Billion | FORECLOSURE FRAUD | by DinSFLA - Part 2

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Bank of America seeks to void verdict in $1.27 billion ‘Hustle’ case

Bank of America seeks to void verdict in $1.27 billion ‘Hustle’ case

Where else can you get caught with as much fraud as all these cartels and still stay in business and manage to service government related loans? Only in Amerika! Unfreakin Believable!

So lets get this straight. BOA has paid billions for other fraudulent acts and is saying this is no way, no how tied to fraud? REALLY??


Reuters-

Bank of America Corp on Thursday asked a federal judge to throw out a jury verdict finding it liable for fraud over defective mortgages sold by its Countrywide unit that resulted in a $1.27 billion penalty.

The bank urged U.S. District Judge Jed Rakoff in Manhattan to rule for it as a matter of law or order a new trial, arguing that the evidence at trial did not support the jury’s October 2013 verdict.

Bank of America said prosecutors were required at trial to prove that loans originated by Countrywide Financial Corp in a process called “Hustle” that were then sold to government mortgage finance giants Fannie Mae and Freddie Mac were not as good as the lender represented.

[REUTERS]

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HSBC, Nomura lose bid to avoid U.S. agency’s mortgage lawsuits

HSBC, Nomura lose bid to avoid U.S. agency’s mortgage lawsuits

Reuters-

A U.S. regulator can proceed with lawsuits accusing HSBC Holdings Plc and Nomura Holdings Inc of misleading Fannie Mae and Freddie Mac into buying mortgage-backed securities that later turned toxic, a federal judge ruled on Thursday.

The decision from U.S. District Judge Denise Cote in Manhattan clears the way for HSBC to face trial Sept. 29 in a case by the Federal Housing Finance Agency that the bank has estimated could expose it to $1.6 billion in liability.

FHFA launched 18 lawsuits in 2011 over about $200 billion in mortgage-backed securities. HSBC, Nomura and Royal Bank of Scotland Group Plc are the remaining banks being sued by the regulator.

[REUTERS]

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You Thought the Mortgage Crisis Was Over? It’s About to Flare Up Again

You Thought the Mortgage Crisis Was Over? It’s About to Flare Up Again

Tic-Toc…tic-toc


New Republic-

We are nearly eight years removed from the beginnings of the foreclosure crisis, with over five million homes lost. So it would be natural to believe that the crisis has receded. Statistics point in that direction. Financial analyst CoreLogic reports that the national foreclosure rate fell to 1.7 percent in June, down from 2.5 percent a year ago. Sales of foreclosed properties are at their lowest levels since 2008, and the rate of foreclosure starts—the beginning of the foreclosure process—is at 2006 levels. At the peak, 2.9 million homes suffered foreclosure filings in 2010; last year, the number was 1.4 million.

But these numbers are likely to reverse next year, with foreclosures spiking again. And it has nothing to do with recent-vintage loans, which actually have performed as well as any in decades. Instead, a series of temporary relief measures and legacy issues from the crisis will begin to bite in 2015, causing home repossessions that could present economic headwinds. In other words, the foreclosure crisis was never solved; it was deferred. And next year, the clock begins to run out on that deferral.

The problem comes from many different angles. First, as the Los Angeles Times reported recently, home equity lines of credit—second mortgages that homeowners took out during the bubble years, essentially using their homes as an ATM—will start to feature increased payments, as borrowers must pay back principal instead of just the interest. TransUnion, the credit rating firm, estimates that between $50 and $79 billion in home-equity loans risk default because of the increased payments, which could add hundreds or even thousands of dollars to payments a month.

Home equity resets will be concentrated in areas most affected by the housing bubble, because that’s where the most lending took place. These are precisely the areas whose economies remain depressed b_

[NEW REPUBLIC]

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FHFA Announces Settlement with Goldman Sachs

FHFA Announces Settlement with Goldman Sachs

HAPPY FRIDAY! In hopes this all is forgotten by Monday and so their stock don’t take a hit. Nice going as usual.

Heard from the sources that Wells Fargo is next…

FOR IMMEDIATE RELEASE
8/22/2014

? Washington, D.C. – The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, today announced it has reached a settlement with Goldman Sachs, related companies and certain named individuals.  The settlement addresses claims alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac between 2005 and 2007.

Under the terms of the settlement, Goldman Sachs will pay $3.15 billion in connection with releases and the purchase of securities that were the subject of statutory claims in the lawsuit FHFA v. Goldman Sachs & Co., et al., in the U.S. District Court of the Southern District of New York.  Goldman Sachs will pay approximately $2.15 billion to Freddie Mac and approximately $1 billion to Fannie Mae.  This settlement, worth approximately $1.2 billion, effectively makes Fannie Mae and Freddie Mac whole on their investments in the securities at issue.  As part of the settlement, FHFA, Fannie Mae and Freddie Mac will release certain claims against Goldman Sachs & Co. related to the securities involved.

The settlement also resolves claims that involved a Goldman Sachs security in FHFA v. Ally Financial Inc., et al.  FHFA previously settled claims against Ally Financial Inc.

This is the sixteenth settlement reached in the 18 PLS lawsuits? FHFA filed in 2011.  Three cases remain outstanding and FHFA is committed to satisfactory resolution of those actions.

Link to Settlement Agreement with Fannie Mae

Link to Settlement Agreement with Freddie Mac???

 

###

? The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.  These government-sponsored enterprises provide more than $5.6 trillion in funding for the U.S. mortgage markets and financial institutions.

Contacts:

?Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030?

SOURCE: fhfa.gov

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Some homeowners could get hit with a whopping tax bill if they accept help through Bank of America’s settlement

Some homeowners could get hit with a whopping tax bill if they accept help through Bank of America’s settlement

The never-ending saga…


WAPO-

The $17 billion settlement that Bank of America reached with the Department of Justice on Thursday provides mortgage debt relief for some troubled homeowners. But those that accept the help could get hit with a hefty tax bill later.

As part of the settlement, the bank agreed to spend $7 billion on helping struggling homeowners and communities, including lowering the mortgage balances of certain borrowers who owe more than their homes are worth. The problem is that some of these “underwater” borrowers might have to pay taxes on the debt that’s forgiven.

In 2007, Congress adopted a law that spared homeowners from being taxed on the amount of the loan that was written off. But that tax break expired in December, and now that kind of relief can be counted as income by the IRS, an issue we wrote about in April.

[WASHINGTON POST]

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A.G. Eric Schneiderman Led State & Federal Working Group Announces Record-Breaking $16.65 Billion Settlement With Bank Of America

A.G. Eric Schneiderman Led State & Federal Working Group Announces Record-Breaking $16.65 Billion Settlement With Bank Of America

RMBS Task Force, Co-Chaired By Schneiderman, Secures Settlement That Includes $800 Million For New Yorkers, Including, For The First Time, Relief For Borrowers With FHA-Insured Loans

Settlement Addresses Misconduct That Contributed To The 2008 Financial Crisis

Schneiderman: “Today’s Settlement Is A Major Victory In The Fight To Hold Those Who Caused The Financial Crisis Accountable”

NEW YORK – Attorney General Eric T. Schneiderman today joined members of a state and federal working group he co-chairs to announce a $16.65 billion settlement with Bank of America. The settlement is the largest in U.S. history with a single institution, surpassing the $13 billion settlement with JPMorgan Chase that was secured by the same state and federal working group last November. The settlement includes $800 million – $300 million in cash, and a minimum of $500 million worth of consumer relief – that will be allocated to New York State. As part of today’s settlement, Bank of America acknowledged it made serious misrepresentations to the public – including the investing public – arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS) by Bank of America, as well as by Countrywide Financial and Merrill Lynch, institutions that Bank of America acquired in 2008. The resolution also requires Bank of America to provide relief to underwater homeowners, distressed borrowers, and affected communities through a variety of means, including relief that for the first time will assist certain homeowners with mortgages insured by the Federal Housing Administration (FHA) who were ineligible for relief under previous settlements.

The settlement requires Bank of America to pay $9.65 billion in hard dollars and provide $7 billion in consumer relief. New York State will receive at least $800 million: $300 million in cash and a minimum of $500 million in consumer relief for struggling New Yorkers. The settlement was negotiated through the Residential Mortgage-Backed Securities Working Group, a joint state and federal working group formed in 2012 to share resources and continue investigating wrongdoing in the mortgage-backed securities market prior to the financial crisis. Attorney General Schneiderman co-chairs the RMBS working group.

“Since my first day in office, one of my top priorities has been to pursue accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said Attorney General Schneiderman. “This historic settlement builds upon our work bringing relief to families around the country and across New York who were hurt by the housing crisis, and is exactly what our working group was created to do. The frauds detailed in Bank of America’s statement of facts harmed countless of New York homeowners and investors. Today’s result is a major victory in the fight to hold those who caused the financial crisis accountable.”

The settlement includes an agreed-upon statement of facts that describes how Bank of America, Merrill Lynch and Countrywide made representations to RMBS investors about the quality of the mortgage loans they securitized and sold to investors.  Contrary to those representations, the firms securitized and sold RMBS with underlying mortgage loans that they knew had material defects. Bank of America also made representations to the FHA, an agency within the U.S. Department of Housing and Urban Development, about the quality of FHA-insured loans that Bank of America originated and underwrote. Contrary to those representations, Bank of America originated and underwrote FHA-insured mortgages that were not eligible for FHA insurance. Bank of America and Countrywide also made representations and warranties to Fannie Mae and Freddie Mac about mortgages they originated and sold to those Government Sponsored Entities (GSE’s). Contrary to those representations and warranties, many of those mortgages were defective or otherwise ineligible for sale to GSE’s.

As the statement of facts explains, on a number of occasions, Merrill Lynch employees learned that significant percentages of the mortgage loans reviewed by a third party due diligence firm had material defects. Significant numbers of loans—50% in at least one pool—that were found in due diligence not to have been originated in compliance with applicable laws and regulations, not to be in compliance with applicable underwriting guidelines and lacking sufficient offsetting compensating factors, and loans with files missing one or more key pieces of documentation were nevertheless waived into the purchase pool for securitization and sale to investors. In an internal email that discussed due diligence on one particular pool of loans, a consultant in Merrill Lynch’s due diligence department wrote: “[h]ow much time do you want me to spend looking at these [loans] if [the co-head of Merrill Lynch’s RMBS business] is going to keep them regardless of issues? . . . Makes you wonder why we have due diligence performed other than making sure the loan closed.” A report by one of Merrill Lynch’s due diligence vendors found that from the first quarter of 2006 through the second quarter of 2007, 4,009 loans that were part of loan pool samples reviewed by the vendor were not in compliance with underwriting guidelines or applicable laws and regulations, and were waived in to purchase pools by Merrill Lynch. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.

Attorney General Schneiderman was elected in 2010 and took office in 2011, when the five largest mortgage servicing banks, 49 state attorneys general, and the federal government were on the verge of agreeing to a settlement that would have released the banks – including Bank of America – from liability for virtually all misconduct related to the financial crisis. Attorney General Schneiderman refused to agree to such sweeping immunity for the banks. As a result, Attorney General Schneiderman secured a settlement that preserved a wide range of claims for further investigation and prosecution.

In his 2012 State of the Union address, President Obama announced the formation of the RMBS Working Group. The collaboration brought together the Department of Justice (DOJ), other federal entities, and several state law enforcement officials – co-chaired by Attorney General Schneiderman – to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. The negotiations for settlement, which were led by Associate Attorney General Tony West of DOJ, were part of the RMBS Working Group.

Under the settlement, Bank of America will be required to provide a minimum of $500 million in creditable consumer relief directly to struggling families and communities across the state. The settlement includes a menu of options for consumer relief to be provided, and different categories of relief are credited at different rates toward the bank’s $500 million obligation. The agreement also requires Bank of America to provide minimum amounts of creditable relief under certain priority categories in New York. The Consumer Relief Credit Menu, available here, details the how each category of relief will be credited and the minimum amounts for each category where applicable.

The most significant priority on the Consumer Relief Credit Menu is a change that will allow first lien principal reductions for certain types of FHA-insured mortgages. Borrowers with these types of loans have previously been excluded from getting the benefits of principal reduction under past settlements, despite the fact that a significant number of distressed loans fall into this category. According to data collected by the Office of the Attorney General, roughly 23% of all distressed loans in New York have FHA insurance, and FHA-insured loans represent the largest portion of Bank of America’s remaining distressed loan portfolio in New York.

Attorney General Schneiderman made it a high priority to extend principal forgiveness to FHA-insured mortgages in negotiations with Bank of America, and their inclusion in this settlement represents a huge step forward in Attorney General Schneiderman’s ongoing commitment to helping families move past the foreclosure crisis.

“Empire Justice Center is very pleased that the settlement with Bank of America provides for principal balance reductions on FHA-insured loans,” said Kirsten Keefe, Senior Attorney at the Empire Justice Center. “This is a critical component that has not been included in prior bank settlements. It has left homeowners with FHA loans at a disadvantage when trying to negotiate with their bank to save their homes. We thank Attorney General Schneiderman for making this a priority in the Bank of America Settlement.”

Bank of America will provide a minimum of $60 million in first lien principal reductions in New York, including the FHA-insured portfolio. Other New York-specific minimum requirements for consumer relief under this settlement include:

  • A minimum value of $20 million in donations, including cash and contributions of vacant and abandoned properties to land banks, units of local government and other nonprofits. Bank of America estimates that this will help address as many as 300 vacant properties—also known as zombie properties—across the state of New York.
  • The bank must also earn at least $35 million in credits for making cash donations to legal service providers, housing counseling agencies, land banks and other community development nonprofits. These relief options are a direct compliment to the investment Attorney General Schneiderman has made to these types of programs over the past three years, including more than $60 million in funding to support a network of housing counseling and legal service provider across the state under the Homeowner Protection Program (HOPP), which has provided free, high-quality services to more than 30,000 homeowners since launching in 2012.
  • Bank of America must also provide $125 million in credits to create and preserve hundreds of units of affordable rental housing across New York State. This initiative is particularly critical in New York, where affordable rental housing is scarce and many families are struggling to find decent and affordable alternatives to homeownership following the economic crisis.

New York City Mayor Bill DeBlasiosaid, “We’re in the midst of an affordability crisis hitting New Yorkers from the very poor to those once solidly middle class. We are deeply grateful to the Attorney General for securing a historic settlement that will make a real difference for families struggling across the city and state. We are pushing hard to build and preserve an unprecedented amount of affordable housing to meet this crisis, and the Attorney General’s continued advocacy is proving vitally important in supporting that effort.”

“We applaud AG Schneiderman’s efforts to hold the too-big-to-fail banks accountable to lower income communities,” said Josh Zinner, Co-Director of New Economy Project. “We are hopeful that this settlement will provide relief to people and communities that have been hardest hit by predatory lending and high rates of foreclosure.”

Compliance with the settlement will be overseen by an independent monitor who will be responsible for ensuring that targets under the settlement are met and that quarterly reporting requirements, which will measure how relief is being allocated at a Census Tract level, are made available to the public.

This matter was led by former Deputy Attorney General for Economic Justice Virginia Chavez Romano, Chief of the Investor Protection Bureau Chad Johnson, Senior Enforcement Counsel for Economic Justice Steven Glassman, and Assistant Attorneys General in the Investor Protection Bureau Hannah Flamenbaum and Melissa Gable.

SOURCE: http://ag.ny.gov

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Countrywide’s Mozilo Said to Face U.S. Suit Over Loans

Countrywide’s Mozilo Said to Face U.S. Suit Over Loans

AND …Again…But aren’t the statute of limitations NOW after them? I’m sure they are! Nice try Holder, Nice try!

Look forward to the complaint coming soon.


Bloomberg-

Countrywide Financial Corp. co-founder Angelo Mozilo hasn’t escaped the wrath of prosecutors for his company’s role in inflating the U.S housing bubble that preceded the financial crisis.

More than 12 months after a deadline passed to file criminal charges, U.S. attorneys in Los Angeles are preparing a civil lawsuit against Mozilo and as many as 10 other former Countrywide employees, according to two people with knowledge of the matter.

The government is making a last ditch-effort to hold him accountable for the excesses of the past decade’s subprime-mortgage boom, using a 25-year-old law that has helped the Justice Department win billions of dollars from Wall Street banks, said the people, who weren’t authorized to discuss the case publicly.

[BLOOMBERG]

image: Jay Mallin/Bloomberg

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Inside the Dark, Lucrative World of Consumer Debt Collection

Inside the Dark, Lucrative World of Consumer Debt Collection

NYT-

One afternoon in October 2009, a former banking executive named Aaron Siegel waited impatiently in the master bedroom of a house in Buffalo that served as his office. As he stared at the room’s old fireplace and then out the window to the quiet street beyond, he tried not to think about his investors and the $14 million they had entrusted to him. Siegel was no stranger to money. He grew up in one of the city’s wealthiest and most prominent families. His father, Herb Siegel, was a legendary playboy and the majority owner of a hugely profitable personal-injury law firm. During his late teenage years, Aaron lived essentially unchaperoned in a sprawling, 100-year-old mansion. His sister, Shana, recalls the parties she hosted — lavish affairs with plenty of Champagne — and how their private-school classmates would often spend the night, as if the place were a clubhouse for the young and privileged.

So how, Siegel wondered, had he gotten into his current predicament? His career started with such promise. He earned his M.B.A. from the highly regarded Simon Business School at the University of Rochester. He took a job at HSBC and completed the bank’s executive training course in London. By all indications, he was well on his way to a very respectable future in the financial world. Siegel was smart, hardworking and ambitious. All he had to do was keep moving up the corporate ladder.

Instead, he decided to take a gamble. Siegel struck out on his own, investing in distressed consumer debt — basically buying up the right to collect unpaid credit-card bills. When debtors stop paying those bills, the banks regard the balances as assets for 180 days. After that, they are of questionable worth. So banks “charge off” the accounts, taking a loss, and other creditors act similarly. These huge, routine sell-offs have created a vast market for unpaid debts — not just credit-card debts but also auto loans, medical loans, gym fees, payday loans, overdue cellphone tabs, old utility bills, delinquent book-club accounts. The scale is breathtaking. From 2006 to 2009, for example, the nation’s top nine debt buyers purchased almost 90 million consumer accounts with more than $140 billion in “face value.” And they bought at a steep discount. On average, they paid just 4.5 cents on the dollar. These debt buyers collect what they can and then sell the remaining accounts to other buyers, and so on. Those who trade in such debt call it “paper.” That was Aaron Siegel’s business.

[NEW YORK TIMES]

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Who is Dyck-O’Neal, and why are they suing 10,000 Floridians for $1Billion?

Who is Dyck-O’Neal, and why are they suing 10,000 Floridians for $1Billion?

In a nutshell, on July 1, 2013, The Florida Legislature passed the Fair Foreclosure Act (or some other nonsense name) which gutted consumer rights in foreclosure cases, but it actually did one positive thing – it reduced the time period for filing a deficiency lawsuit from 5 years to one year after foreclosure sale.  A deficiency lawsuit seeks a money judgment for the difference between the money owed to the bank in the final judgment minus the fair market value of the collateral (house) at the time of the foreclosure sale.
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Anyway, for judgments entered prior to the enactment of the new law, the deadline for filing a deficiency was July 1, 2014.  
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Well, Dyck-O’Neal, Inc. approached Fannie Mae and bought up tens of thousands of stale foreclosure judgments for cheap since the statute of limitations was about to expire – The source I know estimates $1B worth of Florida deficiencies.  The deal probably took place last summer, just after the Act passed, and the portfolio consists primarily of the oldest possible judgments – late 2009 and early 2010.  
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This year (primarily April through June), D.O. has filed thousands lawsuits throughout Florida seeking enormous money judgments against consumers who thought the foreclosure crisis was in their rear view mirror.  There was an enormous volume just prior to July 1st deadline.  So thousands of these lawsuits are starting their journey through the pipeline.  I’ll bet 90+% of these consumers will be defaulted.
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It gets better.  D.O. is bringing these lawsuits in the county in which the foreclosure occurred.  They are choosing the foreclosure county because (I assume) they surmise the lawsuit is based upon the original mortgage and note which relate to real property in that county.  However, its clear that a deficiency judgment is merely a general unsecured debt, meaning that the only proper place to sue the former homeowner is in the county where they now reside.  THOUSANDS of these defendants reside outside the state of Florida – My source even represents someone who lives in Japan.  Currently, their firm represents dozens of these defendants.
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On Monday, Parker & Dufresne filed the attached class action lawsuit against The Law Offices of Daniel Consuegra and Dyck-O’Neal, Inc. (Copy attached).  Attached to our complaint, you will find a sample Dyck-O’Neal complaint.
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There are a few of angles here:
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1)  D.O. purchased the stalest of debts from Fannie.  Why?  Because (a) those are the people who have had the longest period to recover, and (b) this is when Florida home values were at their lowest, creating the greatest deficiency gap.  Imagine these people who have already taken the credit hit and have moved on, only to be sued 8 years after they walked away from their underwater home.
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2)  D.O. and its lawyers are knowingly violating the Federal Fair Debt Collections Practices Act by suing hundreds of out-of-state consumers on a purely unsecured debt.
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3)  Every one of these lawsuits attach two assignments – One from the original plaintiff to FNMA and another from FNMA to Dyck-O’Neal.  The FNMA to Dyck-O’Neal assignment is executed by an officer of Dyck-O’Neal “as attorney in fact for FNMA.”  See the attached POA which purportedly gave D.O. the power to do this back in October of 2008 pursuant to a separate “Deficiency Pursuit Agreement” from 2008.  I think this agreement raises all sorts of questions.  This is right after it was placed into conservatorship by the U.S. Treasury in September 2008.
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4)  Homeowners are getting it on both ends – Foreclosure courts, run by retired Senior Judges, rammed all of these foreclosures through the system with the justification of getting the collateral back to the banks.  In order to do this, these senior judges routinely rule in favor of the banks with watered-down evidence because the banks have such a hard time proving ownership of the loans.  I believe that these retired judges never thought FNMA would be showing up in court again to get these deficiency judgments. 
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5)  In addition to D.O., Mortgage Guaranty Insurance Corporation – a mortgage protection insurance company who paid out claims to servicers also filed a bunch of suits just under the deadline.  These suits were also filed by the same D.O. lawyers.  Many of these suits also violate the FDCPA by suing out of state defendants on unsecured claims.
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Huthsing v Dyck-O’Neal and Consuegra COMPLAINT

Dyck-O’Neal Power of Attorney

Attorney Chip Parker, www.jaxlawcenter.com

 

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Bank of America raises settlement offer for toxic mortgage deals to $7B cash. DOJ wants $10B

Bank of America raises settlement offer for toxic mortgage deals to $7B cash. DOJ wants $10B

NY TIMES-

Bank of America and federal prosecutors have accelerated their negotiations to resolve an investigation into the bank’s sale of troubled mortgage securities before the financial crisis. The two sides, however, remain far apart on crucial issues and a settlement remained elusive late Wednesday, even after the bank significantly raised its offer.

The bank’s lawyers and Justice Department prosecutors met in Washington on Wednesday to discuss the size of a potential cash penalty, a major sticking point in the settlement talks, according to people briefed on the meeting. Heading into the meeting, the Justice Department was demanding roughly $17 billion to settle the case, more than $10 billion in the form of a cash penalty and the rest in so-called soft dollar payments to help struggling homeowners.

The bank was offering a total of $13 billion, the people said, including $4 billion in cash. The bank narrowed the gap on Wednesday, the people said, raising its cash offer to about $7 billion and its total proposal to roughly $14 billion.

[NEW YORK TIMES]

image: Victoria Will/Reuters

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Judge Rakoff Orders Bank of America’s Countrywide ordered to pay $1.3B “BRAZEN FRAUD”

Judge Rakoff Orders Bank of America’s Countrywide ordered to pay $1.3B “BRAZEN FRAUD”

Bloomberg-

Bank of America Corp.’s Countrywide unit was ordered to pay $1.3 billion in penalties for defective mortgage loans sold to Fannie Mae and Freddie Mac in the run-up to the 2008 financial crisis, a little more than half of what the federal government had requested.

U.S. District Judge Jed Rakoff in Manhattan issued the civil penalty against the Charlotte, North Carolina-based bank today in the first mortgage-fraud case brought by the federal government to go to trial.

Countrywide and Rebecca Mairone, a former executive with the mortgage lender, were found liable by a jury in Manhattan federal court in October for selling thousands of bad loans to the two government-sponsored enterprises. Mairone was ordered to pay $1 million.

[BLOOMBERG]

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SB1987 | FACT SHEET: OPPOSE ACT TO CLEAR TITLE TO FORECLOSED PROPERTIES

SB1987 | FACT SHEET: OPPOSE ACT TO CLEAR TITLE TO FORECLOSED PROPERTIES

H/T Richard Zombeck

Massachusetts Alliance Against Predatory Lending
www.maapl.info

FACT SHEET: OPPOSE ACT TO CLEAR TITLE TO FORECLOSED PROPERTIES

Senate Bill 1987

Massachusetts’ Supreme Judicial Court has declared thousands of foreclosures void and homeowner rights violated. Massachusetts has a problem going forward with hundreds of thousands of titles to property, 65,000 of which were “foreclosed” homes. S1987’s attempt to deny former owners the right to regain illegally foreclosed property is not the same as clearing titles and is not the solution. It disparately impacts women and communities of color foreclosed on early in the crisis before the SJC recognized the many lender illegalities in foreclosure.

What Does This Bill Do? It does nothing to clear title – it attempts to exclude the party most likely to sue.
The Senate version of the bill shortens the time to overturn an illegal foreclosure after filing a foreclosure deed and accompanying affidavit from the long standing, 20 year statute of limitations to 3 years for future auctions and to only one year for those previously foreclosed. The bill provides no notice to MA homeowners of this curtailing of long-standing, property rights. In passing the bill on July 23rd, 2014, House leadership changed the bill to limit the decrease from 20 years to 10 for both present and future foreclosed homeowners. This change will at least protect homeowners in the present crisis.
The bill offers an exemption only if the former homeowner sues or is sued, knows to ask and can convince a judge to give permission to file a copy of their complaint in the Registry of Deeds. Getting such an allowance can be hard since court rulings on foreclosed homeowners’ claims against lenders’ illegal procedures are still evolving.
While S1987 provides triple, monetary damages if the foreclosing lender is found to have lied on its affidavit, the home in which people raised their children, invested all their incomes and participated in their communities is forever gone. A home is not just a financial investment. S1987 misses that reality: denying our right to fight for and reclaim an illegally foreclosed home and limiting judgment to financial recompense which can never repay what is lost when a home is taken illegally.

Will S1987 protect innocent, new homeowners who purchase post-foreclosure?
The clear majority of new purchasers (58%) are big, cash-only investors – not new owner-occupants or small local investors. Only homeownership and long-term stable rental ensure healthy neighborhoods.
The recording of any legal challenge to title –lis pendens– exists specifically to protect future buyers.
However, only a judge can approve such a filing (G.L. Chapter 184 sect. 15). When legal rulings evolve so quickly, judges are learning like the rest of us. Prior to each recent major SJC ruling in foreclosed homeowners’ favor, most judges ruled against those same legal claims, declaring arguments “frivolous” when homeowners attempted to appeal. Judges have not been able to fully assess what will or will not be determined a “frivolous challenge” in the near future and thus merit recording in the Registry now. If a homeowner is permitted to record the initial claim, they are also laid open to counter-suits that their filing was frivolous.
S1987 does nothing to clear title. The now common problems of broken chains of title to mortgages and missing notes means there may be other parties besides former homeowners who have rights unaffected by S1987. The only sure protection for new or old homeowners will be swift adjudication of or another remedy to the now numerous valid challenges to post-foreclosure titles and broken chains of ownership of mortgages and notes.

Can the foreclosure deed affidavit be considered as “conclusive evidence” of a valid foreclosure?
The foreclosure affidavit filed at the Registry in a foreclosure is a purposefully abbreviated form created by the legislature to memorialize the bare bones of a foreclosure. As has been adjudicated by the Massachusetts Supreme Judicial Court in two decisions in the last two years:
“The statutory form was intended as an alternative to the more lengthy form prescribed by G.L. c. 244, §
15,… The purposes of a statutory form are…: to be recorded with the foreclosure deed and “secure the preservation of evidence that the conditions of the power of sale… have been complied with… Such an
affidavit is not conclusive proof of compliance with G.L. c. 244, § 14.”
The statutory affidavit covers none of the legal challenges that have been the critical breakthrough defenses against illegal foreclosures in the last few years: a mortgage having sub-prime characteristics, a broken chain of title to the mortgage, lacking an enforceable note, proper service on the homeowner of the notice of the auction, strict compliance with the right to cure period, etc. The affidavit S1987 attempts to elevated to a “conclusive evidentiary” status would require creation of a lengthier affidavit to cover the most salient issues. The abbreviated version used for decades cannot be elevated to proof of legal foreclosure. “Evidence” by its very nature must be the subject of scrutiny in court. “Conclusive evidence” without adjudication is a legal impossibility.

Can a curtailed time period to sue be fair when courts broaden the number of winnable offenses monthly?
Can the outcome of a lawsuit best predicted by the date it is brought be fair? If previously foreclosed homeowners had been limited to 1 year in 2008, none of the now common legally successful challenges to foreclosure could win in court then.

What new claims will become winnable in coming months?
S1987 will drown our Civil Court system in legal claims. As the state judiciary has grasped the many problems in the procedures of mortgaging and foreclosure of homes, they have moved to enforce our laws more and more completely. A significant percentage of the 65,000+ households that were foreclosed since 2007 now have valid and potentially winnable legal challenges to regain their title. The Massachusetts courts will be deluged as homeowners and their advocates rush to file suit on now viable claims within one year. A small percentage of such filings (1,300) will mean slightly fewer lawsuits in one year than were filed in the last six!

S1987 unjustly lacks any notification to former or present homeowners of vast cut in right to sue
S1987 provides a one year window for the over 65,000 foreclosed homeowners since 2007 to sue and get a copy of their complaint recorded at the local registry of deeds, rather than the traditional 20, a serious curtailment of traditional rights. The House bill, as amended, improves a still flawed bill by increasing the period to 10 years. Homeowners deserve notification that the state has changed the time period. S1987 includes no provision. Nor would S1987 notify future foreclosed homeowners of their Senate-proposed three year window to sue.
A homeowner will not know when their clock to sue starts. No Massachusetts law requires a deadline for recording a foreclosure deed and subject affidavit. S1987 does not fix this nor require notification to the supposed former homeowner of the filing. Currently deeds are recorded from 1 to 21 months after auction. No ‘foreclosed’ homeowner can be expected to check every week for the date a foreclosure deed is recorded.

Shouldn’t laws reverse the huge economic loss to the state rather than make that impossible?
Conservatively, the 65,000+ Massachusetts foreclosures represent a $20-$40 billion loss in wealth to the state’s households. The vast majority of those foreclosures were done by out of state lenders, who took almost all of those billion out of our state. It is well recognized that the loss of value in a home represents a concomitant loss of spending power representing additional billions of dollars of lost economic activity and spending in the Commonwealth. Studies also show concomitant unemployment and job losses, negative health impacts, much lower school performance by children, the tearing apart of the fabric of our communities, losses in property tax revenue to our municipalities, increase in crime and its concomitant costs. We should support our residents to get their homes back, receive justice they deserve, bring their pillaged wealth back and rebuild our economy.

Our Housing Market is Still Unstable: S1987 does not help
S1987 will not stabilize the housing market. MAAPL, the Mass Bankers Association, and Commissioner of Banks all stated publicly that they do not believe foreclosures are over. Spring 2014 foreclosures spiked again: March, April and May’s petitions to foreclose and June auctions more than doubled. Percentages over the prior year were still far higher than the height of the then believed to be devastating foreclosure crisis of the early 1990s.
While the initial cause of the foreclosures and damage to our housing market appeared to be sub-prime lending policies, evidence now shows that the damage was caused by the huge housing bubble. Now that property prices have dropped down closer to the normal historical curve, those hugely overpriced mortgages are still common place in our state. These continue to destabilize neighborhoods and our housing market as a whole. Surface solutions that allow some properties to be purchased more easily will not address the underlying problems or the continuing accumulation of damages from the foreclosures that have happened already.

S1987 Only Claims to Address a Small Part of the Widespread Ruined Titles in our Registries
In addition to the problems exposed in the Ibanez ruling of “broken chain of title to the mortgage,” numerous additional examples of other chain of title to mortgage problems exist, such as the recent Eaton decision’s on “holding the note” and a dozen others highlighted in seminal, SJC decisions in the last couple years alone. These problems compromise the marketability of title. Their property record contains the same legal violations. What are the homeowners to do who face these problems each and every month over the next 30 to 50 years when they or their heirs go to refinance or sell their home? S1987 is a response to the tip of the Housing Bubble/Housing Crash iceberg. It does not resolve title problems either for those who have been illegally foreclosed or the much larger percentage of homeowners who will face these problems in the decades going forward. Damage to titles can be located. The state should commit to finding them and providing a genuine repair.

maaplinfo@yahoo.com    www.MAAPL.info Legislative Contact: Grace Ross, 617-291-5591

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Goldman Sachs mortgage deal with federal agency FHFA could reach $1.25 billion

Goldman Sachs mortgage deal with federal agency FHFA could reach $1.25 billion

Reuters-

A deal to resolve a U.S. regulator’s claims against Goldman Sachs Group Inc over mortgage-backed securities sold to Fannie Mae and Freddie Mac leading up to the financial crisis could cost the bank between $800 million and $1.25 billion, according to a person familiar with the matter.

The person said Goldman Sachs is discussing a settlement with the Federal Housing Finance Agency (FHFA), which filed 18 lawsuits against Goldman and other banks in 2011 over about $200 billion in mortgage-backed securities that later went sour.

Goldman Sachs and the FHFA declined to comment on Saturday.

[REUTERS]

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CITI Group to Buy OneWest for $3.4 Billion

CITI Group to Buy OneWest for $3.4 Billion

NYT-

The CIT Group, a lender to small and midsize businesses run by John A. Thain, said on Tuesday that it had agreed to acquire the parent company of OneWest Bank for $3.4 billion in cash and stock.

The deal will bolster CIT’s lending abilities by more than doubling its deposit base. OneWest currently manages $15 billion in deposits, as well as $23 billion in assets, including commercial and home mortgages.

It will merge with CIT’s own bank, creating a commercial bank with $28 billion in deposits and $67 billion in assets — putting it above the $50 billion threshold for increased regulatory oversight of banks deemed systemically important.

[NEW YORK TIMES]

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Housing Ponzi Scheme Losses: American Homeowners Battling Wall Street

Housing Ponzi Scheme Losses: American Homeowners Battling Wall Street

Relief for Homeowners?

Will the BlackRock/PIMCO suit help homeowners? Not directly. But it will get some big guns on the scene, with the ability to do all sorts of discovery, and the staff to deal with the results.

Fraud is grounds for rescission, restitution and punitive damages. The homeowners may not have been parties to the pooling and servicing agreements governing the investor trusts, but if the whole business model is proven to be fraudulent, they could still make a case for damages.


Global Research-

For years, homeowners have been battling Wall Street in an attempt to recover some portion of their massive losses from the housing Ponzi scheme. But progress has been slow, as they have been outgunned and out-spent by the banking titans.

In June, however, the banks may have met their match, as some equally powerful titans strode onto the stage. Investors led by BlackRock, the world’s largest asset manager, and PIMCO, the world’s largest bond-fund manager, have sued some of the world’s largest banks for breach of fiduciary duty as trustees of their investment funds. The investors are seeking damages for losses surpassing $250 billion. That is the equivalent of one million homeowners with $250,000 in damages suing at one time.

The defendants are the so-called trust banks that oversee payments and enforce terms on more than $2 trillion in residential mortgage securities. They include units of Deutsche Bank AG, U.S. Bank, Wells Fargo, Citigroup, HSBC Holdings PLC, and Bank of New York Mellon Corp. Six nearly identical complaints charge the trust banks with breach of their duty to force lenders and sponsors of the mortgage-backed securities to repurchase defective loans.

[GLOBAL RESEARCH]

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BofA pays AIG $650 million to settle mortgage disputes

BofA pays AIG $650 million to settle mortgage disputes

REUTERS-

Bank of America (BAC.N) agreed to pay American International Group Inc (AIG.N) $650 million to settle long-running legal disputes over defective mortgage-backed securities sold in the run-up to the financial crisis.

The deal, which the parties announced early Wednesday, ends securities fraud litigation that the insurer brought against Bank of America. It also removes the biggest obstacle to the bank’s $8.5 billion settlement with investors in mortgage securities issued by Countrywide Financial, the subprime lender Bank of America acquired in 2008.

AIG will file notices dismissing its litigation accusing the bank of causing billions of dollars in losses by selling it shoddy mortgage securities. The litigation is pending in New York and California.

[REUTERS]

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Bank of America offering $13 billion to resolve probe

Bank of America offering $13 billion to resolve probe

Just close these cartels down now…ALL. OF. THEM.

 

CNBC-

Bank of America has offered $13 billion to settle a probe into mortgage securities sold by the bank, the Wall Street Journal reported, citing people familiar with the matter.

The bank met U.S. Justice Department representatives on Tuesday, but no progress was made toward a final deal, the paper reported.

Bank of America had previously offered about $12 billion to settle the matter, including a portion to help struggling homeowners, while the Justice Department had suggested a $17 billion settlement, sources told Reuters earlier this month.

[CNBC]

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Why Do Banksters Get Help but Not Homeowners?

Why Do Banksters Get Help but Not Homeowners?

Truth-OUT

It’s time to start helping the people, and stop helping Wall Street.

According to an agreement announced earlier today, big bank Citigroup will pay $7 billion to settle a Department of Justice investigation into that bank’s involvement with risky subprime mortgages.

The agreement stems from Citigroup’s role in the trading of subprime mortgage securities, which helped to cause the 2007 financial collapse and Great Recession.

Of the $7 billion total settlement, $4 billion will be in the form of a civil monetary payment to the Department of Justice, $500 million will go to state attorney’s general and the Federal Deposit Insurance Corporation, and an additional $2.5 billion will go towards “consumer relief.”

But make no mistake about it. This agreement is another win for the big banks.

[TRUTH-OUT]

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Justice Department, Federal and State Partners Secure Record $7 Billion Global Settlement with Citigroup for Misleading Investors About Securities Containing Toxic Mortgages

Justice Department, Federal and State Partners Secure Record $7 Billion Global Settlement with Citigroup for Misleading Investors About Securities Containing Toxic Mortgages

Department of Justice

Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, July 14, 2014
Justice Department, Federal and State Partners Secure Record $7 Billion Global Settlement with Citigroup for Misleading Investors About Securities Containing Toxic Mortgages
Citigroup to Pay the Largest Penalty of Its Kind – $4 Billion

The Justice Department, along with federal and state partners, today announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) prior to Jan. 1, 2009.  The resolution includes a $4 billion civil penalty – the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public – including the investing public – about the mortgage loans it securitized in RMBS.  The resolution also requires Citigroup to provide relief to underwater homeowners, distressed borrowers and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas.  The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.

 

This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered $20 billion to date for American consumers and investors.

 

“This historic penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi,” said Attorney General Eric Holder.  “The bank’s activities contributed mightily to the financial crisis that devastated our economy in 2008.  Taken together, we believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business.  Citi is not the first financial institution to be held accountable by this Justice Department, and it will certainly not be the last.”

 

The settlement includes an agreed upon statement of facts that describes how Citigroup made representations to RMBS investors about the quality of the mortgage loans it securitized and sold to investors.  Contrary to those representations, Citigroup securitized and sold RMBS with underlying mortgage loans that it knew had material defects.  As the statement of facts explains, on a number of occasions, Citigroup employees learned that significant percentages of the mortgage loans reviewed in due diligence had material defects.  In one instance, a Citigroup trader stated in an internal email that he “went through the Diligence Reports and think[s] [they] should start praying . . . [he] would not be surprised if half of these loans went down. . . It’s amazing that some of these loans were closed at all.”  Citigroup nevertheless securitized the loan pools containing defective loans and sold the resulting RMBS to investors for billions of dollars.  This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.

“Today, we hold Citi accountable for its contributing role in creating the financial crisis, not only by demanding the largest civil penalty in history, but also by requiring innovative consumer relief that will help rectify the harm caused by Citi’s conduct,” said Associate Attorney General Tony West.  “In addition to the principal reductions and loan modifications we’ve built into previous resolutions, this consumer relief menu includes new measures such as $200 million in typically hard-to-obtain financing that will facilitate the construction of affordable rental housing, bringing relief to families pushed into the rental market in the wake of the financial crisis.”

 

Of the $7 billion resolution, $4.5 billion will be paid to settle federal and state civil claims by various entities related to RMBS: Citigroup will pay $4 billion as a civil penalty to settle the Justice Department claims under FIRREA, $208.25 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $102.7 million to settle claims by the state of California, $92 million to settle claims by the state of New York, $44 million to settle claims by the state of Illinois, $45.7  million to settle claims by the Commonwealth of Massachusetts, and $7.35 to settle claims by the state of Delaware.

 

Citigroup will pay out the remaining $2.5 billion in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup.  That relief will take various forms, including loan modification for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to homebuyers, donations to organizations assisting communities in redevelopment and affordable rental housing for low-income families in high-cost areas.  An independent monitor will be appointed to determine whether Citigroup is satisfying its obligations.  If Citigroup fails to live up to its agreement by the end of 2018,  it must pay liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.

 

The U.S. Attorney’s Offices for the Eastern District of New York and the District of Colorado conducted investigations into Citigroup’s practices related to the sale and issuance of RMBS between 2006 and 2007.

 

“The strength of our financial markets depends on the truth of the representations that banks provide to investors and the public every day,” said U.S. Attorney John Walsh for the District of Colorado, Co-Chair of the RMBS Working Group.  “Today’s $7 billion settlement is a major step toward restoring public confidence in those markets.  Due to the tireless work by the Department of Justice, Citigroup is being forced to take responsibility for its home mortgage securitization misconduct in the years leading up to the financial crisis.  As important a step as this settlement is, however, the work of the RMBS working group is far from done, we will continue to pursue our investigations and cases vigorously because many other banks have not yet taken responsibility for their misconduct in packaging and selling RMBS securities.”

 

“After nearly 50 subpoenas to Citigroup, Trustees, Servicers, Due Diligence providers and their employees, and after collecting nearly 25 million documents relating to every residential mortgage backed security issued or underwritten by Citigroup in 2006 and 2007, our teams found that the misconduct in Citigroup’s deals devastated the nation and the world’s economies, touching everyone,” said U.S. Attorney of the Eastern District of New York Loretta Lynch.  “The investors in Citigroup RMBS included federally-insured financial institutions, as well as a host of states, cities, public and union pension and benefit funds, universities, religious charities, and hospitals, among others.  These are our neighbors in Colorado, New York and around the country, hard-working people who saved and put away for retirement, only to see their savings decimated.”

 

This settlement resolves civil claims against Citigroup arising out of certain securities packaged, securitized, structured, marketed, and sold by Citigroup.  The agreement does not release individuals from civil charges, nor does it release Citigroup or any individuals from potential criminal prosecution. In addition, as part of the settlement, Citigroup has pledged to fully cooperate in investigations related to the conduct covered by the agreement.

 

Michael Stephens, Acting Inspector General for the Federal Housing Finance Agency said, “Citigroup securitized billions of dollars of defective mortgages, after which investors suffered enormous losses by purchasing RMBS from Citi not knowing about those defects. Today’s settlement is another significant step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit in the lead up to the financial crisis, and is a necessary step toward reviving a sound RMBS market that is crucial to the housing industry and the American economy.  We are proud to have worked with the Department of Justice, the U.S. Attorneys’ Offices in the Eastern District of New York and the District of Colorado. They have been great partners and we look forward to our continued work together.”

 

The underlying investigation was led by Assistant U.S. Attorneys Richard K. Hayes, Kevin Traskos, Lila Bateman, John Vagelatos, J. Chris Larson and Edward K. Newman, with the support of agents from the Office of the Inspector General for the Federal Housing Finance Agency, in conjunction with the President’s Financial Fraud Enforcement Task Force’s RMBS Working Group.

 

The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis.  The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state Attorneys General offices around the country.

 

The RMBS Working Group is led by its Director Geoffrey Graber and its five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.

 

Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov .

14-733
Attorney General

Source: DOJ

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Citigroup Is Said to Be Close to Settling Inquiry Into Mortgage Securities

Citigroup Is Said to Be Close to Settling Inquiry Into Mortgage Securities

NYT-

Citigroup and the Justice Department are nearing a deal that could cost the bank roughly $7 billion to settle a civil investigation into the sale of mortgage investments, people briefed on the matter said on Tuesday.

The settlement, which is expected to be announced within the next week, caps months of negotiations that grew so tense in June that the Justice Department threatened to sue if the bank did not agree to the government’s proposed penalty. The deal, which would be made up of a monetary penalty and relief for homeowners, would remove a huge legal obstacle that has been weighing on the bank’s share price and casting a shadow over its future.

At one point in the talks, the government demanded that Citigroup pay $10 billion. While the settlement will fall short of that demand, the bank will still pay more than once expected.

[NEW YORK TIMES]

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Non-Bank Servicers Under the Microscope – Who Will Service Loans?; HELOC Problems Ahead?

Non-Bank Servicers Under the Microscope – Who Will Service Loans?; HELOC Problems Ahead?

Oh…my…I’ve read that there is about $111 BILLION in HELOC’s coming due on or about 2017!


Mortgage Daily News-

In July 1776, the estimated number of people living in the newly independent nation was 2.5 million. (Nowadays, this is approximately the number of people on the freeway in Atlanta or Seattle during rush hour.) The nation’s estimated population on this July Fourth is over 318 million. So we should all invest our money in anything that appreciates with population growth, right?

California has gobs of people, and as California goes, so goes the nation, right? The California State Assembly approved SB 1459. The bill is now enrolled and sent to the governor for signature or veto. The California Mortgage Bankers Association “has vigorously supported the legislation, which will allow use of the Uniform State Test (UST) for California MLOs. The bill would also modify hourly education requirements, requiring MLOs to get 2 hours of state-focused pre-license education (as part of the 20 hour requirement) and 1 hour of state-focused continuing education (as part of the 8 hour requirement).”

(This reminded me of a note I received a while back from an LO at a large bank. “Are any of the guys emailing you about bank registration versus LO licensing actually producers? I was licensed in more states than most, and it means zilch. Realtors don’t care; clients don’t care. Everyone wants the same thing which is to hit contract dates without excuses. Like everyone else I crammed before the test, bought some practice exams, did some forgettable education, passed the tests and the next day I quickly forgot it all then went back to originating. The same goes for Continuing ED; I click through a bunch of screens and forgot everything a few hours later. At my bank they flood us with training – do the vast majority of LOs remember the minutiae? Big producers will produce regardless of if they are licensed or registered and their referral sources don’t care.

[MORTGAGE DAILY NEWS]

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FEDERAL RESERVE BOARD | The Federal Reserve Board on Monday published a report regarding the Independent Foreclosure Review (IFR) and the Payment Agreement that replaced the IFR

FEDERAL RESERVE BOARD | The Federal Reserve Board on Monday published a report regarding the Independent Foreclosure Review (IFR) and the Payment Agreement that replaced the IFR

Release Date: July 7, 2014

For release at 11:00 a.m. ET

The Federal Reserve Board on Monday published a report regarding the Independent Foreclosure Review (IFR) and the Payment Agreement that replaced the IFR. The Payment Agreement required large mortgage servicers to provide approximately $10 billion in cash payments to eligible borrowers and other foreclosure prevention assistance. After the Payment Agreement has been fully implemented, the Federal Reserve expects to publish data on the final status of the cash payments and the foreclosure prevention assistance.

Between April 2011 and April 2012, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve issued enforcement actions against 16 mortgage loan servicers for deficient practices in mortgage loan servicing and foreclosure processing. In addition to correcting their servicing practices, the actions required the servicers to hire independent consultants to conduct file reviews to determine if borrowers suffered financial injury and were eligible for financial remediation.

To settle their obligations under the IFR, 15 mortgage servicers entered into the Payment Agreement with the OCC and the Federal Reserve to provide $3.9 billion in direct cash payments to borrowers and approximately $6.1 billion in foreclosure prevention assistance. The Payment Agreement provides the greatest benefit to consumers in a timelier manner than would have occurred under the IFR and ensures that servicers cannot ask or require borrowers to waive any legal claims against their servicer as a condition of payment.

The report released today provides information on the process for the review of the foreclosure files during the IFR and file review results, including servicer error rates during the IFR, up to the time the IFR was replaced. The report also contains updated information on direct borrower payments and other assistance from the Payment Agreement and discusses the Federal Reserve’s ongoing supervision of corrective actions the mortgage servicers are required to implement. The report focuses primarily on servicers regulated by the Federal Reserve.

Also on Monday, the Board released action plans for Goldman Sachs and Morgan Stanley to correct deficiencies in the firms’ third-party vendor management procedures. The action plans were required by the enforcement actions issued in 2011 and 2012 by the Federal Reserve for deficiencies in residential mortgage loan servicing and foreclosure processing.

Independent Foreclosure Review report, July 2014 (PDF)

Goldman Sachs Residential Mortgage Servicing Vendor Management Policy Addendum (PDF)

Morgan Stanley Policy for the Management of Third Party Residential Mortgage Servicing Providers (PDF)

For media inquiries, call 202-452-2955

.

SOURCE: http://www.federalreserve.gov/newsevents/press/bcreg/20140707a.htm

.

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