Appeal from the Circuit Court for Manatee County; Thomas M. Gallen, Senior Judge.

Danny E. Eskanos, Clearwater, for Appellants.

Alen H. Hsu of Blank Rome, LLP, Boca Raton; and Michelle Gevias, Paul M. Messina and Manuel S. Hiraldo of Blank Rome LLP, Tampa, for Appellee.

LUCAS, Judge.

Luz Sanabria and Gaetano Piro (the homeowners) appeal the entry of a final judgment of foreclosure in favor of Pennymac Mortgage Investment Trust Holdings I, LLC (Pennymac Trust). The homeowners raise several issues on appeal. Although we are precluded from reaching the merits of their arguments concerning Pennymac Trust’s standing, we nevertheless reverse the final judgment of foreclosure because the circuit court erroneously found that the homeowners had failed to sufficiently plead a properly raised affirmative defense challenging the authenticity of Ms. Sanabria’s signature on a promissory note.

I.

In 2007, in connection with the purchase of their home in Manatee County,

Ms. Sanabria executed a promissory note in favor of American Lending Group, Inc., and, along with her husband, Mr. Piro, a mortgage securing that note in favor of Mortgage Electronic Service, as nominee for American Lending Group. In February 2012, Pennymac Trust filed a complaint against the homeowners, claiming that the homeowners had defaulted on the note and that Pennymac Trust had assumed the right to enforce their note and mortgage through various assignments that, for brevity’s sake, we need not recount. The complaint proceeded, in a somewhat convoluted fashion, through different iterations until it reached the operative pleading, a second amended complaint, and the plaintiff filed what purported to be a copy of the borrower’s original note.[1]

In response to the second amended complaint, the homeowners alleged, as their ninth affirmative defense, the following:

With regard to all counts of the Complaint, the Plaintiff’s claims are barred in whole or in part because the Defendants affirmatively question the veracity and authenticity of any possible endorsement made on any purported note or allonge the Plaintiff may produce pursuant to Fla. Stat. § 673.3081 (2011), assuming, without conceding, that such endorsement exists. Specifically, the Defendants question the veracity and authenticity of any possible endorsement because: (1) there is no mention in the Complaint as to who the endorser is; (2) there is no mention in the Complaint as to what authority the purported endorser may so endorse, (3) the indorsement wasn’t on the documents attached to the original complaint, and (4) the copy of the note attached to the complaint does not contain Defendant’s signature and is not the note signed by Defendant.

(Emphasis added.) Pennymac Trust filed a reply to this defense which, with respect to the issue of Ms. Sanabria’s signature, asserted that the homeowners had failed to plead an issue of “fraud” with sufficient particularity and that there is no proof “that any signature . . . is fraudulent.” The case then proceeded to a nonjury trial on October 14, 2014.

The homeowners’ case-in-chief focused squarely on their claim that Pennymac Trust’s note was not the one Ms. Sanabria signed. The homeowners called as a witness Michael Infanti, Esq., an attorney with the law firm that had performed their original mortgage closing when they purchased the home. Mr. Infanti produced a copy of the note kept by his law firm from the closing. The copy of the note produced by Mr. Infanti contained five pages, with Ms. Sanabria’s signature appearing on the fifth page. In contrast, the copy of the note produced by Pennymac Trust contained six pages, and Ms. Sanabria’s signature appeared on the sixth page. Ms. Sanabria then testified that the signature and initials appearing on Pennymac Trust’s copy of the note were not hers and that its note contained different language than what was in Mr. Infanti’s copy of the note. Finally, the homeowners attempted to call as an expert witness a forensic document examiner, Ms. Jean J. Berrie-Perrino. The court precluded Ms. Berrie-Perrino from testifying, ruling that the homeowners’ defense had not been adequately pleaded. According to the court, the homeowners had essentially waived any defense regarding the authenticity of the note’s signature by failing to specifically plead that issue, citing in support of its ruling the case of Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932 (Fla. 4th DCA 2010). However, the homeowners proffered the substance of Ms. Berrie-Perrino’s testimony, which would have been that Ms. Sanabria’s signature on Pennymac Trust’s copy of the note and the signature of Ms. Sanabria on Mr. Infanti’s copy of the note from the closing were not executed by the same person.

II.

The circuit court’s ruling, which deemed the homeowners’ authenticity defense as having been improperly pleaded, was premised on the sufficiency of their pleading. We review such an issue de novo. See Ladner v. AmSouth Bank, 32 So. 3d 99, 103 (Fla. 2d DCA 2009) (“The determination of the sufficiency of a pleading is a matter of law and subject to a de novo review.”); Mercedes Lighting & Elec. Supply, Inc. v. Dep’t of Gen. Servs., 560 So. 2d 272, 277 (Fla. 1st DCA 1990) (“[A] decision whether a pleading or motion is legally sufficient involves a question of law subject to de novo review by the appellate court.”).

Throughout the proceedings below and in this appeal, the parties and the circuit court have framed the sufficiency of the homeowners’ defense in terms of section 673.3081, Florida Statutes (2012). Cf. Riggs, 36 So. 3d at 933 (quoting statute and affirming summary judgment in favor of loan servicing company where authentication of the note was not at issue). That statute, a part of Florida’s Uniform Commercial Code, includes what is arguably a heightened civil pleading requirement when a dispute over a signature’s authenticity is raised in connection with a negotiable instrument such as a mortgage note. Section 673.3081(1) reads, in relevant part:

In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature.

(Emphasis added.)

Pennymac Trust likens the statute’s passing reference to “specifically” denying a signature’s authenticity to the specificity required to plead a cause of action for fraud under Florida Rule of Civil Procedure 1.120(b): “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with such particularity as the circumstances may permit.” The circuit court—and to a large measure, the homeowners, as well—appeared to accept Pennymac Trust’s underlying premise that section 673.3081(1) alters civil pleading practice by imposing a heightened specificity requirement when the authenticity of a note’s signature is challenged. Proceeding under that assumption, the homeowners argue that they met this heightened standard of pleading with their ninth affirmative defense.

At the outset, we note the peculiar dilemma of applying a statutory provision that purports to prescribe an aspect of civil practice or procedure. Cf. Massey v. David, 979 So. 2d 931, 937 (Fla. 2008) (“Moreover, where [the Florida Supreme Court] has promulgated rules that relate to practice and procedure, and a statute provides a contrary practice or procedure, the statute is unconstitutional to the extent of the conflict.”); Caple v. Tuttle’s Design-Build, Inc., 753 So. 2d 49, 53 (Fla. 2000) (“The distinction between substantive and procedural law is neither simple nor certain . . . .”); In re Commitment of Cartwright, 870 So. 2d 152, 158 (Fla. 2d DCA 2004) (“The fact that a statutory provision could appropriately be labeled `procedural’ does not necessarily mean that it violates article V, section 2(a) [of the Florida constitution].”); Adhin v. First Horizon Home Loans, 44 So. 3d 1245, 1251 (Fla. 5th DCA 2010) (recognizing that where “a statute contains some procedural aspects, but those provisions are intimately intertwined with the substantive rights created by the statute, the statute will not be viewed as impermissibly intruding on the practice and procedure of the courts in a constitutional sense”).[2]

Regardless, under either a general or a heightened, “specific” pleading standard, we are satisfied that the authenticity of Ms. Sanabria’s signature was an issue that was adequately pleaded and presented for adjudication. None of the cases Pennymac Trust cites in support of affirmance persuades us otherwise. Indeed, the few Florida decisions to address the pleading requirement that section 673.3081(1) appears to impose only arise in the context of a defendant who failed to plead the issue of authenticity as an affirmative defense. See, e.g., Davis v. Timeshare Travel Int’l, Inc., 489 So. 2d 47, 48-49 (Fla. 2d DCA 1986) (noting, in dicta, that guarantor’s equivocating testimony about her signature could not overcome statutory presumption of its validity where she had only pleaded a general denial to the lender’s claims within her answer); Riggs, 36 So. 3d at 933 (“Nothing in the pleadings placed the authenticity of Alday’s signature at issue.”); Lipton v. Se. First Nat’l Bank of Miami, 343 So. 2d 927, 928 (Fla. 3d DCA 1977) (holding that general denials in response to a bank’s complaint failed to meet the requirements of section 673.307(1) and so the borrower’s signatures were deemed admitted); Ferris v. Nichols, 245 So. 2d 660, 661 (Fla. 4th DCA 1971) (observing that defendant, who asserted no affirmative defenses, failed to plead the issue of a signature’s authenticity; “[h]ad the defendant desired to deny that he signed the note, he should have done so by a specific denial addressed to the appropriate allegations in the complaint”).

Here, however, the homeowners fashioned an affirmative defense that plainly denied the authenticity of Ms. Sanabria’s signature on a specific document: “the copy of the note attached to the complaint does not contain Defendant’s signature and is not the note signed by Defendant.” The court and the parties were adequately apprised by this defensive pleading that the homeowners were challenging the veracity of Ms. Sanabria’s signature on the note Pennymac Trust sought to enforce in foreclosure. Cf. VonDrasek v. City of St. Petersburg, 777 So. 2d 989, 991 n.1 (Fla. 2d DCA 2000) (quoting commentary to rule 1.110: “The contents of a pleading . . . should clearly and adequately inform the judge and the opposing party . . . of the position of the pleader”). The homeowners sufficiently alleged their denial of a signature’s authenticity in their affirmative defense, and they were entitled to have that issue decided in their case.

III.

The circuit court erred when it ruled that the issue of Ms. Sanabria’s signature’s authenticity had not been adequately pleaded for the court’s determination. Accordingly, we reverse the final judgment of foreclosure and remand this case for further proceedings.

Reversed and remanded.

CRENSHAW, J., Concurs.

KHOUZAM, J., Concurs specially with opinion.

KHOUZAM, Judge, Concurring specially.

I agree fully with the result of the majority opinion. I write only to note that the majority’s discussion of the constitutionality of section 673.3081(1) has no bearing on the outcome of this case in light of our determination that the homeowners sufficiently raised and pleaded their authenticity defense under either pleading standard.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

[1] There was, it seems, a degree of confusion on the plaintiff’s part concerning the precise “Pennymac” entity—whether it was Pennymac Trust or a similarly named (but presumably separate) entity known as Pennymac Corporation— that had the right to enforce the homeowners’ note and pursue this litigation. Through pleading amendments and an order of substitution, the plaintiff’s identity vacillated back and forth at various times in the case below. We cannot attempt to unravel this confusion because the homeowners failed to adequately preserve the issue of plaintiff’s standing in their motion for involuntary dismissal. See Franklin v. Patterson-Franklin, 98 So. 3d 732, 738 (Fla. 2d DCA 2012) (“In order to be preserved for further review by a higher court, an issue must be presented to the lower court and the specific legal argument or ground to be argued on appeal or review must be part of that presentation if it is to be considered preserved.” (quoting Sunset Harbour Condo. Ass’n v. Robbins, 914 So. 2d 925, 928 (Fla. 2005))). We trust that, on remand, the circuit court will attend to the question of the plaintiff’s standing at the time the lawsuit was filed, should it be raised again. See Corrigan v. Bank of America, N.A., 41 Fla. L. Weekly D345, D346 (Fla. 2d DCA Feb. 5, 2016). For ease of reference, in this opinion we will simply refer to the plaintiff below as Pennymac Trust, the appellant in the case at bar.

[2] We note that nothing within rule 1.110 (governing answers), rule 1.120 (pleading “special matters,” including fraud), or the relatively recently enacted rule 1.115 (pleading mortgage foreclosures) mentions a heightened or more specific pleading standard in cases where a litigant wishes to challenge the authenticity of a signature.

 

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WHITE PAPER | GUIDING PRINCIPLES FOR THE FUTURE OF LOSS MITIGATION: HOW THE LESSONS LEARNED FROM THE FINANCIAL CRISIS CAN INFLUENCE THE PATH FORWARD

WHITE PAPER | GUIDING PRINCIPLES FOR THE FUTURE OF LOSS MITIGATION: HOW THE LESSONS LEARNED FROM THE FINANCIAL CRISIS CAN INFLUENCE THE PATH FORWARD

GUIDING PRINCIPLES
FOR THE FUTURE OF
LOSS MITIGATION:
HOW THE LESSONS LEARNED FROM
THE FINANCIAL CRISIS
CAN
INFLUENCE THE PATH FORWARD

EXECUTIVE SUMMARY
This white paper has been prepared by the U.S. Department of the Treasury (Treasury) in conjunction with the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) —together the Agencies —to continue the collaborative efforts of the past seven years to stabilize the housing market and help struggling homeowners recover from the financial crisis. With the termination of crisis-era programs at the end of this year, the Agencies are working with stakeholders to maintain strong loss mitigation programs going for
ward. This white paper examines the evolution of loss mitigation programs administered by the Agencies, and discusses the lessons learned from such programs. The paper also lays out five guiding principles that should be a foundation for future loss mitigation programs: accessibility, affordability, sustainability, transparency, and accountability.

The financial crisis of 2008 revealed that the mortgage servicing industry was ill-equipped to adequately respond to the needs of struggling homeowners. Indeed, there was no standard approach among mortgage servicers and investors about how to respond to homeowners who wanted to continue making payments, but were in need of mortgage assistance. Most solutions offered by servicers simply added unpaid interest and fees to the mortgage balance, which often resulted in higher—and thereby less sustainable—payments for homeowners, regardless of a hardship.

In early 2009, a government-sponsored program—Making Home Affordable (MHA)—was established to provide foreclosure alternatives to homeowners impacted by the financial crisis. The Home Affordable Modification Program (HAMP), the first and largest program under MHA, provided a standard for mortgage modifications that crossed mortgage servicer and investor types, with the goal of reducing struggling homeowners’ monthly mortgage payments to an affordable and sustainable amount.

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HERNANDEZ v WILLIAMS, ZINMAN  & PARHAM PC | FDCPA CLASS ACTION DISMISSAL REVERSED BY 9TH CIRCUIT

HERNANDEZ v WILLIAMS, ZINMAN & PARHAM PC | FDCPA CLASS ACTION DISMISSAL REVERSED BY 9TH CIRCUIT

H/T Dave Krieger

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

MARIA HERNANDEZ, on
behalf of herself and all
others similarly situated,
Plaintiff-Appellant,

v.

WILLIAMS, ZINMAN & ARHAM PC,
Defendant-Appellee.

Appeal from the United States District Court
for the District of Arizona
Stephen M. McNamee, District Judge, Presiding

Argued and Submitted March 17, 2016
San Francisco, California

Filed July 20, 2016

Before: John T. Noonan, Ronald M. Gould,
and Michelle T. Friedland, Circuit Judges.

Opinion by Judge Friedland

SUMMARY*

Fair Debt Collection Practices Act The panel reversed the district court’s summary judgment in favor of the defendant in an action under the Fair Debt Collection Practices Act.

The Act requires that within five days of “the initial communication” with a consumer about the collection of a debt, a debt collector must send the consumer a notice containing specific disclosures. The panel held that this requirement, set forth in 15 U.S.C. § 1692g(a), does not apply only to the initial debt collector that tries to collect, but also applies to subsequent collectors that communicate about the same debt.

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TFH 7/24 | Foreclosure Workshop #17: Ke Kailani Partners v. Michael J. Fuchs — A Yankee in King Kamehameha’s Court

TFH 7/24 | Foreclosure Workshop #17: Ke Kailani Partners v. Michael J. Fuchs — A Yankee in King Kamehameha’s Court

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

.

Sunday – July 24, 2016

Foreclosure Workshop #17: Ke Kailani Partners v. Michael J. Fuchs — A Yankee in King Kamehameha’s Court

This is going to be an incredible show, sharing unusual insight into the inner workings of America’s appellate courts in foreclosure cases.

Hurricane Darby, however, is expected to possibly arrive in Honolulu beforehand sometime Saturday evening, as a result of which apologies if we lose electrical power and the show needs to be rescheduled for the following Sunday, but presently we are planning to be on the air nationwide this Sunday as usual, bringing our listeners unique firsthand knowledge of what is going on in this Nation’s Courts.

We will update you if necessary on our website at www.foreclosurehour.com.

Our co-host John Waihee is a delegate attending the Democratic National Convention in Philadelphia, but plans to be with us nevertheless by telephone.

Don’t miss this one.
~

 

.
Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY 3:00 PM HAWAII 6:00 PM PACIFIC 9:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND ON iHEART RADIO The Foreclosure Hour 12

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HSBC Bankers Are First Individuals Charged in U.S. Currency Case

HSBC Bankers Are First Individuals Charged in U.S. Currency Case

Bloomberg-

Federal agents surprised an HSBC Holdings Plc executive as he prepared to fly out of New York’s Kennedy airport around 7:30 p.m. Tuesday, arresting him for an alleged front-running scheme involving a $3.5 billion currency transaction in 2011.

Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was held in a Brooklyn jail overnight and will appear in court Wednesday, according to prosecutors. The U.S. unsealed a complaint against him and Stuart Scott, the bank’s former head of currency trading in Europe, making them the first individuals to be charged in the long-running probe.

The arrest and charges are a coup for the Justice Department, which has struggled to build cases against individuals in its investigation into foreign-exchange trading at global banks. U.S. prosecutors once had so much confidence in the quality of evidence they were gathering thanks to undercover cooperators that in September 2014, then-Attorney General Eric Holder said he expected charges against individuals within months. The U.K. Serious Fraud Office also found it difficult to make cases against currency traders and announced in March that it was dropping its efforts.

[BLOOMBERG]

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Washington state invalidates common mortgage provision

Washington state invalidates common mortgage provision

The Olympian-

Laura Jordan came home from work one day to find herself locked out. She had missed two mortgage payments, and the company servicing her loan had changed the locks without warning.

In a ruling this month, the Washington Supreme Court found that action illegal — a decision that clears the way for a federal class-action case that Jordan brought on behalf of at least 3,600 borrowers in the state, and one that could have broad ramifications on how some lenders respond when homeowners miss payments.

“This is criminal trespass and theft, and it should be treated as such,” said Sheila O’Sullivan, executive director of the Northwest Consumer Law Center. “There’s no basis for them to walk in and change the locks on a person’s home until they have foreclosed. It’s an important ruling.”

The mortgage industry is wrestling with the significance of the 6-3 ruling, which found that provisions standard in mortgage documents around the country conflict with state law. The provisions allow for lenders to change locks, winterize homes or take other steps to preserve the value of properties that are in default or abandoned.

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CFPB Takes Action to Halt Illegal Debt Collection Practices By Lawsuit Mill and Debt Buyer

CFPB Takes Action to Halt Illegal Debt Collection Practices By Lawsuit Mill and Debt Buyer

CFPB-

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today ordered the debt collection law firm Pressler & Pressler, LLP, two principal partners, and New Century Financial Services, Inc., a debt buyer, to stop churning out unfair and deceptive debt collection lawsuits based on flimsy or nonexistent evidence. The consent orders bar the companies and individuals from illegal practices that can deceive or intimidate consumers, such as filing lawsuits without determining if debts in question are valid. The orders also require the firm and the named partners to pay $1 million, and New Century to pay $1.5 million to the Bureau’s Civil Penalty Fund.

“For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray. “Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”

Pressler & Pressler is a New Jersey-based law firm that collects consumers’ debts for creditors through lawsuits and other means. New Century Financial Services, also based in New Jersey, buys and collects defaulted consumer debts and hands off those accounts to Pressler & Pressler for collection. To collect alleged debts on behalf of New Century and others, Pressler & Pressler filed hundreds of thousands of lawsuits against consumers.  Sheldon H. Pressler and Gerard J. Felt, partners of the firm, each participated in the firm’s debt collection litigation practices.

The CFPB found that to mass-produce these lawsuits, Pressler & Pressler used an automated claim-preparation system and non-attorney support staff to determine which consumers to sue. Attorneys generally spent less than a few minutes, sometimes less than 30 seconds, reviewing each case before initiating a lawsuit. This process allowed the firm to generate and file hundreds of thousands of lawsuits against consumers in New Jersey, New York, and Pennsylvania between 2009 and 2014. The CFPB found that the respondents violated the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace. Specifically, the CFPB found that Pressler & Pressler, the firm’s named partners, and New Century Financial Services:

  • Made false or empty allegations about consumer debts: The CFPB found that the firm, the named partners, and New Century filed lawsuits against consumers without sufficient basis. Neither the firm nor New Century reviewed documents supporting the validity of debts.
  • Filed lawsuits based on unreliable or false information: Some consumers had previously challenged the validity or accuracy of the debts, but the firm or New Century did not obtain or review information to justify their claims. The firm and New Century also filed suits and collected debt knowing that some account portfolios targeted for lawsuits contained unreliable or false information.
  • Harassed consumers with unsubstantiated court filings: The CFPB found that the firm, the named partners, and New Century filed collection suits generated mainly by automated processes that relied on summary data. The firm won the vast majority of the lawsuits by default when consumers did not defend themselves, even though neither Pressler & Pressler nor New Century had verified that the debts were actually owed.

Enforcement Action

Under the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals that engage in unfair, deceptive, or abusive acts or practices. The CFPB also has authority over debt collection practices under the Fair Debt Collection Practices Act. The CFPB orders require that Pressler & Pressler, the firm’s named partners, and New Century Financial Services must:

  • Stop filing lawsuits with unsubstantiated claims: Pressler & Pressler, the named partners, and New Century cannot file lawsuits or threaten to sue to collect debts unless they obtain and review specific account-level documents and information showing the debt is accurate and enforceable.
  • Ensure accurate court filings: The firm, the named partners, and New Century may not use affidavits as evidence to collect debts unless they accurately describe relevant facts including that the individual executing the affidavit has personal knowledge of the debt, or, if not, has reviewed documentation related to the debt. The firm must also keep an electronic record showing it is following proper procedures.
  • Pay civil penalties: The firm and the named partners must pay a penalty of $1 million to the CFPB’s Civil Penalty Fund. New Century must pay a penalty of $1.5 million.

The CFPB’s order against Pressler & Pressler and the named partners is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_consent-order-pressler-pressler-llp-sheldon-h-pressler-and-gerard-j-felt.pdf 

The CFPB’s order against New Century Financial Services is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_consent-order_new-century-financial-services-inc.pdf 

This action continues the Bureau’s work to address illegal debt collection practices across the consumer financial marketplace, including companies that sell, buy, and collect debt. In recent separate enforcement actions, the CFPB has ordered large banks, credit card issuers, debt buyers, and firms to overhaul their debt collection practices and refund millions to harmed consumers. The Bureau will continue working to ensure all players in the collections market treat consumers fairly.

###
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Source: http://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-halt-illegal-debt-collection-practices-lawsuit-mill-and-debt-buyer/

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CFPB Sanctions Law Firm and Debt Buyer For Failing to Review Account Documentation

CFPB Sanctions Law Firm and Debt Buyer For Failing to Review Account Documentation

Lexology-

On April 25, the Consumer Financial Protection Bureau (CFPB) entered an enforcement order against New Jersey law firm Pressler and Pressler and its debt-buyer client, New Century Financial Services, for pursuing hundreds of thousands of debt collection lawsuits without reviewing the underlying documentation supporting the existence of a debt. The law firm agreed to pay a $1 million fine, the debt-buyer client agreed to pay a $1.5 million fine, and both agreed to extensive recordkeeping and compliance measures going forward. These recordkeeping and compliance measures include an obligation to file account information in the court file of defaulted debt-collection cases before obtaining a final judgment, and to do no prejudgment discovery of a debtor’s assets.

The sanction stemmed from the manner in which the debt-buyer client communicated with its law firm. Rather than sending account files of the purchased debts, the client would electronically send spreadsheets showing debtor information and amounts of debts to the law firm. The law firm, which was staffed by over 300 employees, only 19 of which were attorneys, would then use proprietary software to turn the information in the spreadsheets into civil complaints. Neither the debt-buyer client, nor the non-legal staff, nor the attorneys signing the complaints, would review the original account-level documentation substantiating the debt. As a result of these practices, the CFPB found the law firm filed an untold number of lawsuits based on false or unreliable information.

[LEXOLOGY]

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Deutsche Bank Slams ‘Generalized’ Claims In RMBS Dispute

Deutsche Bank Slams ‘Generalized’ Claims In RMBS Dispute

LAW 360 –

Deutsche Bank National Trust Co. on Friday knocked an amended complaint in a New York federal suit accusing it of failing to protect investors from over $1 trillion in losses due to poorly underwritten residential mortgage-backed securities, arguing in a memorandum supporting a motion to dismiss that there weren’t sufficient allegations of “actual knowledge.”

BlackRock Inc. claims that Deutsche Bank knew that 62 Delaware statutory trusts created between 2004 and 2008 contained faulty loans that did not conform to representations and warranties by the originators and…

[LAW 360]

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Marsden v. BAC HOME LOANS SERVICING, LP | FL 4DCA – Because the bank did not present any evidence of the amount of interest owed, we reverse and remand for the trial court to amend the final judgment and remove any calculations for interest

Marsden v. BAC HOME LOANS SERVICING, LP | FL 4DCA – Because the bank did not present any evidence of the amount of interest owed, we reverse and remand for the trial court to amend the final judgment and remove any calculations for interest

 

MARIO MARSDEN and ROSAL MARSDEN, Appellants,
v.
BAC HOME LOANS SERVICING, L.P. f/k/a COUNTRYWIDE HOME LOANS SERVICING, L.P.; NEWPORT ISLES PROPERTY OWNERS ASSOCIATION, INC.; PORTOFINO ISLES HOMEOWNERS ASSOCIATION INC.; and Unknown Tenant(s) In Possession Of The Subject Property, Appellees.

No. 4D14-1623.
District Court of Appeal of Florida, Fourth District.
July 13, 2016.
Appeal from the Circuit Court for the Nineteenth Judicial Circuit, St. Lucie County; James W. Midelis, Judge; L.T. Case No. 562009CA005997.

Thomas Erskine Ice of Ice Appellate, Royal Palm Beach, for appellants.

Adam M. Topel of Liebler Gonzalez & Portuondo, for appellee Bank of America, N.A., successor by merger to BAC Home Loans Servicing, L.P., f/k/a Countrywide Home Loans Servicing, L.P.

CIKLIN, C.J.

Mario and Rosal Marsden (the “borrowers”) challenge a final judgment of foreclosure entered in favor of BAC Home Loans Servicing, L.P. f/k/a Countrywide Home Loans Servicing, L.P. (the “bank”). They raise multiple issues on appeal. We find only one has merit, and reverse and remand for the trial court to enter an amended final judgment and therein to eliminate its award of interest, in that the record is devoid of any such proof.

The borrowers argue that the bank did not prove the amount of damages reflected in the final judgment. We agree, but only as to the award of interest. At trial, the bank relied on a payment history to prove its damages. The payment history, however, does not provide an evidentiary basis for the inclusion of any interest. Further, the face of the note does not make apparent how much interest, if any, is owed. The bank’s witness testified that the amounts in a proposed final judgment were consistent with the payment history, but the witness did not offer any testimony as to the amount of interest owed, and the proposed final judgment was not entered into evidence.[1] Because the bank did not present any evidence of the amount of interest owed, we reverse and remand for the trial court to amend the final judgment and remove any calculations for interest.

Reversed and remanded with instructions.

WARNER and GERBER, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

[1] If the bank had offered some, but insufficient, evidence of the amount of interest owed, we would remand for the trial court to take additional evidence. See McMillan v. Bank of New York Mellon, 180 So. 3d 1090, 1091-92 (Fla. 4th DCA 2015).

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HON. ARMANDO RAMIREZ IS RUNNING FOR RE-ELECTION AS OSCEOLA COUNTY CIRCUIT CLERK OF COURTS

HON. ARMANDO RAMIREZ IS RUNNING FOR RE-ELECTION AS OSCEOLA COUNTY CIRCUIT CLERK OF COURTS

via CLOUDED TITLES

BREAKING NEWS, OP-ED … (July 18, 2016) … 

This post is divided into two segments that interrelate to each other.

SEGMENT ONE:

I only generally post stuff that is significant and related to chain of title issues.

Here, there is more than meets the eye, which is why I’ve made it more than just a political candidate pitch.

It’s no secret that the Osceola County Circuit Clerk, the Hon. Armando Ramirez, is running for re-election as Clerk of the Circuit Court as Osceola County, Florida.  There are at least 3 other candidates running against him this time, but I find a significant reason to ignore the challengers in favor of the incumbent: OSCEOLA COUNTY FORENSIC EXAMINATION … and for that reason especially, I endorse Armando Ramirez for this post! 

No other candidate in the race would have the cajones to do what Mr. Ramirez has done in exposing the misdeeds of the banks, their servicers and third-party document manufacturing plants and the law firm scumbag attorneys who participate in the schemes to defraud property owners and rely on documents that are recorded in the real property records of county clerks, recorders and registers’ of deeds offices all over the country.

Clerk Ramirez continues to post the Forensic Examination on his website in spite of the attacks that have come against him in the press for undertaking such a feat.  The thing is, this Report is now being used by foreclosure defense attorneys at trial to bolster their cases in defense of property owners, especially in Florida.  This Report is being downloaded by viewers in the United States and Canada on the academia.edu website, where the Report ranks in the Top 2% of research downloads.

It is fundamentally important to realize that even though WFTV’s George Estevez brought Florida foreclosure defense attorney Matt Weidner on his newcast to downgrade the Report as “not worth the paper it’s printed on”, and the Orlando Sentinel smeared the Clerk’s good name on the front page of its internet edition when the Report was released, it’s rather odd that the Sheriff of Osceola County is NOT running for re-election again, and it appears that Florida’s 9th Circuit State’s Attorney Jeff Ashton has a serious contender (Aramis Ayala) running for States Attorney in 2016.  Sadly, as you remember, Weidner was thumbing through individual pages on camera, but seemed to miss the “Attorney Opinion Letter” favoring the outcome and contents of the report in the back of the Report.  I’m glad Weidner is not running for office because you know what I’d have to say about that, right?

Ashton, as you remember, made two improper judgment calls (in my book):

(1) he refused to investigate the allegations in the Report; and

(2) he was caught playing on his personal computer with his personal credit card on the Ashley Madison dot com website (a known website for married men who want to cheat on their spouses), which I find worse than despicable of a public servant.

At least Mr. Ramirez is inclined (and not afraid) to expose the truth, even if the truth hurts.  I’m wondering (aloud) if Ayala is going to use that as ammo against him.  Considering the fact of what I’m going to share with you in the second segment, it became perfectly obvious to me WHY Ashton didn’t want to prosecute the allegations contained in the Report.

I don’t care whether he became “the face of justice” prosecuting the Casey Anthony case in Florida, he became “the disgrace of justice” in refusing to amass state and local authorities together to conduct a wide scale investigation of the frauds perpetrated in the land records throughout his entire judicial district!

At least Armando Ramirez has the fortitude to “stand up for the little guy”, while his Democratic opponents and judicial counterparts do not, just because it’s “too political”.  When it comes to making material misrepresentations in the real property records, by recording them electronically (by wire), which many of them are (and were stated as such in the Report), I want to share a case with you that discusses in principle, the “fullness” of the wire fraud statute, which Ashton could have contacted the Tampa FBI and enlisted their help in prosecuting the allegations contained in the Report.  In my book, failure to act constitutes nonfeasance of office, especially when you know something is a political powder keg.

SEGMENT TWO: 

Here’s the case I wanted to share with you: US v Takhalov et al, 11th App Cir No 13-12385 (July 11, 2016)

I find this case unique because the author of this opinion bothered to discuss the differences between deceiving and defrauding, as well as his implicit interpretation of the wire fraud statute.  I think that discussing the aspects of wire fraud and its implicit definition is important here, because it involves “intent” and “material misrepresentation”.

The next question I posit here is: What was the intent of the third-party document mills in manufacturing “Assignments of Mortgage” (or Deeds of Trust) by people with absolutely no knowledge of the actual event?  Further, why aren’t the servicers also prosecuted for their involvement in directing the foreclosure mill law firm to commit wire fraud by causing these documents to be electronically wired into the land records?   After all, this is the NEW thing the FBI is now investigating, servicer fraud.

After you read this court case, you will clearly understand why statutes need to be not only correctly interpreted, but you’ll see Ashton’s nonfeasance of office for failing to investigate and prosecute those responsible for stealing Florida properties in his own judicial district by the use of electronically-filed, real property records.  Clearly, this scam has reached into every nook and cranny of every recorder’s office in America!

I have publicly endorsed Aramis Ayala for 9th Circuit States Attorney … I hope she whoops Ashton’s butt in the Florida primaries next month.

If you live in Orange or Osceola Counties in Florida, or know someone who does, you may wish to direct them to this post!  Even more, get them to read the Report!

via CLOUDED TITLES

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TFH 7/17 | Foreclosure Workshop #16: Paragraph 22, The Notice of Default And Right To Cure — How To Use This Most Overlooked Foreclosure Defense To Defeat Summary Judgment And Win At Trial

TFH 7/17 | Foreclosure Workshop #16: Paragraph 22, The Notice of Default And Right To Cure — How To Use This Most Overlooked Foreclosure Defense To Defeat Summary Judgment And Win At Trial

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

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Sunday – July 17, 2016

Foreclosure Workshop #16: Paragraph 22, The Notice of Default And Right To Cure — How To Use This Most Overlooked Foreclosure Defense To Defeat Summary Judgment And Win At Trial ~

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Host: Gary Dubin Co-Host: John Waihee

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CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY 3:00 PM HAWAII 6:00 PM PACIFIC 9:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND ON iHEART RADIO The Foreclosure Hour 12

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SIGTARP: Mortgage Servicers Have Wrongfully Terminated Homeowners Out of the HAMP Program

SIGTARP: Mortgage Servicers Have Wrongfully Terminated Homeowners Out of the HAMP Program

TARP’s major foreclosure prevention program, the Home Affordable Mortgage
Program (“HAMP”), was created to provide sustainable and affordable mortgage
assistance to homeowners at risk of foreclosure.1 Although this program is at a
turning point in its lifecycle, mortgage servicers administering HAMP will continue
to need strict oversight in upcoming years. While HAMP was already scheduled to
stop accepting homeowner applications on December 31, 2016, Congress recently
terminated HAMP as of that date, but protected homeowners’ ability to stay in
HAMP and receive TARP-funded assistance for up to six years.2
To give homeowners in HAMP the best shot at keeping their homes, the
greatest concern going forward should be helping the homeowners who are in
HAMP to stay in HAMP for the full six years. Already, as of December 31, 2015,
507,359 homeowners with permanent HAMP modifications fell out of the program
by missing three payments (referred to as “redefaulting”) – which is almost one out
of every three homeowners in HAMP.3,i

The harm to a homeowner falling out of HAMP is significant, as they are
no longer eligible to receive TARP incentive and other benefits.ii According to a
Treasury survey of HAMP servicers:4
• 23% of all homeowners who redefaulted out of HAMP moved into foreclosure,
• 12% of redefaulted homeowners lost their homes through a short sale or deedin-
lieu of foreclosure, and
• 28% of redefaulted homeowners received an alternative modification,
usually a private sector modification that is less advantageous than a HAMP
modification.iii

Given the high percentage of homeowners falling out of HAMP and known
problems with servicers not following HAMP rules, in October 2013, SIGTARP
recommended that Treasury research and analyze whether, and to what extent, the
conduct of HAMP mortgage servicers contributed to homeowners redefaulting on
HAMP permanent mortgage modifications.iv Although Treasury has not conducted
a full analysis, Treasury has partially implemented SIGTARP’s recommendation,
and reviews samples of 100 homeowners who had redefaulted out of HAMP at
each of the largest HAMP servicers each quarter as part of Treasury’s on-site and
remote compliance testing at each of the largest servicers.

SIGTARP’s concerns over servicer misconduct contributing to homeowner
redefaults in HAMP have been borne out. Treasury’s findings in its on-site visits to
the largest seven mortgage servicers in HAMP over the most recent four quarters
show disturbing and what should be unacceptable results, as 6 of 7 of the mortgage
servicers had wrongfully terminated homeowners who were in “good standing” out
of HAMP.v

These staggering findings clearly show that servicer misconduct is contributing
to some homeowners falling out of HAMP. Homeowners were wrongly terminated
from HAMP by their servicer despite making timely mortgage payments, putting
them at risk of losing their home. These homeowners were forced out of HAMP
through no fault of their own. Mortgage servicers did not give these homeowners a
fair shot. As these instances were found through sampling, Treasury does not know
how many other homeowners were also wrongfully forced out of HAMP.

IN THE LAST YEAR, SIX OF THE SEVEN LARGEST
HAMP SERVICERS WRONGFULLY TERMINATED
HOMEOWNERS OUT OF HAMP WHO WERE PAYING
THEIR MORTGAGE

Homeowners_Wrongfully_Terminated_Out_of_HAMP

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Homeowners: From $150 HOA fee to foreclosure

Homeowners: From $150 HOA fee to foreclosure

WTSP-

Hillsborough County homeowners are battling their HOA in a foreclosure fight, but one missed payment could cost the family their home.

“Because of $150, we’re going to lose a $300,000 home,” says homeowner Tina Lopez.

The Riverview family is taking on the Rivercrest Community Association, who just sold the home at auction.  The Lopez family claims they didn’t have any warning.  Now, the HOA fight could leave the family homeless.

“This is our life.  This is our family,” says Tina Lopez.

[WTSP]

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REPORT | TOO BIG TO JAIL:  INSIDE THE OBAMA JUSTICE DEPARTMENT’S DECISION NOT TO HOLD WALL STREET ACCOUNTABLE

REPORT | TOO BIG TO JAIL: INSIDE THE OBAMA JUSTICE DEPARTMENT’S DECISION NOT TO HOLD WALL STREET ACCOUNTABLE

TOO BIG TO JAIL:
INSIDE THE OBAMA JUSTICE DEPARTMENT’S DECISION
NOT TO HOLD WALL STREET ACCOUNTABLE

REPORT PREPARED BY THE REPUBLICAN STAFF OF THE
COMMITTEE ON FINANCIAL SERVICES, U.S. HOUSE OF REPRESENTATIVES

HON. JEB HENSARLING, CHAIRMAN
114TH CONGRESS, SECOND SESSION

JULY 11, 2016

 
Executive Summary

In March 2013, the Committee on Financial Services (Committee) initiated a
review of the U.S. Department of Justice’s (DOJ’s) decision not to prosecute HSBC
Holdings Plc. and HSBC Bank USA N.A. (together with its affiliates, HSBC) or any
of its executives or employees for serious violations of U.S. anti-money laundering
(AML) and sanctions laws and related offenses. The Committee’s efforts to obtain
relevant documents from DOJ and the U.S. Department of the Treasury (Treasury)
were met with non-compliance, necessitating the issuance of subpoenas to both
agencies. Approximately three years after its initial inquiries, the Committee
finally obtained copies of internal Treasury records showing that DOJ has not been
forthright with Congress or the American people concerning its decision to decline
to prosecute HSBC. Specifically, these documents show that:

  • Senior DOJ leadership, including Attorney General Holder, overruled an
    internal recommendation by DOJ’s Asset Forfeiture and Money Laundering
    Section to prosecute HSBC because of DOJ leadership’s concern that
    prosecuting the bank would have serious adverse consequences on the
    financial system.
  • Notwithstanding Attorney General Holder’s personal demand that HSBC
    agree to DOJ’s “take-it-or-leave-it” deferred prosecution agreement deal by
    November 14, 2012, HSBC appears to have successfully negotiated with DOJ
    for significant alterations to the DPA’s terms in the weeks following the
    Attorney General’s deadline.
  • DOJ and federal financial regulators were rushing at what one Treasury
    official described as “alarming speed” to complete their investigations and
    enforcement actions involving HSBC in order to beat the New York
    Department of Financial Services.
  • In its haste to complete its enforcement action against HSBC, DOJ
    transmitted settlement numbers to HSBC before consulting with Treasury’s
    Office of Foreign Asset Control (OFAC) to ensure that the settlement amount
    accurately reflected the full degree of HSBC’s sanctions violations.
  • The involvement of the United Kingdom’s Financial Services Authority in the
    U.S. government’s investigations and enforcement actions relating to HSBC,
    a British-domiciled institution, appears to have hampered the U.S.
    government’s investigations and influenced DOJ’s decision not to prosecute
    HSBC.
  • Attorney General Holder misled Congress concerning DOJ’s reasons for not
    bringing a criminal prosecution against HSBC.
    ? DOJ to date has failed to produce any records pertaining to its prosecutorial
    decision making with respect to HSBC or any large financial institution,
    notwithstanding the Committee’s multiple requests for this information and
    a congressional subpoena requiring Attorney General Lynch to timely
    produce these records to the Committee.
  • Attorney General Lynch and Secretary Lew remain in default on their legal
    obligation to produce the subpoenaed records to the Committee.
  • DOJ’s and Treasury’s longstanding efforts to impede the Committee’s
    investigation may constitute contempt and obstruction of Congress.
    The Committee is releasing this report to shed light on whether DOJ is
    making prosecutorial decisions based on the size of financial institutions and DOJ’s
    belief that such prosecutions could negatively impact the economy.

[…]

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Justice Department Overruled Recommendation to Pursue Charges Against HSBC, Report Says

Justice Department Overruled Recommendation to Pursue Charges Against HSBC, Report Says

WSJ-

U.S. Justice Department officials overruled their prosecutors’ recommendation to pursue criminal charges against  HSBC  Holdings PLC over money-laundering failings, according to a House committee report prepared by Republicans that sheds new light on the bank’s 2012 settlement.

The report, which was reviewed by The Wall Street Journal ahead of its release Monday morning and was prepared by the Republican staff of the Financial Services Committee, concluded that former Attorney General Eric Holder overruled the internal recommendation and subsequently misled Congress about the Justice Department’s decision not to prosecute the U.K. bank.

“Rather than lacking adequate evidence to prove HSBC’s criminal conduct, internal Treasury documents show that DOJ leadership declined to pursue [the] recommendation to prosecute HSBC because senior DOJ leaders were concerned that prosecuting the bank ‘could result in a global financial disaster,’ ” the 282-page report stated.

[THE WALL STREET JOURNAL]

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