STOP FORECLOSURE FRAUD - Part 2

Archive | STOP FORECLOSURE FRAUD

JPMorgan to pay Lehman $797.5 million to end litigation over collapse

JPMorgan to pay Lehman $797.5 million to end litigation over collapse

Reuters-

JPMorgan Chase & Co (JPM.N) will pay $797.5 million in cash to end all litigation brought on behalf the former Lehman Brothers Holdings Inc, whose September 2008 collapse triggered a global financial crisis.

The settlement made public on Wednesday requires approval by U.S. Bankruptcy Judge Shelley Chapman in Manhattan.

It follows JPMorgan’s agreement last January to pay $1.42 billion in cash to resolve most other claims, in what had been an $8.6 billion lawsuit against the largest U.S. bank to recoup money for Lehman creditors.

[REUTERS]

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



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TFH 2/5 | What Every Homeowner Needs To Know About Foreclosure Defense Attorneys: Why They Remain an Endangered Species and What If Anything Can Be Done About It.

TFH 2/5 | What Every Homeowner Needs To Know About Foreclosure Defense Attorneys: Why They Remain an Endangered Species and What If Anything Can Be Done About It.

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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REBROADCAST

(VERY IMPORTANT UPDATE)

Sunday – December 27, 2015

What Every Homeowner Needs To Know About Foreclosure Defense Attorneys: Why They Remain An Endangered Species And What If Anything Can Be Done About It

A year ago The Foreclosure Hour explained why homeowners nationwide were having such great difficulty finding a knowledgeable foreclosure defense attorney and suggested ways of remedying the problem.

Yet, if anything, as those presently facing foreclosure well know, rather than becoming easier, it is actually even more difficult anywhere to find knowledgeable foreclosure defense counsel.

Apart from the factors we identified causing the problem discussed on last December 27, 2015’s Show, making the situation still even worse, there has been an increase in Bar regulatory “targeting” of foreclosure defense attorneys.

The ignorant but widespread popular judicial belief that a homeowner who is behind in mortgage payments is not entitled to any defenses, itself discouraging attorneys from entering or staying in the field, an even more disturbing, parallel attitude has emerged among Bar regulators nationwide seemingly convinced that if an attorney attempts to defend a homeowner behind in mortgage payments that attorney must be a crook trying to take money from vulnerable consumers having no defenses whatsoever.

State Bar Regulators have, for instance, been circulating memos among themselves urging disciplining of foreclosure defense attorneys.

That trend, for instance, was clearly in evidence in Hawaii last year.

Whereas there has been only a handful of attorneys in Hawaii defending residential foreclosure cases, in 2016 almost all of them (5 and maybe 6) were disciplined, resulting in disbarment, suspension, or voluntary loss of their license.

Not being familiar with the facts of those cases, I am unable to evaluate whether or not those disciplinary actions, paralleling what is taking place nationally, were justified or not.

But I can confirm that by “targeting” I mean that a grievance filed against a foreclosure defense attorney gets much more serious and immediate superficial attention from Bar regulators than the same type of complaint made against a non-foreclosure defense attorney would, akin to the hysteria fueling the search for witches in Salem, Massachusetts centuries ago.

Of course, foreclosure attorneys who submit false and forged loan documents in Court on behalf of pretender lenders are rarely if ever disciplined by Bar regulators, the mind of man runneth not to the contrary.

Meanwhile, homeowners in protracted foreclosure proceedings are understandably usually emotional wrecks, sometimes prone to strike out against their own counsel if they have one, justifiably confused or outraged by the unfairness of the system, of which their attorneys are often ultimately seen to be an integral part.

Under such circumstances, one can understand the reluctance of potential consumer defense attorneys to touch foreclosure cases, let alone their attempting to learn how to protect residential mortgage borrowers unless having the rare courage of those applying for acceptance into military Seal Teams.

That discriminatory view possessed by Bar regulators is completely unjustified. Attorneys are vitally needed to protect the legal rights of homeowners.

And those rights can be protected in our experience as reflected in our “thank you” and “our appeals” lists posted on our foreclosure website.

In one of our cases just last week, for instance, we even had the foreclosure complaint dismissed with prejudice for good cause, our client earning and deserving so far the proverbial “free house”.

Meanwhile, foreclosure defense attorneys will continue to be an endangered species, especially unless the Bar pushes back against incompetent and misguided Bar regulators. 

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



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NYE LAVALLE: ROBO-LAWYERS & ROBOWITNESS  COMMIT FRAUD ON A FLORIDA COURT

NYE LAVALLE: ROBO-LAWYERS & ROBOWITNESS COMMIT FRAUD ON A FLORIDA COURT

Published with Permission © COPYRIGHT 2017 NYE LAVALLE ALL RIGHTS RESERVED foreclosurefraudexpert@gmail.com

McGlinchy Stafford Robo-Lawyers Kathleen Angione & Daniel Pasky Go Over The Top To Intentionally Deceive A Good, Honorable & Inquisitive Judge In A Volusia County, Florida Court With the Known Introduction of Fabricated Evidence & the Subornation of Perjury by known RoboWitness, Lawrence Nardi of Select Portfolio Servicing f/k/a Fairbanks Capital in Volusia County, Florida Case No. 2010-30059 – CICI Consolidated With Case No. 2013-31253 – CICI.

 

FinalSPS BANA FraudReport by DinSFLA on Scribd

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



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NYE LAVALLE: DOUBLE SALE & NOTE PLEDGE FRAUD IN SECURITIZATION & FORECLOSURE

NYE LAVALLE: DOUBLE SALE & NOTE PLEDGE FRAUD IN SECURITIZATION & FORECLOSURE

Published with Permission © COPYRIGHT 2017 NYE LAVALLE ALL RIGHTS RESERVED foreclosurefraudexpert@gmail.com

BACKGROUND

Association of Certified Fraud Examiners

Mortgage fraud continues to threaten the health of our nation’s financial markets and economy. Anti-fraud professionals are needed to combat this global problem. The Association of Certified Fraud Examiners (“ACFE”) is the world’s largest anti-fraud organization with nearly 80,000 members who are committed to reducing business fraud worldwide. The ACFE provides anti-fraud training and education to its members and businesses across the world. As part of their anti-fraud efforts in the mortgage markets, the ACFE provides training and exams in the area of mortgage fraud. One such training course was developed that is titled “Understanding the Basics of Mortgage Fraud.” In this course, ACFE members explore the history of the mortgage industry and its role in the global financial crisis and examine the life cycle of a mortgage loan to identify potential areas for fraud and learn techniques to recognize red flags of common mortgage fraud schemes and methods for prevention. One such scheme is the focus of this report that I have been writing and warning about for two decades. It’s called the “Double-Pledge” or “Double-Sale” loan and note scheme where a borrower’s promissory note and loan are sold, transferred, or pledged to more than one lender. In Understanding the Basics of Mortgage Fraud, the ACFE writes the following:

Fraud Trends Involving Lenders

A scheme used by lenders to raise capital is to the sell the same mortgage loan to more than one secondary-market investor; this scheme known as the double-sold loan. The original loan documentation is duplicated and sold more than once in the secondary market. To conceal the scheme, the lender remits the scheduled principal and interest payments to the servicer. Since all loans remain current, the borrower is not aware that his mortgage has been double-pledged unless one of the loans goes into foreclosure.

Red flags for this scheme include:

• Someone other than the borrower is making payments on the loan.

• The borrower receives late notices or tax invoices on more than one loan.

• The borrower notices more than one loan on his credit report.

• The lender fails to provide the note to the document custodian.

 

Final Double Pledge Report by DinSFLA on Scribd

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



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NYE LAVALLE: BARTRAM DECISION IS GOOD FOR BORROWERS

NYE LAVALLE: BARTRAM DECISION IS GOOD FOR BORROWERS

Published with Permission – © Copyright 2017 Nye Lavalle All Rights Reserved foreclosurefraudexpert@gmail.com

The Florida Supreme Court ruled in Bartram v. U.S. Bank, N.A., SC14-1265 that lenders are not barred from filing subsequent foreclosure actions based on payment defaults after a first foreclosure action is involuntarily dismissed. In essence, one legal definition for SOL (Statute of Limitations) was replaced by a different definition (Shit Otta Luck) for borrowers! Many Florida foreclosure defense attorneys view this half filled glass of water as an empty glass rather than the full glass I see. In this report, I will show how Bartram can provide for good decisions and judgments!

 

Bartram Final by DinSFLA on Scribd

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



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Bringing Back Glass-Steagall: Will Trump break up the big banks?

Bringing Back Glass-Steagall: Will Trump break up the big banks?

MONEY CNN-

Wall Street stalwart JPMorgan Chase CEO Jamie Dimon is heading to Washington on Friday to meet with President Trump.

It will be Dimon’s first meeting with Trump as part of the president’s CEO advisory group. The summit is likely to feature lots of talk about slashing burdensome regulation, including on banks.

Trump just this week pledged to “do a big number” on the Wall Street reform law known as Dodd-Frank. But will Trump also bring up his pre-election pledge to bring back Glass-Steagall?

[MONEY CNN]

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Castle law firm cheated the foreclosure system, AG says in trial’s last day

Castle law firm cheated the foreclosure system, AG says in trial’s last day

Denver Post-

Colorado’s largest foreclosure law firm, run by Larry Castle and his wife, Caren, was so good at its job that it had little trouble ginning up creative ways to pad its billings and reap millions in illegitimate profits on the backs of the banks it represented, the affected homeowners, and real estate investors who later bought the houses, the attorney general’s office said.

Painting a picture of a money-hungry legal outfit that preyed on a foreclosure system gone wild, nickel and diming tens of thousands of cases it handled in Colorado, state attorneys suing Castle said the law firm bulldozed through the mortgage-failure crisis and came out $12 million richer.

It did so by inflating the costs of posting legal notices on homes facing foreclosure and, the state alleges, conspiring with companies that did the work and its own competitors to fix the price at far more than what it actually cost.

“Foreclosures are a legitimate and necessary part of our system. If the borrower can’t pay, the lender has the right to foreclose,” assistant Attorney General Erik Neusch argued to Denver District Judge Morris Hoffman at the close of three-week trial Friday. “But a law firm should not be able to cheat the system, claim false and misleading costs, and profit against investors, homeowners, and their banking clients.”

[DENVER POST]

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



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Heller v. Bank of America, N.A. | FL 2DCA – trial court erred in admitting a copy, rather than the original, of the promissory note into evidence…Improper hearsay testimony

Heller v. Bank of America, N.A. | FL 2DCA – trial court erred in admitting a copy, rather than the original, of the promissory note into evidence…Improper hearsay testimony

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

IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT

GINA D. HELLER a/k/a GINA HELLER,

Appellant,

v.

BANK OF AMERICA, NA, successor by
merger to BAC HOME LOANS
SERVICING, LP f/k/a COUNTRYWIDE
HOME LOANS SERVICING LP,

Appellee.
___________________________________
Opinion filed January 27, 2017.

SILBERMAN, Judge.

After a bench trial, Gina D. Heller appeals a final judgment of foreclosure
in favor of Bank of America, N.A., as successor by merger to BAC Home Loans
Servicing, LP f/k/a Countrywide Home Loans Servicing LP (the Bank). Two issues
require discussion. First, because the trial court erred in admitting a copy, rather than
the original, of the promissory note into evidence over an objection based on the best
evidence rule, we reverse the final judgment and remand for a new trial. Second, we
address the trial court’s error in allowing inadmissible hearsay when the Bank’s
representative testified based on business records that were not admitted into evidence.

In its complaint for foreclosure, the Bank alleged that Federal National
Mortgage Association (Fannie Mae) owned the note. The Bank alleged that it was the
servicer of the loan, the holder of the note, and authorized by Fannie Mae to bring the
action. Attached to the complaint is a copy of the note with the lender listed as Bank of
America, N.A. The copy of the note contains an undated, blank endorsement by Bank
of America, N.A. Heller filed affirmative defenses, and in one of her defenses she
asserted that the Bank could not produce the original note that allegedly obligated her
and “dispute[d] that any document now or hereafter filed with this Court is the original
Note and demands strict proof thereof.”

At trial, the Bank offered a copy of the note into evidence. Defense
counsel objected pursuant to section 90.953, Florida Statutes (2014), commonly known
as the best evidence rule, because the note was a copy rather than the original. The
Bank’s counsel made an unsworn representation that the original had been submitted to
the clerk’s office several days earlier for filing. Defense counsel asserted that it was
necessary to submit the original for review by the trial court as the trier of fact. The trial
court stated that because the original had been filed with the clerk, the copy would be
received into evidence. Defense counsel asserted prejudice by the original not being
present in the courtroom because he had observed in other cases instances where the
notice of filing the original actually attached a copy.

The trial court advised defense counsel that the clerk was in the building
and that counsel had the opportunity to go look at the documents himself. The court
added that it assumed that counsel had waived his right to do so. Defense counsel
persisted that he had not waived his right for the trier of fact to review the original note.

One representative of the Bank testified at trial. He testified that the copy
of the note he reviewed did not indicate when the endorsement was made or when the
Bank had taken possession of the note. Bank of America, N.A., originated the note but
sold it at some point to Fannie Mae as an investor. He said the sale “absolutely” would
have been sometime before the lawsuit was filed. The representative admitted that he
did not have any evidence as to the location of the note when Fannie Mae took
ownership or while the Bank’s predecessor, BAC Home Loans Servicing, LP, serviced
the loan.

During his testimony the representative was asked who owned the note
and who serviced the note. The representative stated that based on his employer’s
business records, including “custodial” records, the Bank was the servicer of the loan
and Fannie Mae had a beneficial interest in the note as the investor. Based on these
records, the representative stated that “the original note was lent by Bank of America”
and that he believed the original note was placed in a Bank of America vault “two days
after origination.” Defense counsel objected to the admission of this hearsay testimony,
asserting that the Bank failed to lay any foundation for this testimony and that the
alleged business records were not in evidence or otherwise before the court. The trial
court overruled defense counsel’s multiple hearsay objections and allowed the
testimony.

At the close of the Bank’s evidence, defense counsel moved to dismiss
the case based on the insufficiency of the evidence pursuant to Florida Rule of Civil
Procedure 1.420(b). Among other things, counsel argued that the Bank failed to
introduce sufficient evidence that it possessed the original note, in violation of section
90.953, and that the Bank failed to introduce sufficient evidence of when the
endorsement was placed on the note. The trial court denied the motion on these
grounds and entered judgment in favor of the Bank.

Although a trial court’s decision on the admissibility of evidence is
reviewed for an abuse of discretion, that discretion is limited by the rules of evidence.
See Sottilaro v. Figueroa, 86 So. 3d 505, 507 (Fla. 2d DCA 2012). We apply a de novo
standard of review to the extent that the trial court’s ruling is an interpretation of the
evidence code and case law construing the code. See id.

The Florida Evidence Code provides that an original of a writing is
required to prove the contents of the writing, unless otherwise provided by statute. §
90.952. Section 90.953 allows for the admission of a duplicate “to the same extent as
an original” unless certain exceptions apply. The exception relevant here is when the
document is a negotiable instrument. See § 90.953(1). A promissory note is a
negotiable instrument, see Stone v. BankUnited, 115 So. 3d 411, 413 (Fla. 2d DCA
2013), and thus the evidence code requires that the original be produced at trial, see §
90.953(1); see also Fair v. Kaufman, 647 So. 2d 167, 168 (Fla. 2d DCA 1994)
(recognizing that in a foreclosure action the original promissory note must be introduced
into evidence at trial “or a satisfactory reason must be given for failure to do so”).
Further, section 702.015(4), Florida Statutes (2014), requires that the original note be
filed with the court before entry of a foreclosure judgment or a judgment on the note.

Because a promissory note is a negotiable instrument, it is necessary to
surrender the original note to remove it from the stream of commerce and prevent the
negotiation of the note to another person. See Deutsche Bank Nat’l Trust Co. v. Clarke,
87 So. 3d 58, 61 (Fla. 4th DCA 2012); Perry v. Fairbanks Capital Corp., 888 So. 2d 725,
727 (Fla. 5th DCA 2004). In addition, “possession of the original note is a significant
fact in deciding whether the possessor is entitled to enforce its terms.” Clarke, 87 So.
3d at 61.

The Bank argues that Clarke supports an affirmance, but Clarke is
distinguishable. In that case, the bank provided a copy of the note at trial because “[t]he
original note had been filed with the clerk of court and was in the court file in preparation
for an earlier scheduled summary judgment hearing.” Id. at 59. Although the defense
did not make a contemporaneous best evidence objection, it did argue at the close of
evidence that the bank had failed to prove a prima facie case because it did not present
the original note as evidence. Id. at 60. The Fourth District held that the bank “satisfied
the requirements of the best evidence rule and Florida case law by having surrendered
the original note to the court file prior to the time it offered the copy in evidence at trial.”
Id. at 59. In doing so, the court concluded that because there was no dispute that the
copy and the original note were precisely the same and that the original had been
surrendered to the court file, the trial judge’s admitting the copy into evidence “was
tantamount to taking judicial notice that the note had been surrendered to the court file
and that the rationale underlying the best evidence rule was satisfied.” Id. at 62.

In contrast, Heller disputed in her affirmative defenses that the Bank could
produce the original to file with the court. There was nothing more than the
representation of counsel to establish that the original had indeed been surrendered to
the clerk of court and no indication that the trial court had made a comparison of the
copy to the original. Moreover, the trial court’s suggestion that defense counsel visit the
clerk’s office to verify that the original had been filed cannot be said to be “tantamount to
taking judicial notice that the note had been surrendered to the court file.” Id.

The parties did not stipulate that the document in the court file was, in fact,
the original note. Without a stipulation by the parties, the trial court cannot rely on an
unsworn statement of counsel to make a factual determination. Blimpie Capital
Venture, Inc. v. Palms Plaza Partners, Ltd., 636 So. 2d 838, 840 (Fla. 2d DCA 1994).
And neither a trial court nor an appellate court can consider as fact an unproven
statement that is documented only by counsel. Id.; see also Deutsche Bank Nat’l Trust
Co. v. Huber, 137 So. 3d 562, 564 (Fla. 4th DCA 2014) (stating that the court could not
make a leap of faith that a note surrendered to the clerk was the original when such a
determination was not supported by the record before it in which only a copy of the note
was admitted in evidence).

The Bank, as the proponent of the evidence, failed to carry its burden of
proof. See Mazine v. M & I Bank, 67 So. 3d 1129, 1131-32 (Fla. 1st DCA 2011). The
trial court had before it only the copy of the note and counsel’s unsworn statement as to
the filing of the purported original note. Because the trial court improperly admitted the
copy of the note over objection in violation of section 90.953(1), we reverse and remand
for a new trial. See Sas v. Fed. Nat’l Mortg. Ass’n, 112 So. 3d 778, 780 (Fla. 2d DCA
2013) (reversing when evidence was improperly admitted over objection to prove the
amount of the debt and remanding for further proceedings to properly establish amounts
due and owing).

In addition, we address the trial court’s admission of hearsay testimony by
the Bank’s representative. Without personal knowledge, the representative testified
regarding when the Bank possessed the note based on business records that were not
introduced into evidence. The trial court improperly allowed the Bank’s representative
to testify over a hearsay objection to the contents of business records that had not been
admitted into evidence. See Sas, 112 So. 3d at 779.

Accordingly, we reverse the final judgment of foreclosure and remand for
a new trial.

Reversed and remanded.

SLEET and SALARIO, JJ., Concur.

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Seattle council committee votes to divest $3Billion from Wells Fargo over DAPL

Seattle council committee votes to divest $3Billion from Wells Fargo over DAPL

King5-

Seattle is on track to end ties with Wells Fargo over the Dakota Access Oil Pipeline.

The Seattle City Council Finance Committee voted 8-0 on Wednesday to divest $3 billion in City of Seattle money out of Wells Fargo over the bank’s role as lender for the Dakota Access Pipeline and seek a more socially responsible bank to manage the city’s money.

[KING5]

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



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OC INTERIOR SERVICES v NATIONSTAR | CA Appeals Ct – We reverse as the void default judgment was a nullity for all purposes, including as against a purported bona fide purchaser for value

OC INTERIOR SERVICES v NATIONSTAR | CA Appeals Ct – We reverse as the void default judgment was a nullity for all purposes, including as against a purported bona fide purchaser for value

h/T Gary Dubin Law

Filed 1/31/17

CERTIFIED FOR PUBLICATION

COURT OF APPEAL,
FOURTH APPELLATE DISTRICT
DIVISION ONE STATE OF CALIFORNIA

OC INTERIOR SERVICES, LLC as Trustee, etc.,
Plaintiff and Respondent,

v.

NATIONSTAR MORTGAGE, LLC et al.,
Defendants and Appellants.

In this case, plaintiff OC Interior Services, Inc. (OCI) purchased real property
knowing about a recorded default judgment in the chain of title that vacated the lien
interest of the predecessor-in-interest to appellants Deutsche Bank National Trust
Company, in Trust for the Harborview Mortgage Loan Pass-Through Certificates, Series
2007-7 (Deutsche Bank) and Nationstar Mortgage, LLC (Nationstar, together appellants).
The default judgment was later adjudicated as void. The question presented is whether
OCI, a purported bona fide purchaser for value, took title to the property subject to
appellants’ lien. The trial court found that OCI was a bona fide purchaser for value that
took title to the property free of appellants’ lien. We reverse as the void default judgment
was a nullity for all purposes, including as against a purported bona fide purchaser for
value.

[…]

As we shall explain, we agree with appellants. We first address the concept of a
judgment that is void on the face of the record versus a judgment that appears valid on
the face of the record and explain why this distinction makes no difference when a
judgment is ultimately declared void. We then explain why even a bona fide purchaser
cannot claim title clear of the First DOT based on a void judgment.

[…]

 

Down Load PDF of This Case

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CFPB Orders Prospect Mortgage to Pay $3.5 Million Fine for Illegal Kickback Scheme

CFPB Orders Prospect Mortgage to Pay $3.5 Million Fine for Illegal Kickback Scheme

Real Estate Brokers and Mortgage Servicer That Took Kickbacks from Prospect Also Ordered to Pay $495,000

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today took action against Prospect Mortgage, LLC, a major mortgage lender, for paying illegal kickbacks for mortgage business referrals. The CFPB also took action against two real estate brokers and a mortgage servicer that took illegal kickbacks from Prospect. Under the terms of the action announced today, Prospect will pay a $3.5 million civil penalty for its illegal conduct, and the real estate brokers and servicer will pay a combined $495,000 in consumer relief, repayment of ill-gotten gains, and penalties.

“Today’s action sends a clear message that it is illegal to make or accept payments for mortgage referrals,” said CFPB Director Richard Cordray. “We will hold both sides of these improper arrangements accountable for breaking the law, which skews the real estate market to the disadvantage of consumers and honest businesses.”

Prospect Mortgage, LLC, headquartered in Sherman Oaks, Calif., is one of the largest independent retail mortgage lenders in the United States, with nearly 100 branches nationwide. RGC Services, Inc., (doing business as ReMax Gold Coast), based in Ventura, Calif., and Willamette Legacy, LLC, (doing business as Keller Williams Mid-Willamette), based in Corvallis, Ore., are two of more than 100 real estate brokers with which Prospect had improper arrangements. Planet Home Lending, LLC is a mortgage servicer headquartered in Meriden, Conn., that referred consumers to Prospect Mortgage and accepted fees in return.

The CFPB is responsible for enforcing the Real Estate Settlement Procedures Act, which was enacted in 1974 as a response to abuses in the real estate settlement process. A primary purpose of the law is to eliminate kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services. The law covers any service provided in connection with a real estate settlement, such as title insurance, appraisals, inspections, and loan origination.

Prospect Mortgage

Prospect Mortgage offers a range of mortgages to consumers, including conventional, FHA, and VA loans. From at least 2011 through 2016, Prospect Mortgage used a variety of schemes to pay kickbacks for referrals of mortgage business in violation of the Real Estate Settlement Procedures Act. For example, Prospect established marketing services agreements with companies, which were framed as payments for advertising or promotional services, but in this case actually served to disguise payments for referrals. Specifically, the CFPB found that Prospect Mortgage:

  • Paid for referrals through agreements: Prospect maintained various agreements with over 100 real estate brokers, including ReMax Gold Coast and Keller Williams Mid-Willamette, which served primarily as vehicles to deliver payments for referrals of mortgage business. Prospect tracked the number of referrals made by each broker and adjusted the amounts paid accordingly. Prospect also had other, more informal, co-marketing arrangements that operated as vehicles to make payments for referrals.
  • Paid brokers to require consumers – even those who had already prequalified with another lender – to prequalify with Prospect: One particular method Prospect used to obtain referrals under their lead agreements was to have brokers engage in a practice of “writing in” Prospect into their real estate listings. “Writing in” meant that brokers and their agents required anyone seeking to purchase a listed property to obtain prequalification with Prospect, even consumers who had prequalified for a mortgage with another lender.
  • Split fees with a mortgage servicer to obtain consumer referrals: Prospect and Planet Home Lending had an agreement under which Planet worked to identify and persuade eligible consumers to refinance with Prospect for their Home Affordable Refinance Program (HARP) mortgages. Prospect compensated Planet for the referrals by splitting the proceeds of the sale of such loans evenly with Planet. Prospect also sent the resulting mortgage servicing rights back to Planet.

Under the consent order issued today, Prospect will pay $3.5 million to the CFPB’s Civil Penalty Fund for its illegal kickback schemes. The company is prohibited from future violations of the Real Estate Settlement Procedures Act, will not pay for referrals, and will not enter into any agreements with settlement service providers to endorse the use of their services.

The consent order filed against Prospect Mortgage is available at: http://files.consumerfinance.gov/f/documents/201701_cfpb_ProspectMortgage-consent-order.pdf

ReMax Gold Coast and Keller Williams Mid-Willamette

ReMax Gold Coast and Keller Williams Mid-Willamette are real estate brokers that work with consumers seeking to buy or sell real estate. Brokers or agents often make recommendations to their clients for various services, such as mortgage lending, title insurance, or home inspectors. Among other things, the Real Estate Settlement Procedures Act prohibits brokers and agents from exploiting consumers’ reliance on these recommendations by accepting payments or kickbacks in return for referrals to particular service providers.

The CFPB’s investigation found that ReMax Gold Coast and Keller Williams Mid-Willamette accepted illegal payment for referrals. Both companies were among more than 100 brokers who had marketing services agreements, lead agreements, and desk-license agreements with Prospect, which were, in whole or in part, vehicles to obtain illegal payments for referrals.

Under the consent orders filed today, both companies are prohibited from violating the Real Estate Settlement Procedures Act, will not pay or accept payment for referrals, and will not enter into any agreements with settlement service providers to endorse the use of their services. ReMax Gold Coast will pay $50,000 in civil money penalties, and Keller Williams Mid-Willamette will pay $145,000 in disgorgement and $35,000 in penalties.

The consent order filed against ReMax Gold Coast is available at: http://files.consumerfinance.gov/f/documents/201701_cfpb_RGCServices-consent-order.pdf

The consent order filed against Keller Williams Mid-Willamette is available at:http://files.consumerfinance.gov/f/documents/201701_cfpb_Willamette-Legacy-consent-order.pdf

Planet Home Lending

In 2012, Planet Home Lending signed a contract with Prospect Mortgage that facilitated the payment of illegal referral fees. The company’s practices violated the Real Estate Settlement Procedures Act and the Fair Credit Reporting Act. Specifically, the CFPB found that Planet Home Lending:

  • Accepted fees from Prospect for referring consumers seeking to refinance: Under their arrangement, Planet Home Lending took half the proceeds earned by Prospect for the sale of each mortgage loan originated as a result of a referral from Planet. Planet also accepted the return of the mortgage servicing rights of that consumer’s new mortgage loan.
  • Unlawfully used “trigger leads” to market to Prospect to consumers: Planet ordered “trigger leads” from one of the major consumer reporting agencies to identify which of its consumers were seeking to refinance so it could market Prospect to them. This was a prohibited use of credit reports under the Fair Credit Reporting Act because Planet was not a lender and could not make a firm offer of credit to those consumers.

Under the consent order filed against Planet Home Lending, the company will directly pay harmed consumers a total of $265,000 in redress. The company is also prohibited from violating the Fair Credit Reporting Act and the Real Estate Settlement Procedures Act, will not pay or accept payment for referrals, and will not enter into any agreements with settlement service providers to endorse the use of their services.

The consent order filed against Planet Home Lending is available at: http://files.consumerfinance.gov/f/documents/201701_cfpb_PlanetHomeLending-consent-order.pdf

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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.

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The CFPB’s arbitration rule would restore consumers’ ability to join together in court to hold banks and lenders accountable when they break the law.

The CFPB’s arbitration rule would restore consumers’ ability to join together in court to hold banks and lenders accountable when they break the law.

OVERVIEW

Banks and lenders bury terms in the fine print to block consumers from challenging fraud or hidden fees in court. Instead, these “ripoff clauses” force harmed consumers to challenge large corporations one by one in arbitration – a secretive system designed to favor banks and lenders.

Known as forced arbitration, this practice deprives consumers of their constitutional right to an impartial judge or jury. Instead, banks choose a private arbitration firm to decide the dispute, and consumers have little opportunity to present evidence or appeal a bad decision.

Many ripoff clauses also bar consumers from talking about what happened to them, keeping corporate scams and fraud out of the public eye. Indeed, reports show Wells Fargo customers tried to sue the bank over fake accounts as far back as 2013. But customers were kicked out of court and unable to share their stories because of these fine-print provisions – while Wells Fargo knowingly profited from fraud for another three years.

Acting at the direction of Congress, the U.S. Consumer Financial Protection Bureau (CFPB) spent over three years conducting the most comprehensive study on arbitration ever done. The data revealed that just 25 consumers pursue arbitration claims of less than $1,000 each year, as the vast majority of Americans simply give up when forced into arbitration. The study also suggests that consumers lose in arbitration, even when they win. Only 9% of consumers succeed in arbitration, and even those who win recover just 12 cents of every dollar claimed. In contrast, companies win 93% of the time, recovering 98 cents per dollar.

Following the study, the CFPB proposed a rule to restore customers’ ability to join together in court to hold banks and lenders accountable when they break the law and return transparency to arbitration by creating a public record of claims and outcomes.

[RULES AT RISK]

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Remember Robo-Signing at Banks? Neither Does Mnuchin

Remember Robo-Signing at Banks? Neither Does Mnuchin

Bloomberg View-

The question could not have been more straightforward: During the foreclosure crisis that began after the housing bubble burst, did OneWest Bank engage in the illegal practice of “robo-signing” to speed foreclosures of homeowners? OneWest was formerly known as Indy Mac, the troubled thrift taken over by the federal government and sold to a group led by Steven Mnuchin, President Donald Trump’s nominee to be Treasury secretary.

Mnuchin’s answer was straightforward, too. “OneWest Bank did not robo-sign documents,” he replied in a letter to the Democrats on the Senate Finance Committee who had repeatedly pressed him during his confirmation hearing. “And,” he added, “as the only bank to successfully complete the Independent Foreclosure Review required by federal banking regulators to investigate allegations of ‘robo-signing,’ I am proud of our institution’s extremely low error rate.”

As has so often been the case in the early days of the Trump administration, Mnuchin’s answer isn’t remotely true.

[BLOOMBERG VIEW]

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Court Orders Justice Dept. to Release Fannie Mae and Freddie Mac Documents

Court Orders Justice Dept. to Release Fannie Mae and Freddie Mac Documents

NYT-

Casting a ray of sunlight on a case that has been shrouded in secrecy, a federal appeals court ruled on Monday that the government must produce a raft of documents to plaintiffs suing over its decision to seize all the profits of Fannie Mae and Freddie Mac, the mortgage finance giants that were put into conservatorship in September 2008, at the depths of the financial crisis.

The case against the government was brought in 2013 by Fairholme Funds, a mutual fund that owns shares of Fannie Mae and Freddie Mac. Its lawyers contend that the government’s surprise decision to divert the companies’ profits to the United States Treasury in August 2012, just as the companies were turning around, was an illegal seizure of private property.

The government has argued that the profit sweep was necessary to protect taxpayers against further losses; taxpayers advanced $187 billion to the companies after they were put into conservatorship. But documents unsealed last year in the case cast doubt on this argument, showing that the timing of the profit sweep coincided with a rebound in the companies’ operations and occurred just before they began generating profits again.

[NEW YORK TIMES]

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IL SB0718 | 2017-2018 | 100th General Assembly – Amends the Mortgage Foreclosure Article of the Code of Civil Procedure. Provides that provisions concerning an additional fee paid by residential foreclosure plaintiffs

IL SB0718 | 2017-2018 | 100th General Assembly – Amends the Mortgage Foreclosure Article of the Code of Civil Procedure. Provides that provisions concerning an additional fee paid by residential foreclosure plaintiffs

Status

Spectrum: Partisan Bill (Democrat 1-0)
Status: Introduced on January 30 2017 – 25% progression
Action: 2017-01-30 – Referred to Assignments
Pending: Senate Assignments Committee
Text: Latest bill text (Introduced) [HTML]

 

Summary

Amends the Mortgage Foreclosure Article of the Code of Civil Procedure. Provides that provisions concerning an additional fee paid by residential foreclosure plaintiffs is operative until January 1, 2020 (instead of January 1, 2018). Effective immediately.
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Foreclosure fanatic: Mnuchin’s past actions make him a risky selection

Foreclosure fanatic: Mnuchin’s past actions make him a risky selection

The Hill-

The recent hearing on the nomination of Steven Mnuchin for secretary of the Treasury Department revealed a man unable or unwilling to provide many additional facts about his controversial history running OneWest Bank.

Mnuchin said in his Senate confirmation hearing that he was proud of his work, but the facts show there’s little to admire about Mnuchin’s tenure, but much doubt about his ability to be a good Treasury secretary.

Mnuchin purchased the loans of struggling homeowners at an enormous discount, with the benefit of billions of dollars in government backstops.

[THE HILL]

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Wells Fargo Complaints Vanish From Labor Department Website

Wells Fargo Complaints Vanish From Labor Department Website

HuffPO-

In the latest example of an apparent information purge by the Trump administration, bank employee complaints against Wells Fargo have vanished from the federal Department of Labor’s website.

The entire page established to help protect whistleblowers and collect complaints against the bank has been “disappeared.” The page was created in September when the Labor Department launched an investigation into the bank’s treatment of its workers after Wells Fargo admitted setting up secret phony customer accounts to capture bank fees and charge consumers for them. Labor officials sought to aid whistleblowers and to determine if the company violated any wage and overtime regulations while branch employees were pressed to meet tough sales quotas, including setting up the phony accounts.

The bank fired 5,300 workers for creating as many as 2 million fake accounts amid employee complaints about an incredibly high-pressure sales culture and mistreatment of workers.

[HUFFINGTONPOST]

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TFH 1/29 | Foreclosure Workshop #26: OneWest v. Katonah Development — A Case Study Documenting Ten Ways in Which Steve Mnuchin’s OneWest Appears To Have Ruthlessly and Criminally Defrauded America’s Homeowners, State and Federal Courts, and the United States Treasury from 2009 to 2015

TFH 1/29 | Foreclosure Workshop #26: OneWest v. Katonah Development — A Case Study Documenting Ten Ways in Which Steve Mnuchin’s OneWest Appears To Have Ruthlessly and Criminally Defrauded America’s Homeowners, State and Federal Courts, and the United States Treasury from 2009 to 2015

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 – January 29, 2017

Foreclosure Workshop #26:
OneWest v. Katonah Development —
A Case Study Documenting Ten Ways in Which Steve Mnuchin’s OneWest Appears To Have Ruthlessly and Criminally Defrauded America’s Homeowners, State and Federal Courts, and the United States Treasury from 2009 to 2015
——————-

In recent weeks The Foreclosure Hour has been bombarded with inquiries from homeowners, reporters, and consumer activists seeking more information and examples, in connection with current Congressional Treasury Secretary appointment hearings, of the ways in which Steve Mnuchin may have abusively managed OneWest Bank from 2009 to 2015.

Unable time-wise to individually respond to the hundreds of such inquires, we have decided instead to explore the topic and such claims on this Sunday’s radio show.

While The Foreclosure Hour has no direct information concerning Steve Mnuchin’s personal involvement in OneWest’s many mortgage abuses, we are aware of hundreds if not thousands of such court cases nationally illustrating such abuses carried out in the name of OneWest.

Was Steve Mnuchin the “King of Foreclosures” and the “King of Robo-Signers” as many claim, or the “King of Loan Modifications” as he reportedly claims — or both? Tune in and decide for yourself.

We have selected one such OneWest foreclosure case on the Big Island of Hawaii to illustrate the apparent wide range of such claimed OneWest abuses, involving insider trading, robo-signing, submitting into evidence of false court documents including those falsely recorded, fraudulent credit bidding, insurance fraud, unfair and deceptive property flipping, false claims act violations, corruption of the legal profession, federal and state financial crimes, and RICO yielding racketeering ill-gotten gains.

Listeners are encouraged to call in with their own personal experiences with OneWest, good or bad, in their individual foreclosure cases.

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.

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

The Foreclosure Hour 12

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Government’s Fannie Mae will back PE giant Blackstone’s rental homes debt

Government’s Fannie Mae will back PE giant Blackstone’s rental homes debt

CNBC-

Mortgage giant Fannie Mae is getting into the single-family rental business in a big way.

The government-backed agency said it is going into business with private equity giant and major housing player Blackstone by backing $1 billion in debt. Blackstone’s Invitation Homes filed for an initial public offering this week, and the Fannie Mae relationship was disclosed afterward. Blackstone is looking to raise $1.6 billion by selling shares to the public.

Fannie Mae, currently under government conservatorship, will back $1 billion in debt collateralized by rental homes owned by Blackstone.

[CNBC]

image:

Kevin Lamarque | Reuters
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Citigroup Paying $18 Million for Overbilling Clients

Citigroup Paying $18 Million for Overbilling Clients

FOR IMMEDIATE RELEASE
2017-35

Washington D.C., Jan. 26, 2017 —The Securities and Exchange Commission today announced that Citigroup Global Markets has agreed to pay $18.3 million to settle charges that it overbilled investment advisory clients and misplaced client contracts.

The SEC’s order finds that at least 60,000 advisory clients were overcharged approximately $18 million in unauthorized fees because Citigroup failed to confirm the accuracy of billing rates entered into its computer systems in comparison to fee rates outlined in client contracts, billing histories, and other documents.  Citigroup also improperly collected fees during time periods when clients suspended their accounts.  The billing errors occurred during a 15-year period, and the affected clients have since been reimbursed.

“Advisory clients have every expectation that the fees charged by their financial adviser reflect the negotiated rate.  Citigroup failed to take the necessary precautions to ensure clients were billed in a manner consistent with their advisory agreements,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.

The SEC’s order further finds that Citigroup cannot locate approximately 83,000 advisory accounts opened from 1990 to 2012.  Without those missing advisory contracts, Citigroup could not properly validate whether the fee rates negotiated by clients when accounts were opened were the same advisory fee rates being billed to clients over the years.  It is estimated that Citigroup received approximately $3.2 million in excess fees from advisory clients whose contracts were lost.

“It’s a fundamental responsibility of a financial adviser to preserve key account documents such as advisory contracts.  Citigroup failed to safeguard its client contracts, which seriously impeded its ability to determine the proper amount of fees the firm was authorized to charge,” said Sanjay Wadhwa, Senior Associate Director of the SEC’s New York office.

Citigroup consented to the SEC’s cease-and-desist order and agreed to undertakings related to its fee-billing and books-and-records practices.  The firm is censured and must pay $3.2 million in disgorgement of the excess fees collected due to the missing contracts plus $800,000 in interest and a $14.3 million penalty.

The SEC’s investigation has been conducted by Olivia Zach and Celeste Chase in the New York office and supervised by Mr. Wadhwa.

###

Related Materials


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FL House Bill 471 | allow a lienholder to submit any document from a mortgagee’s bankruptcy case that suffices as an “admission by the defendant” that he or she intended to surrender the property.

FL House Bill 471 | allow a lienholder to submit any document from a mortgagee’s bankruptcy case that suffices as an “admission by the defendant” that he or she intended to surrender the property.

F L O R I D A    H O U S E   O F   R E P R E S E N T A T I V E S

HB471

1 A bill to be entitled 2 An act relating to mortgage foreclosures; creating s. 3 702.12, F.S.; authorizing certain lienholders to use 4 certain documents as an admission in an action to 5 foreclose a mortgage; providing that submission of 6 certain documents in a foreclosure action creates 7 certain presumptions; authorizing a lienholder to make 8 a request for judicial notice; providing construction; 9 providing an effective date. 10 11 Be It Enacted by the Legislature of the State of Florida: 12 13 Section 1. Section 702.12, Florida Statutes, is created to 14 read: 15 702.12 Actions in foreclosure.— 16 (1)(a) A lienholder, in an action to foreclose a mortgage, 17 may submit any document the defendant filed in a bankruptcy case 18 under penalty of perjury for use as an admission by the 19 defendant. 20 (b) The lienholder’s submission of a document that 21 evidences the defendant’s intention to surrender to the 22 lienholder the property that is the subject of the foreclosure, 23 which document has not been withdrawn by the defendant, together 24 with the submission of a final order entered in the bankruptcy 25 case that discharges the defendant’s debts or confirms the defendant’s repayment plan which intention is contained therein, 27 creates a rebuttable presumption that the defendant has: 28 1. Surrendered to the lienholder the defendant’s interest 29 in the mortgaged property; and 30 2. Waived any defenses to the foreclosure. 31 (2) In addition to a request set forth in s. 90.203, the 32 lienholder may request that the court take judicial notice of 33 any final order entered in a bankruptcy case. 34 (3) This section does not preclude the defendant in a 35 foreclosure action from raising a defense based upon the 36 lienholder’s conduct subsequent to the filing of the document 37 filed in the bankruptcy case that evidenced the defendant’s 38 intention to surrender the mortgaged property to the lienholder. 39 Section 2. This act shall take effect July 1, 2017.

Down Load PDF of This Case

https://www.flsenate.gov/Session/Bill/2017/0471

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Société Générale Agrees To Pay $50 Million Penalty To Settle RMBS Fraud Claims

Société Générale Agrees To Pay $50 Million Penalty To Settle RMBS Fraud Claims

United States Attorney Robert L. Capers announced today that Société Générale, S.A. will pay a $50 million civil penalty to resolve claims related to its activities, which were conducted through several affiliates (together, “SocGen”), in connection with the marketing, sale, and issuance of a residential mortgage-backed security (“RMBS”) named SG Mortgage Securities Trust 2006-OPT2 (“SG 2006-OPT2”). As part of the agreement, SocGen has acknowledged in writing that it made false representations to prospective investors in SG 2006-OPT2. Investors, including federally insured financial institutions, suffered significant losses on their investments in SG 2006-OPT2.

The settlement includes a statement of facts agreed to by SocGen, whereby SocGen acknowledges responsibility for its conduct. For example, SocGen acknowledges that it falsely represented to investors that the loans underlying SG 2006-OPT2 were originated generally in accordance with the loan originator’s underwriting guidelines. Indeed, as detailed in the statement of facts, SocGen’s third-party due diligence vendor for SG 2006-OPT2 determined that almost 40% of the loans it reviewed were underwritten outside of guidelines and lacked adequate compensating factors to make the loans eligible for securitization. SocGen acknowledges that it did not disclose these results to investors.

Likewise, SocGen represented to investors that, at the time of origination, no loan in SG 2006-OPT2 had a loan-to-value or combined loan-to-value ratio of more than 100% (in other words, that the value of any mortgage on a property did not exceed the value of the property itself) – a representation that SocGen now acknowledges was false. Moreover, SocGen knew that there were industry-wide problems with subprime loan origination practices. As described by a senior member of SocGen’s Contract Finance group, “The whole process [was] a joke.”

“SocGen’s acknowledgement of its misconduct in the securitization of SG 2006-OPT2 was a critical component of this resolution. It severely impacted investors and institutions across the United States, including in this district. Most emphatically, it was not a ‘joke’”, stated United States Attorney Capers. “We will not tolerate investment banks making false representations to investors – if and when they do so, they will be held accountable.” Mr. Capers extended his grateful appreciation to the Office of the Inspector General for the Federal Housing Finance Agency for its assistance in conducting the investigation in this matter.

The $50 million civil monetary penalty resolves claims under the Financial Institutions Reform Recovery and Enforcement Act of 1989, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. As part of the settlement, SocGen has agreed to fully cooperate with any ongoing investigations related to the conduct covered by the agreement.

Assistant U.S. Attorneys Clayton P. Solomon, Morgan J. Clark, and Katharine E.G. Brooker led the government’s investigation.

About the RMBS Working Group: The RMBS Working Group, part of the Financial Fraud Enforcement Task Force, was established by the Attorney General in late January 2012. The Working Group has been dedicated to initiating, organizing, and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market that helped precipitate the 2008 Financial Crisis. The Working Group’s efforts to date have resulted in settlements providing for tens of billions of dollars in civil penalties and consumer relief from banks and other entities that are alleged to have committed fraud in connection with the issuance of RMBS.

To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html

Topic:
Mortgage Fraud
StopFraud
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