The Hill-

A top Senate Democrat is pressing the FBI for any information it may have about a possible probe into a film production company with deep ties to President-elect Donald Trump’s pick to head the Treasury Department.

After a public records request indicated that there could be “enforcement proceedings” involving the company Relativity Media, Sen. Sherrod Brown(D-Ohio) wants to know more. That company, which declared bankruptcy in 2015, once counted among its top investors Steven Mnuchin, Trump’s nominee for Treasury Secretary.

With Mnuchin set to appear before the Senate Finance Committee Thursday, Brown is arguing the public has a right to know if one of his business ventures is embroiled in an FBI probe.

[THE HILL]

HW-

New York Attorney General Eric Schneiderman is investigating practices related to the servicing of reverse mortgages at Financial Freedom, a part of OneWest Bank, and at Champion Mortgage, a unit of Nationstar Mortgage, as the state further heightens its recent focus on reverse mortgages, an article in The Wall Street Journal by Annamaria Andriotis stated.

“The inquiry, which is in early stages, is examining whether businesses employed tactics that pushed elderly borrowers into foreclosure,” the article sated.

The article noted that a spokesman for CIT, which now owns OneWest and Financial Freedom, declined to comment.

[HOUSING WIRE]

Watch the replay!

Treasury Secretary Confirmation Hearing Steven Mnuchin testified before the Senate Finance Committee on his nomination to be Treasury secretary in the Trump administration.

HW-

In a unanimous opinion handed down Wednesday, the Supreme Court limited Fannie Mae’s ability to transfer cases to federal court, ruling that the government-sponsored enterprise’s charter does not grant it the right to move all state cases to the federal level.

The decision, written by Justice Sonia Sotomayor, overturns a lower court’s ruling, which held that the “sue-and-be-sued” clause in Fannie Mae’s charter allowed for the GSE to transfer any lawsuits against it filed at the state level to federal court.

Sotomayor writes that the Court previously ruled on several other arguments from other federally chartered organizations, but notes that Fannie Mae’s charter differs in that “sue-and-be-sued” clause states that cases can be transferred to “any court of competent jurisdiction.”

The clause in question authorizes Fannie Mae “to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal.”

[HOUSING WIRE]

That was fast!

The Guardian-

JP Morgan Chase agreed to pay $55m to settle charges that the bank discriminated against “thousands” of minorities seeking home loans by charging them higher rates and fees.

The decision came after US attorney Preet Bharara filed a complaint on Wednesday alleging that the US’s biggest bank discriminated against at least 53,000 African American and Hispanic mortgage seekers between 2006 and 2009 in violation of the Fair Housing Act.

Minority borrowers were owed “tens of millions of dollars in damages”, the government said, because JP Morgan allowed them to be charged higher rates and fees than “similarly situated white borrowers”.

[THE GUARDIAN]

Reuters-

The United States on Wednesday sued JPMorgan Chase & Co, accusing the bank of discriminating against minority borrowers by charging them higher rates and fees on home mortgage loans between 2006 and at least 2009.

Filed in a Manhattan federal court, the government’s complaint accused the bank of violating the U.S. Fair Housing Act and the Equal Credit Opportunity Act by charging thousands of African-American and Hispanic borrowers more for home loans than white borrowers with the same credit profile.

JPMorgan Chase and U.S. Attorney Preet Bharara did not immediately respond to requests for comment.

[REUTERS]

CNBC-

Deutsche Bank agreed on Tuesday to pay $7.2 billion for misleading investors in its sale of residential mortgage-backed securities, among the largest resolutions of its kind.

The U.S. Justice Department said the settlement requires Germany’s largest lender to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act.

It will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.

The Justice Department said it is “one of the largest FIRREA penalties ever paid.”

[CNBC]

Justice Department and State Partners Secure Nearly $864 Million Settlement With Moody’s Arising From Conduct in the Lead up to the Financial Crisis

Settlement Involves Significant Commitment by Moody’s to Improve Business Practices

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Sunday – January 15, 2017

Foreclosure Workshop #25:
Sampaio v. Mililani Town Association —
Most Homeowner Associations throughout the Nation are today in various stages of increasing absolute turmoil, with mounting maintenance costs, acrimonious disputes among homeowners and between homeowners and directors, and dwindling finances.

Let’s face it. What was once celebrated as a noble experiment in homeowner collective democracy has disintegrated into over-expensive and wasteful rule by totalitarian Board of Director oligarchies.

Nevertheless, State Legislators hearing the mounting outcries of its constituents continue to attempt to prop up a failing system by proposing piecemeal reforms, ignoring the realities of the complete breakdown in the internal governance within most homeowner associations.

The Foreclosure Hour is proposing five unique, major institutional reforms urgently needed to restore economic and political sanity within homeowner associations for those justifiably angry and frustrated homeowners otherwise seemingly hopelessly trapped within the present unworkable system.

Those who miss this important live broadcast can listen to it on the Past Broadcast Section of our Website at www.foreclosurehour.com shortly after it airs live on KHVH-AM News Radio in Honolulu and simultaneously throughout the United States on the iHeart Internet App.

EVERY SUNDAY 3:00 PM HAWAII 5:00 PM PACIFIC 8:00 PM EASTERN ON KHVH-AM (830 ON THE DIAL) AND ON iHEART RADIO

BNA-

The subprime mortgage crises of 2008, which experts believe caused millions of mortgages to default, may be old news but mortgage lenders holding defaulted mortgages are starting to feel the effects and may now face a new problem which can result in the loss of the security interest. Nearly a decade after the 2008 Financial Crisis, considered the worst since the Great Depression, crippled the American economy, mortgage lenders are bringing an increasing number of foreclosure actions, but borrowers are now raising the statute of limitations as a defense. In some instances, borrowers are actually initiating actions in an effort to have courts declare mortgages invalid, thereby redefining the meaning of a “free lunch.”

Mortgage lenders responded to the subprime mortgage crises, but the response was not always the initiating of a foreclosure proceeding to gain possession of the collateral securing the loan. For example, mortgage lenders may have accelerated a mortgage upon default. Acceleration of the mortgage loan, however, may have triggered the running of the statute of limitations while offering very little benefit to the mortgage lender. In other instances, foreclosure litigations may have been initiated but not litigated to conclusion. In such circumstances, the loan could have been sold, a common occurrence, and the subsequent holders of the mortgages may have opted not to proceed. In other instances, mortgage lenders may have opted not to proceed with foreclosure litigations because of some type of deficiency (or a perceived deficiency), thereby opting to voluntarily dismiss the action. Such actions may have not stopped the running of the statute of limitation.

[BNA]

As well as represents Trump Foundation…and just last year it was named Russia Law Firm of the Year!

National Law Journal-

The Trump camp continues to draw DOJ transition officials from the nation’s largest law firms. The newest members are McGuireWoods partner J. Patrick Rowan, the former head of the National Security Division; Morgan, Lewis & Bockius partner Ronald Tenpas, the former head of the Environment and Natural Resources Division; and Morrison & Foerster partner Jessie Liu, who served as a top official in the National Security and Civil Rights divisions.

[NATIONAL LAW JOURNAL]

NY Daily News-

The state would be able to ban bad actors from the financial services industry under a proposal Gov. Cuomo announced Sunday.

The plan, which Cuomo will discuss in his State of the State speeches this week, is meant to beef up New York’s powers to crack down on shady bankers like those at Wells Fargo, which was fined for opening up bogus accounts for customers without their knowledge.

Cuomo plans to pursue legislation which would allow the superintendent of the Department of Financial Services to bar individuals from working in the banking or insurance industries if he finds after a hearing that the person has engaged in misconduct severe enough to have a direct bearing on their fitness to participate in the industry.

“New York is the financial center of the world and we have zero tolerance for those who seek to defraud customers and undermine the system,” Cuomo said. “The excesses and systematic abuse at the center of the Wells Fargo scandal is unacceptable and New York, in its role as a regulator, is seeking to take bold steps to crack down on this unacceptable behavior.”

[NY DAILY NEWS]

image of Andrew_Cuomo_by_Pat_Arnow

LORENZO DIXON and LAHOMA DIXON, Appellants,
v.
WELLS FARGO BANK, N.A., et al., Appellees.

S. Alan Johnson of S. Alan Johnson Law LLC, Fort Myers, for appellants.

Brian S. Jacobson of Brian Jacobson Law, PL, Miami, for appellee SJ Mak LLC.

KLINGEN SMITH, J.

Lorenzo and Lahoma Dixon (“Borrowers”) appeal a final judgment of foreclosure entered against them. Because the initial plaintiff, Wells Fargo Bank, N.A. (“Bank”), sent a default letter to Borrowers that failed to substantially comply with paragraph 22 of the mortgage, we reverse.^[1]

After Borrowers defaulted on their mortgage loan payment, Bank’s law firm sent them a default letter on Bank’s behalf stating that “[p]ursuant to the terms of the promissory Note and Mortgage, [Bank] has accelerated all sums due and owing, which means that the entire principal balance and all other sums recoverable under the terms of the promissory Note and Mortgage are now due.” The letter notified Borrowers that although the process of filing a foreclosure complaint against them was already underway, Borrowers should contact the firm “if you wish to receive figures to reinstate (bring your loan current) or pay off your loan through a specific date,” and that the debt would be assumed valid “[u]nless you notify this law firm within thirty (30) days after your receipt of this letter that the validity of this debt, or any portion thereof, is disputed.” Eight days after this letter was sent, Bank filed its foreclosure complaint.

At the close of the non-jury trial, Borrowers moved for involuntary dismissal on multiple grounds, one of which was that the default letter failed to comply with paragraph 22 of the mortgage. Paragraph 22 of the mortgage provided, in relevant part:

22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding.

The trial court ruled that Bank substantially complied with paragraph 22, and ultimately entered final judgment against Borrowers. This appeal followed.

“[A] trial court’s interpretation of a contract is a matter of law subject to a de novo standard of review.” Reilly v. Reilly, 94 So. 3d 693, 697 (Fla. 4th DCA 2012) (quoting Chipman v. Chipman, 975 So. 2d 603, 607 (Fla. 4th DCA 2008)).

Paragraph 22 of a standard mortgage “sets forth a pre-suit requirement that the lender give the borrower thirty days’ notice and an opportunity to cure the default prior to filing suit.” Dominko v. Wells Fargo Bank, N.A., 102 So. 3d 696, 698 (Fla. 4th DCA 2012). Its purpose is “to ensure that borrowers are informed before suit is filed that they are not required to take a foreclosure complaint lying down and can defend the case if so inclined.” Green Tree Servicing, LLC v. Milam, 177 So. 3d 7, 16-17 (Fla. 2d DCA 2015). A bank’s substantial compliance with paragraph 22 “is all that is required” to satisfy this condition precedent. See Ortiz v. PNC Bank, Nat’l Ass’n, 188 So. 3d 923, 925 (Fla. 4th DCA 2016).

Analogous to this case is Kurian v. Wells Fargo Bank, National Ass’n, 114 So. 3d 1052, 1054-55 (Fla. 4th DCA 2013), wherein this court reversed a summary judgment of foreclosure entered against the borrowers because the bank did not meet the requirements of paragraph 22 since its default letter conveyed that acceleration had already occurred, was dated six days before the filing of the complaint, and failed to provide both a sufficient notice of default and a thirty-day opportunity to cure. Likewise, the evidence here showed that Bank did not substantially comply with paragraph 22 of Borrowers’ mortgage because Bank’s default letter stated that acceleration had already occurred, was sent only eight days before the filing of the initial complaint, and failed to inform Borrowers of their right to assert the nonexistence of default and to provide them with thirty days to cure. See id.

Therefore, because Bank did not substantially comply with paragraph 22 of Borrowers’ mortgage, we reverse and remand to the trial court to grant Borrowers’ motion for involuntary dismissal.

Reversed and Remanded with instructions.

GERBER and LEVINE, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

[1] Wells Fargo was the initial plaintiff, but SJ Mak LLC was properly substituted as the plaintiff later in the case.

The Hill-

The top Democrat on the House Financial Services Committee is asking federal agencies to release documents from any investigations into President-elect Donald Trump’s nominee for Treasury Secretary.

Rep. Maxine Waters (D-Calif.) in a letter released Monday asked the Department of Justice and the Department of Housing and Urban Development (HUD) to release materials related to any investigations of OneWest Bank while Steven Mnuchin served as its CEO from 2009-15.

Democrats have targeted Mnuchin, a former Goldman Sachs partner and Hollywood producer, for the more than 36,000 foreclosures OneWest carried out during his tenure.

[THE HILL]

image: Bloomberg News

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

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Sunday – January 8, 2017

Five Urgent Actions State Legislatures Need To Take in 2017 To Stop Our Foreclosure Courts From Continuing To Be Collection Agencies For Crooks

 Despite welcome enlightened decisions by a few state and federal judges, nevertheless almost all American Courts continue to allow wrongful forecloses on American homeowners despite overwhelming evidence of mortgage and promissory note fraud.

It has become clear that only urgent action by individual state legislatures in 2017 is now capable of reversing such well established, court sponsored, stare decisis protected, foreclosure abuses, for it is court interpretation of existing state legislation that is empowering such fraud to take place in our courts in the first place, and it is now only remedial state legislation that can therefore remedy those abuses.

On this Sunday’s Foreclosure Hour a five-part comprehensive plan for state legislative reform will be presented and discussed, to be followed on subsequent shows with draft model state legislation.

We are no longer interested in piecemeal legislative bandaids being applied to existing legislation.

We will be sponsoring fundamental reform of the entire mortgage recording and enforcement system in the United States based on what we have learned from years of our past shows.

To begin this curative process and achieve success, homeowners in each state will be encouraged to form citizen legislative task forces to lobby individual state legislatures to enact these needed reforms.

Depending upon our courts to correct foreclosure abuses has proven to be absolute folly.

This new year The Foreclosure Hour intends to concentrate on stimulating fundamental state legislative institutional reform in the hope of changing the national focus from judicial to legislative changes in the foreclosure area.

Those who miss this important live broadcast can listen to it on the Past Broadcast Section of our Website at www.foreclosurehour.com shortly after it airs live on KHVH-AM News Radio in Honolulu and simultaneously throughout the United States on the iHeart Internet App.

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 Trump Foundation is under investigation in part because of an illegal contribution it made to Pam Bondi

Salon-

It is now being reported that Florida Attorney General Pam Bondi, a member of Donald Trump’s transition team who has a history with the president-elect, is being considered for an appointment in the Trump White House.

When the Trump transition team was asked about the possibility of a Bondi appointment on Thursday, incoming press secretary Sean Spicer refused to divulge any information on the subject.

“We have no additional announcements at this time,” Spicer said. “I don’t want to get ahead of any announcements that may or may not come.”

[SALON]

Credit Reporting Companies Misstated the Cost and Usefulness of the Credit Scores and Products They Sold, Lured Consumers into Costly Recurring Payments

The Consumer Financial Protection Bureau (CFPB) today took action against Equifax, Inc., TransUnion, and their subsidiaries for deceiving consumers about the usefulness and actual cost of credit scores they sold to consumers. The companies also lured consumers into costly recurring payments for credit-related products with false promises. The CFPB ordered TransUnion and Equifax to truthfully represent the value of the credit scores they provide and the cost of obtaining those credit scores and other services. Between them, TransUnion and Equifax must pay a total of more than $17.6 million in restitution to consumers, and fines totaling $5.5 million to the CFPB.

“TransUnion and Equifax deceived consumers about the usefulness of the credit scores they marketed, and lured consumers into expensive recurring payments with false promises,” said CFPB Director Richard Cordray. “Credit scores are central to a consumer’s financial life and people deserve honest and accurate information about them.”

Chicago-based TransUnion and Atlanta-based Equifax are two of the nation’s three largest credit reporting agencies. TransUnion and Equifax collect credit information, including a borrower’s payment history, debt load, maximum credit limits, names and addresses of current creditors, and other elements of their credit relationships. These generate credit reports and scores that are provided to businesses. Through their subsidiaries, TransUnion Interactive and Equifax Consumer Services, the companies also market, sell, or provide credit-related products directly to consumers, such as credit scores, credit reports, and credit monitoring.

Credit scores are numerical summaries designed to predict consumer payment behavior in using credit. Many lenders and other commercial users rely in part on these scores when deciding whether to extend credit. No single credit score or credit score model is used by every lender. Lenders use an array of credit scores, which vary by score provider and scoring model. The scores that TransUnion sells to consumers are based on a model from VantageScore Solutions, LLC. Although TransUnion has marketed VantageScores to lenders and other commercial users, VantageScores are not typically used for credit decisions. Scores Equifax sold to consumers were based on Equifax’s proprietary model, the Equifax Credit Score, which is an “educational” credit score that also is typically not used by lenders to make credit decisions.

TransUnion, since at least July 2011, and Equifax, between July 2011 and March 2014, violated the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act by:

• Deceiving consumers about the value of the credit scores they sold: In their advertising, TransUnion and Equifax falsely represented that the credit scores they marketed and provided to consumers were the same scores lenders typically use to make credit decisions. In fact, the scores sold by TransUnion and Equifax were not typically used by lenders to make those decisions.

• Deceiving consumers into enrolling in subscription programs: In their advertising, TransUnion and Equifax falsely claimed that their credit scores and credit-related products were free or, in the case of TransUnion, cost only “$1.” In reality, consumers who signed up received a free trial of seven or 30 days, after which they were automatically enrolled in a subscription program. Unless they cancelled during the trial period, consumers were charged a recurring fee – usually $16 or more per month. This billing structure, known as a “negative option,” was not clearly and conspicuously disclosed to consumers.

Equifax also violated the Fair Credit Reporting Act, which requires a credit reporting agency to provide a free credit report once every 12 months and to operate a central source – AnnualCreditReport.com – where consumers can get their report. Until January 2014, consumers getting their report through Equifax first had to view Equifax advertisements. This violates the Fair Credit Reporting Act, which prohibits such advertising until after consumers receive their report.

Enforcement Action

Under the Dodd-Frank Act, the CFPB is authorized to take action against institutions engaged in unfair, deceptive, or abusive acts or practices, or that otherwise violate federal consumer financial laws. Under the consent orders, TransUnion and Equifax must:

• Pay more than $17.6 million in total restitution to harmed consumers: TransUnion must provide more than $13.9 million in restitution to affected consumers. Equifax must provide almost $3.8 million in restitution to affected consumers. The companies must send notification letters about the restitution to affected consumers.

• Truthfully represent the usefulness of credit scores it sells: TransUnion and Equifax must clearly inform consumers about the nature of the scores they are selling to consumers.

• Obtain the express informed consent of consumers: Before enrolling a consumer in any credit-related product with a negative option feature, TransUnion and Equifax must obtain the consumer’s consent.

• Provide an easy way to cancel products and services: TransUnion and Equifax must give consumers a simple, easy-to-understand way to cancel the purchase of any credit-related product, and stop billing and collecting payments for any recurring charge when a consumer cancels.
• Pay $5.5 million in total penalties: TransUnion must pay $3 million to the Bureau’s civil penalty fund. Equifax must pay $2.5 million to the Bureau’s civil penalty fund.

The full text of the CFPB’s Consent Order against Equifax is here:http://files.consumerfinance.gov/f/documents/201701_cfpb_Equifax-consent-order.pdf

The full text of the CFPB’s Consent Order against TransUnion is here:http://files.consumerfinance.gov/f/documents/201701_cfpb_Transunion-consent-order.pdf

More information about credit scores can be found here: http://www.consumerfinance.gov/about-us/blog/what-you-need-know-understanding-why-offers-your-credit-score-are-not-all-same/

CNN-

President-elect Donald Trump’s choice to be the next top cop of Wall Street is Jay Clayton, an elite lawyer who has defended big banks for their financial crisis-era misbehavior.

Trump announced his SEC pick on Wednesday and explained that Clayton’s background as a Wall Street lawyer will help unleash the “job-creating power” of the economy while still providing strong oversight.

“We need to undo many regulations which have stifled investment in American businesses, and restore oversight of the financial industry in a way that does not harm American workers,” Trump said in a statement.

[CNN]

The Intercept-

ONEWEST BANK, WHICH Donald Trump’s nominee for treasury secretary, Steven Mnuchin, ran from 2009 to 2015, repeatedly broke California’s foreclosure laws during that period, according to a previously undisclosed 2013 memo from top prosecutors in the state attorney general’s office.

The memo obtained by The Intercept alleges that OneWest rushed delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions.

In the memo, the leaders of the state attorney general’s Consumer Law Section said they had “uncovered evidence suggestive of widespread misconduct” in a yearlong investigation. In a detailed 22-page request, they identified over a thousand legal violations in the small subsection of OneWest loans they were able to examine, and they recommended that Attorney General Kamala Harris file a civil enforcement action against the Pasadena-based bank. They even wrote up a sample legal complaint, seeking injunctive relief and millions of dollars in penalties.

But Harris’s office, without any explanation, declined to prosecute the case.

[THE INTERCEPT]