Billion | FORECLOSURE FRAUD | by DinSFLA - Part 2

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The Year in White-Collar Crime

The Year in White-Collar Crime

Simply Unbelievable.


NYT-

White-collar crime cases can take years to develop, so today’s headlines often reflect what happened well in the past. And as we approach the end of 2014, there is a sense, to steal a line from Yogi Berra, that it’s like déjà vu all over again.

We will, of course, see continued fallout from the practices that helped fuel the financial crisis. This past year, the Justice Department reached multibillion-dollar settlements with Bank of America and JPMorgan Chase for selling shoddy mortgage-backed securities before the financial crisis hit in 2008. Most of the loans packaged for investors were made by companies acquired by the banks as the real estate market spiraled downward in 2008, so they paid for the sins of others.

The settlements with big banks hardly close out cases from the financial crisis as names from the past keep popping to the surface. DealBook reported that the Justice Department was considering a civil fraud case against Angelo R. Mozilo, former chief executive of Countrywide Financial, which was at the center of the subprime mortgage market. Prosecutors in Los Angeles closed a criminal investigation a few months after Mr. Mozilo reached a settlement with the Securities and Exchange Commission in 2010 over securities fraud charges. But he may be back in the news again if a new round of civil fraud charges is filed.

The S.E.C. sued the former chief executives of mortgage giants Fannie Mae and Freddie Mac, along with other officers of the companies, for securities fraud in 2011 for not adequately disclosing the companies’ exposure to the subprime mortgages that led to a government bailout. Those cases are just winding up the discovery phase, so it is unlikely there will be a trial in 2015 as the two sides continue to fight over whether the case should proceed.

[NEW YORK TIMES]

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New York’s Top Cop Scores as Credit Suisse Faces $10 Billion Mortgage Fraud Suit

New York’s Top Cop Scores as Credit Suisse Faces $10 Billion Mortgage Fraud Suit

BusinessWeek-

Credit Suisse Group AG (CSGN) was ordered to face a $10 billion lawsuit by New York’s attorney general accusing the Swiss bank of fraud in the sales of mortgage-backed securities before the 2008 financial crisis.

A New York State Supreme Court justice rejected the bank’s request to dismiss the case, a move that gives leverage to Attorney General Eric Schneiderman to demand internal bank documents and force a settlement. New York demonstrated the bank may have engaged in misconduct, Justice Marcy Friedman said in a Dec. 24 decision, allowing the suit to head toward trial.

In addition to forcing Zurich-based Credit Suisse to defend itself or settle, the ruling may strengthen Schneiderman’s hand in punishing other banks for bad behavior tied to the recession.

[BUSINESS WEEK]

image: BusinessWeek

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NYDFS ANNOUNCES OCWEN CHAIRMAN TO RESIGN FROM FIRM AND RELATED COMPANIES; OCWEN TO PROVIDE DIRECT HOMEOWNER RELIEF AND UNDERTAKE SIGNIFICANT OPERATIONAL REFORMS

NYDFS ANNOUNCES OCWEN CHAIRMAN TO RESIGN FROM FIRM AND RELATED COMPANIES; OCWEN TO PROVIDE DIRECT HOMEOWNER RELIEF AND UNDERTAKE SIGNIFICANT OPERATIONAL REFORMS

December 22, 2014

Contact: Matt Anderson, 212-709-1691

NYDFS ANNOUNCES OCWEN CHAIRMAN TO RESIGN FROM FIRM AND RELATED COMPANIES; OCWEN TO PROVIDE DIRECT HOMEOWNER RELIEF AND UNDERTAKE SIGNIFICANT OPERATIONAL REFORMS

$150 Million in ‘Hard-dollar’ Assistance to New Yorkers

NYDFS Will Have Independent Monitor at Ocwen for up to Additional Three Years

Benjamin M. Lawsky, Superintendent of Financial Services, announced today that — to address serious conflict of interest issues uncovered during a New York State Department of Financial Services (NYDFS) investigation — William C. Erbey will step down from his position as Executive Chairman of Ocwen Financial Corporation (OCN) and from his positions as Chairman of the Board of Directors of each of four related companies: Altisource Portfolio Solutions S.A. (ASPS), Altisource Residential Corporation (RESI), Altisource Asset Management Corporation (AAMC), and Home Loan Servicing Solutions, Ltd. (HLSS). As of these resignations, Mr. Erbey will have no directorial, management, oversight, consulting, or any other role at Ocwen or any related party, or at any of Ocwen’s or the related parties’ affiliates or subsidiaries.

Additionally, Ocwen — the fourth-largest mortgage servicer in the country and largest subprime mortgage servicer in the United States — will undertake significant operational reforms to address serious servicing misconduct and conflict of interest issues at the company; have an NYDFS-selected, independent monitor on site for up to an additional three years; and provide “hard-dollar” assistance to New Yorkers totaling $150 million.

Superintendent Lawsky said: “Today’s agreement will deliver significant assistance to Ocwen homeowners in New York and provide a new path for the company to clean up its operations. We will continue to closely monitor Ocwen to ensure that it lives up to its obligations under this agreement, and treats struggling homeowners with the respect and dignity they deserve.”

That $150 million in hard-dollar assistance Ocwen will pay includes:

  • $50 million in direct, hard-dollar restitution payments to former and current Ocwen homeowners in New York. Ocwen homeowners in New York who lost their homes to foreclosure will receive a payment of $10,000 each. After the payments are made to foreclosed homeowners, the balance of the funds will be distributed equally to current and former Ocwen homeowners (up to $1,000 each) who have had foreclosure proceedings initiated against them but have not yet lost their homes to foreclosure, and those current Ocwen homeowners will also have the opportunity to be reviewed for a mortgage modification or other alternative to foreclosure.
  • $100 million for housing, foreclosure relief, and community redevelopment programs supporting New York’s housing recovery.

Ocwen may not use so-called “soft-dollar” mortgage modifications of loans it does not own to satisfy any of this $150 million penalty. As a servicer, Ocwen is already under a legal obligation to make such modifications if they are in the best interest of homeowners and investors. As such, soft dollar settlements do not represent either a punitive penalty to Ocwen for its misconduct or provide significant additional relief to consumers. Moreover, Ocwen shall not seek or accept, directly or indirectly, reimbursement or indemnification with regard to any or all of the amounts payable under today’s agreement; nor will it claim a U.S. tax deduction or tax credit for those payments.

Ocwen will continue to not be permitted to acquire additional mortgage servicing rights (MSRs). Ocwen may not begin to acquire additional MSRs until and unless it receives prior approval from NYDFS, and meets benchmarks developed by the independent monitor concerning the adequacy of Ocwen’s onboarding process for newly acquired MSRs and its ability to adequately service both those newly acquired MSRs and its existing loan portfolio.

NYDFS’ Investigation of Ocwen’s Misconduct

Ocwen is currently the fourth largest mortgage loan servicer and the largest servicer of subprime loans in the United States, servicing an unpaid principal balance (“UPB”) of approximately $430 billion.

Ocwen has grown more than ten-fold in the last several years. Beginning in 2009, Ocwen significantly expanded its servicing operations through the acquisition of several major servicers of home loans, as well as the acquisition of mortgage servicing rights (MSRs) for hundreds of billions of dollars in UPB.

In 2010 and 2011, NYDFS participated in a multistate examination of Ocwen, as well as entities ultimately acquired by Ocwen. The examination of Ocwen identified, among other things, deficiencies in Ocwen’s servicing platform and loss mitigation infrastructure, including (a) robo-signing, (b) inaccurate affidavits and failure to properly validate document execution processes, (c) missing documentation, (d) wrongful foreclosure, (e) failure to properly maintain books and records, and (f) initiation of foreclosure actions without proper legal standing.

Accordingly, Ocwen and NYDFS entered into an Agreement on Mortgage Servicing Practices on September 1, 2011. In June 2012, the Department conducted a surprise examination of Ocwen to assess its compliance with the 2011 Agreement, and uncovered significant violations. Consequently, on December 5, 2012, Ocwen entered into a Consent Order with NYDFS, which required Ocwen to retain an independent compliance monitor for two years.

During the course of the Monitor’s review, it identified numerous and significant additional violations of the 2011 Agreement, as well as New York State laws and regulations. For example, a limited review by the Monitor of 478 New York loans that Ocwen had foreclosed upon revealed 1,358 violations of Ocwen’s legal obligations, or about three violations per foreclosed loan. These violations included:

  • failing to confirm that it had the right to foreclose before initiating foreclosure proceedings;
  • failing to ensure that its statements to the court in foreclosure proceedings were correct;
  • pursuing foreclosure even while modification applications were pending (“dual tracking”);
  • failing to maintain records confirming that it is not pursuing foreclosure of servicemembers on active duty; and failing to assign a designated customer care representative.

The Department and the Monitor also identified, among other issues, (a) inadequate and ineffective information technology systems and personnel, and (b) widespread conflicts of interest with related parties.

In the course of its review, the Monitor determined that Ocwen’s information technology systems are a patchwork of legacy systems and systems inherited from acquired companies, many of which are incompatible. A frequent occurrence is that a fix to one system creates unintended consequences in other systems. As a result, Ocwen regularly gives borrowers incorrect or outdated information, sends borrowers backdated letters, unreliably tracks data for investors, and maintains inaccurate records.

Ocwen’s core servicing functions rely on its inadequate systems.  Specifically, Ocwen uses comment codes entered either manually or automatically to service its portfolio; each code initiates a process, such as sending a delinquency letter to a borrower, or referring a loan to foreclosure counsel.  With Ocwen’s rapid growth and acquisitions of other servicers, the number of Ocwen’s comment codes has ballooned to more than 8,400 such codes.  Often, due to insufficient integration following acquisitions of other servicers, there are duplicate codes that perform the same function.

Despite these issues, Ocwen continues to rely on those systems to service its portfolio of distressed loans. Ocwen’s reliance on technology has led it to employ fewer trained personnel than its competitors. For example, Ocwen’s Chief Financial Officer recently acknowledged, in reference to its offshore customer care personnel, that Ocwen is simply “training people to read the scripts and the dialogue engines with feeling.”  Ocwen’s policy is to require customer support staff to follow the scripts closely, and Ocwen penalizes and has terminated customer support staff who fail to follow the scripts that appear on their computer screens. In some cases, this policy has frustrated struggling borrowers who have complex issues that exceed the bounds of a script and have issues speaking with representatives at Ocwen capable of addressing their concerns.  Moreover, Ocwen’s customer care representatives in many cases provide conflicting responses to a borrower’s question.  Representatives have also failed in many cases to record in Ocwen’s servicing system the nature of the concerns that a borrower has expressed, leading to inaccurate records of the issues raised by the borrower.

The Department’s review of Ocwen’s mortgage servicing practices also uncovered a number of conflicts of interest between Ocwen and four other public companies (the aforementioned “related companies”), all of which are chaired by Mr. Erbey, who is also the largest individual shareholder of each and the Executive Chairman of Ocwen.

Despite Mr. Erbey’s holdings in these companies, Mr. Erbey has not in fact recused himself from approvals of several transactions with the related parties.  Mr. Erbey, who owns approximately 15 percent of Ocwen’s stock, and nearly double that percentage of the stock of Altisource Portfolio, has participated in the approval of a number of transactions between the two companies or from which Altisource received some benefit, including the renewal of Ocwen’s forced placed insurance program in early 2014.

Ocwen’s close business relationship with related companies is particularly evident in its relationship with Altisource Portfolio, which has dozens of subsidiaries that perform fee-based services for Ocwen.  In one example, Altisource Portfolio subsidiary Hubzu, an online auction site, hosts nearly all Ocwen auctions.  In certain circumstances, Hubzu has charged more for its services to Ocwen than to other customers — charges which are then passed on to borrowers and investors.  Moreover, Ocwen engages Altisource Portfolio subsidiary REALHome Services and Solutions, Inc. as its default real estate agency for short sales and investor-owned properties, even though this agency principally employs out-of-state agents who do not perform the onsite work that local agents perform, at the same cost to borrowers and investors.

Conflicts of interest are also evident at other levels of the Ocwen organization.  For example, during its review, the Monitor discovered that ?Ocwen’s Chief Risk Officer concurrently served as the Chief Risk Officer of Altisource Portfolio. The Chief Risk Officer reported directly to Mr. Erbey in both capacities.  This individual seemed not to appreciate the potential conflicts of interest posed by this dual role, which was of particular concern given his role as Chief Risk Officer.

Homeowner Relief

In addition to the direct payments to Ocwen homeowners in New York, the company will also provide the following relief:

  • Ocwen will provide upon request by a New York borrower that borrower’s complete loan file, which includes all information from all systems, including comment codes, at no cost to the borrower, regardless of whether such borrower’s loan is still serviced by Ocwen.
  • Ocwen will provide every New York borrower who is denied a modification, short sale, or deed-in-lieu of foreclosure, a detailed explanation of the reasons for denial.
  • For all New York borrowers who have been reported negatively by Ocwen to credit agencies since January 1, 2010, Ocwen will provide upon request at no cost a copy of such borrower’s credit report (including credit scores), regardless of whether such borrower’s loan is still serviced by Ocwen.
  • Nothing in today’s agreement shall excuse Ocwen from paying additional required restitution to any borrowers harmed by its improper or illegal conduct, including the backdating of letters to borrowers.

Additional Board Members, Monitor, and Significant Operational Reforms

Under today’s agreement, to help address conflict of interest issues, Ocwen will expand its Board of Directors by two independent board members in consultation with the Monitor. These additional directors will not own equity in any related party company. Moreover, Ocwen’s Board will contain no more than two executive directors at any time.

The Monitor will also review the adequacy and effectiveness of Ocwen’s operations, and assess Ocwen’s progress in complying with recommended corrective measures.  Such an assessment will include but is not limited to the following areas:

  • Information technology systems and personnel, including with respect to record keeping and borrower communications;
  • Number of personnel and the training and expertise of its personnel in all servicing operations;
  • Onboarding process for newly acquired mortgage servicing rights, including Ocwen’s ability to onboard newly acquired MSRs without interruption to servicing newly acquired loans or its existing loan portfolio;
  • Controls in identifying and correcting errors made by Ocwen’s personnel or systems;
  • Risk management functions;
  • Contracts or proposed contracts with third parties, including but not limited to related parties;
  • Fees charged by Ocwen to borrowers or mortgage investors; and
  • The Ocwen borrower experience.

The Monitor will review and assess Ocwen’s current committees of the Board of Directors.  The Ocwen Board will consult with the Monitor concerning, among other things, the structure, composition, and reporting lines of such committees, and whether certain committees should be either disbanded or created. The Board will consult with the Monitor to determine which decisions should be committed to the specific oversight of the Board’s independent directors, or a committee comprised of such independent directors, including, but not limited to:

  • Approval of transactions with related parties;
  • Approval of transactions to acquire mortgage servicing rights, sub-servicing rights, or otherwise to increase the number of loans serviced by Ocwen;
  • Approval of new relationships with third-party vendors;
  • Determinations as to whether Ocwen’s servicing, compliance, and information technology functions are adequately staffed;
  • Determinations as to whether Ocwen’s servicing, compliance, and information technology personnel are adequately trained;
  • Determinations as to whether Ocwen’s information technology infrastructure and ongoing investment in information technology systems are adequate;
  • Determinations as to whether Ocwen is adequately addressing the issues identified by the Operations Monitor and the Compliance Monitor; and
  • Determinations as to whether Ocwen is treating borrowers fairly and is communicating with borrowers appropriately.

The Monitor will semi-annually review and approve Ocwen’s benchmark pricing and performance studies with respect to all fees or expenses charged to New York borrowers by any related party.

The Board will also consult with the Monitor to determine whether any additional members of senior management should be terminated or whether additional officers should be retained to achieve the goals of complying with today’s agreement — and all other applicable laws, regulations, and agreements — as well as creating a corporate culture of ethics, integrity, compliance, and responsiveness to borrowers.

To view a copy of today’s consent order between NYDFS and Ocwen, please visit, link.

###

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NATIONAL CREDIT UNION ADMINISTRATION BOARD vs U.S. BANK N A, and BANK OF AMERICA, N A |  NCUA Sues Trustees of 99 Mortgage-Backed Securities

NATIONAL CREDIT UNION ADMINISTRATION BOARD vs U.S. BANK N A, and BANK OF AMERICA, N A | NCUA Sues Trustees of 99 Mortgage-Backed Securities

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

NATIONAL CREDIT UNION
ADMINISTRATION BOARD,
as Liquidating Agent of U.S. Central Federal
Credit Union, Western Corporate Federal Credit
Union, Members United Corporate Federal
Credit Union, Southwest Corporate Federal
Credit Union, and Constitution Corporate
Federal Credit Union,

Plaintiffs,

v.

U.S. BANK NATIONAL ASSOCIATION, and
BANK OF AMERICA, NATIONAL
ASSOCIATION,
Defendants.

COMPLAINT

The National Credit Union Administration Board (“NCUA Board”), acting in its capacity as liquidating agent for each of U.S. Central Federal Credit Union (“U.S. Central”), Western Corporate Federal Credit Union (“WesCorp”), Members United Corporate Federal Credit Union (“Members United”), Southwest Corporate Federal Credit Union (“Southwest”), and Constitution Corporate Federal Credit Union (“Constitution”), (collectively, the “CCUs” and the NCUA Board as liquidating agent for each, the “Plaintiffs”), by and through their attorneys, for this action against U.S. Bank National Association (“U.S. Bank”) and Bank of America, National Association (“Bank of America,” and collectively with U.S. Bank, “Defendants”), alleges as follows:

I. NATURE OF THE ACTION
1. Plaintiffs bring this action against Defendants for violating the Trust Indenture Act of 1939 (the “TIA”), 15 U.S.C. § 77aaa et seq., and, regarding the New York trusts, for violating New York Real Property Law § 124 et seq. (the “Streit Act”) to recover the damages they have suffered because of Defendants’ violations of their statutory and contractual obligations.
2. This action arises out of Defendants’ roles as trustees for 99 trusts identified on Exhibit A that issued residential mortgage-backed securities (“RMBS”).1 Each trust consists of hundreds of individual residential mortgage loans that were pooled together and securitized for sale to investors. Investors purchased certificates issued by the RMBS trust that entitled the investors (or “certificateholders”) to fixed principal and interest payments from the income stream generated as borrowers made monthly payments on the mortgage loans in the trusts.
3. The CCUs purchased the certificates in the trusts identified on Exhibit A at an original face value of approximately $5.8 billion.
4. The certificates’ value was dependent on the quality and performance of the mortgage loans in the trusts and swift correction of any problems with the loans. But, because of the structure of the securitization, certificateholders do not have access to the mortgage loan files or the power to remedy or replace any defective loans. Instead, certificateholders must rely on the trustees to protect their interests.
5. Defendants, as the trustees for the trusts, had contractual and statutory duties to address and correct problems with the mortgage loans and to protect the trusts’ and the certificateholders’ interests. The trustee for each trust has three primary duties. First, the trustee must take possession and acknowledge receipt of the mortgage files, review the documents in the mortgage files, identify any mortgage files that lack a complete chain of title or that have missing documents, and then certify that the mortgage files are complete and accurate. If the trustee identifies defects in the mortgage files, it must notify the appropriate parties and take steps to enforce the responsible party’s obligation to cure, substitute, or repurchase any mortgage loans with defective mortgage files.
6. Second, if the trustee discovers a breach of the representations and warranties concerning the mortgage loans, including but not limited to representations concerning the characteristics of the mortgage borrowers, the collateral for the mortgage loans, and assurances that the mortgage loans were originated in accordance with applicable underwriting criteria, the trustee must notify the appropriate parties and take steps to enforce the responsible party’s obligation to cure, substitute, or repurchase the defective mortgage loans. If the trustee fails to exercise this duty, then the trusts and the certificateholders will suffer losses properly borne by the party responsible for the defective loans.
7. Third, the trustee must act to protect the interests of the trust and the certificateholders when it becomes aware of defaults concerning the trust. Thus, when the trustee discovers a default, or is notified by other parties, such as servicers, of defaults like breaches of representations and warranties with respect to the underlying mortgage loans, the trustee must act prudently to investigate those defaults, notify certificateholders of the defaults, and take appropriate action to address the defaults.
8. Here, Defendants even failed to perform the threshold duties of taking full possession of the original notes and mortgages and properly reviewing the mortgage loan files for irregularities. If they had fulfilled their obligations, a significant percentage of the mortgage loans in the trusts would have been repurchased or substituted.
9. Moreover, an overwhelming number of events alerted Defendants to the fact that the trusts suffered from numerous problems, yet they did nothing. First, the trusts suffered identifies defects in the mortgage files, it must notify the appropriate parties and take steps to enforce the responsible party’s obligation to cure, substitute, or repurchase any mortgage loans with defective mortgage files.
6. Second, if the trustee discovers a breach of the representations and warranties concerning the mortgage loans, including but not limited to representations concerning the characteristics of the mortgage borrowers, the collateral for the mortgage loans, and assurances that the mortgage loans were originated in accordance with applicable underwriting criteria, the trustee must notify the appropriate parties and take steps to enforce the responsible party’s obligation to cure, substitute, or repurchase the defective mortgage loans. If the trustee fails to exercise this duty, then the trusts and the certificateholders will suffer losses properly borne by the party responsible for the defective loans.
7. Third, the trustee must act to protect the interests of the trust and the certificateholders when it becomes aware of defaults concerning the trust. Thus, when the trustee discovers a default, or is notified by other parties, such as servicers, of defaults like breaches of representations and warranties with respect to the underlying mortgage loans, the trustee must act prudently to investigate those defaults, notify certificateholders of the defaults, and take appropriate action to address the defaults.
8. Here, Defendants even failed to perform the threshold duties of taking full possession of the original notes and mortgages and properly reviewing the mortgage loan files for irregularities. If they had fulfilled their obligations, a significant percentage of the mortgage loans in the trusts would have been repurchased or substituted.
9. Moreover, an overwhelming number of events alerted Defendants to the fact that the trusts suffered from numerous problems, yet they did nothing. First, the trusts suffered enormous losses due to the high number of mortgage defaults, delinquencies, and foreclosures caused by defective loan origination and underwriting. Second, highly publicized government investigations and enforcement actions, public and private litigation, and media reports highlighted the mortgage originators’ systematic abandonment and disregard of underwriting guidelines and the deal sponsors’ poor securitization standards in the years leading up to the financial crisis. As summarized below, these actions and reports detail the incredible volume of defective loans and notorious activities of the originators, sponsors, and other players in the RMBS industry. Yet Defendants failed to take steps to preserve their rights or hold the responsible parties accountable for the repurchase or substitution of defective mortgage loans in direct contravention of their obligations as trustees.
10. Finally, Defendants failed to address servicer and/or master servicer defaults and events of default. Defendants knew that the master servicers and servicers were ignoring their duty to notify other parties, including Defendants as trustees, upon the master servicers’ and servicers’ discovery of breaches of the mortgage loan representations and warranties. Despite Defendants’ knowledge of these ongoing defaults and events of default, Defendants failed to act prudently to protect the interests of the trusts and the certificateholders.
11. Defendants’ failures resulted in the trusts and certificateholders suffering losses rightfully borne by other parties. Had Defendants adequately performed their contractual and statutory obligations, breaching loans would have been removed from the loan pools underlying the certificates and returned to the responsible party. Defendants’ improper conduct directly caused losses to certificateholders like the Plaintiffs.
12. Even after ample evidence came to light that the trusts were riddled with defective loans, Defendants shut their eyes to such problems and failed to take the steps necessary to protect the trusts and certificateholders. Defendants failed to act in part because protecting the best interests of the trusts and the certificateholders would have conflicted with Defendants’ interests. As participants in many roles in the securitization process, Defendants were economically intertwined with the parties they were supposed to police.
13. Because of the widespread misconduct in the securitization process, Defendants had incentives to ignore other parties’ misconduct in order to avoid drawing attention to their own misconduct. Thus, Defendants failed and unreasonably refused to take action to protect the trusts and certificateholders against responsible party breaches.
14. Indeed, it is precisely this type of trustee complicity and inaction that led Congress to enact the TIA to “meet the problems and eliminate the practices” that plagued Depression-era trustee arrangements and provide investors with a remedy for trustees that utterly neglect their obligations. See, e.g., 15 U.S.C. § 77bbb(b) (explaining purposes of the TIA in light of problems identified in 15 U.S.C. § 77bbb(a)).
15. To that end, several sections of the TIA impose duties on trustees. First, TIA Section 315(a) provides that, prior to default (as that term is defined in the governing documents), the trustee is liable for any duties specifically set out in the governing documents. 15 U.S.C. § 77ooo(a)(1). Second, TIA Section 315(b) provides that the trustee must give holders of covered securities “notice of all defaults known to the trustee, within ninety days after the occurrence thereof.” 15 U.S.C. § 77ooo(b). Third, Section 315(c) requires a trustee to act prudently in the event of a default (as that term is defined in the governing documents). 15 U.S.C. § 77ooo(c). Finally, the TIA states that “[n]otwithstanding any other provision of the indenture to be qualified, the right of any holder of any indenture security to receive payment of the principal of and interest on such indenture security, on or after the respective due dates expressed in such indenture security . . . shall not be impaired or affected without the consent of such holder.” 15 U.S.C. § 77ppp(b).
16. In addition, Section 124 of the Streit Act imposes a duty upon the trustee to discharge its duties under the applicable indenture with due care to ensure the orderly administration of the trust and to protect the trust beneficiaries’ rights. N.Y. Real Prop. Law § 124. Like the TIA, following an event of default, the Streit Act provides that the trustee must exercise the same degree of skill and care in the performance of its duties as would a prudent person under the same circumstances. N.Y. Real Prop. Law § 126(1).
17. Finally, upon awareness of the various failures discussed in this complaint, the governing agreements require Defendants to exercise their rights and powers using the same degree of care and skill as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
18. Defendants’ failure to perform their duties under the TIA, the Streit Act, and the governing agreements has caused Plaintiffs to suffer enormous damages.

[...]

Down Load PDF of This Case

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U.S. Bank, Bank of America sued over mortgage securities

U.S. Bank, Bank of America sued over mortgage securities

Of course!


REUTERS-

The U.S. credit union regulator said on Wednesday it filed a lawsuit against U.S. Bank and Bank of America over mortgage securities sold in the years leading up to the financial crisis.

The National Credit Union Administration (NCUA) said the banks broke state and federal laws by failing their duties as trustees for 99 residential mortgage-backed securities trusts.

The banks sold $5.8 billion in securities to five corporate credit unions that later failed after the products lost value. The regulator accused U.S. Bank and Bank of America of knowing about defects in the mortgage loans but not providing required notices to the investors.

[REUTERS]

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Monitor: Banks Fail Three Tests, Issues Discovered at Ocwen Joseph Smith reports on NMS compliance, Ocwen consumer relief, and Chase RMBS Settlement

Monitor: Banks Fail Three Tests, Issues Discovered at Ocwen Joseph Smith reports on NMS compliance, Ocwen consumer relief, and Chase RMBS Settlement

For immediate release:
December 16, 2014

Contact:
Hannah Harrill
919-508-7821

Monitor: Banks Fail Three Tests, Issues Discovered at Ocwen Joseph Smith reports on NMS compliance, Ocwen consumer relief, and Chase RMBS Settlement

RALEIGH, N.C. – Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement (NMS), the Ocwen National Servicing Settlement, and JP Morgan Chase Residential Mortgage-Backed Securities Settlement (Chase RMBS Settlement), today released updates on six mortgage servicers’ compliance with the NMS servicing standards, Ocwen’s self-reported progress toward fulfilling its consumer relief requirement under the Ocwen National Servicing Settlement, and JP Morgan Chase’s progress toward fulfilling the consumer relief requirements of the Chase RMBS Settlement.

NMS Compliance
Smith’s Continued Oversight report is a summary of six compliance reports he filed with the United States District Court for the District of Columbia as part of his duties monitoring the NMS. This summary details the results of his tests to determine compliance by Bank of America, Chase, Citi, Green Tree, Ocwen and Wells Fargo with the NMS servicing rules from Jan. 1, 2014 to June 30, 2014.

This is the first report with results for Smith’s four additional metrics created to supplement the original 29 NMS metrics. “The new metrics addressed concerns related to issues involving the loan modification process, single points of contact and billing statement accuracy,” said Smith. “I found that all the servicers tested on these new metrics passed them.”

There were three fails of other metrics.

Ocwen Compliance
“In May, an Ocwen employee contacted me through the Monitoring Committee and identified serious deficiencies in Ocwen’s internal review group process,” said Smith. “The Monitoring Committee and I took the claims seriously, and I launched an investigation, during which my team and I reviewed thousands of documents and interviewed nine Ocwen executives and employees. As a result, I retained an independent auditing firm to review and retest the Ocwen internal review group (IRG)’s work. This work is ongoing, and I will report on Ocwen’s performance for the period covered in these reports when it is complete. I appreciate this whistle-blower’s integrity.

“I have since further strengthened my review process of all servicers’ IRGs. Among other enhancements, I added interviews with multiple employees at various levels, additional reviews at various steps in the testing process, and the establishment of an Ethics Hotline so that any concerned IRG employee can reach my team quickly and anonymously if he or she has any concerns.

“The Monitoring Committee has been active and constructive in the monitoring process since the beginning of the NMS and I consulted with it during the course of my investigation into Ocwen’s practices.” The Monitoring Committee is composed of representatives from 15 states, the U.S. Department of Housing and Urban Development and the U.S. Department of Justice.

Smith also engaged Ocwen about the New York State Superintendent of Financial Services’ concerns about incorrect dates on some of Ocwen’s correspondence with customers, as this letter dating issue impacts the NMS.

“Many NMS standards and metrics have timeline requirements, so it was important to me to investigate Ocwen’s work in this area,” said Smith. “Ocwen has agreed to five remedial actions to date, which I include in this report. I also charged the same independent firm with determining the scope of the issue, assessing the reliability of Ocwen’s systems, and retesting relevant metrics.

“Ocwen has cooperated throughout the IRG and letter dating investigations and the ongoing work.”

Ocwen Consumer Relief under the Ocwen National Servicing Settlement
Smith also released an update on Ocwen’s $2 billion in first lien principal reduction obligation. Ocwen self-reported that it has completed $1.5 billion to borrowers through September 30, 2014. This is the first update on Ocwen’s consumer relief progress, and the Monitor has not yet credited these numbers. The Ocwen consumer relief data can be found here.

Chase RMBS Consumer Relief
In addition, Smith released a report on Chase’s progress toward providing $4 billion in consumer relief as part of the Chase RMBS Settlement. Chase’s review group asserted to the Monitor that it provided almost $1.4 billion in credited relief in the third quarter of 2014 and more than $2.2 billion in credited relief to date. Chase reports that it has provided $13.8 billion dollars in gross modifications and lending to 111,924 borrowers as of September 30, 2014. The Monitor has credited more than $868 million and is reviewing the additional work Chase and its internal review group (HRG) asserted. He will report the results of his testing in his report to the public next quarter.

About the Office of Mortgage Settlement Oversight More information about the National Mortgage Settlement and the Ocwen National Servicing Settlement is available at www.nationalmortgagesettlement.com. Further information about Joseph Smith and the Office of Mortgage Settlement Oversight is available at www.mortgageoversight.com.

About the Chase RMBS Settlement
More information about the Chase RMBS Settlement is available at https://www.jasmithmonitoring.com/chase. Further information about Joseph A. Smith, Jr. is available a https://www.jasmithmonitoring.com.

REPORT:

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J.P. Morgan Says It’s More Than Half Done With Mortgage-Settlement Consumer Relief

J.P. Morgan Says It’s More Than Half Done With Mortgage-Settlement Consumer Relief

WSJ-

J.P. Morgan Chase JPM & Co. has told an independent monitor it has provided more than half of the $4 billon in consumer aid mandated under its 2013 mortgage-securities settlement with the Justice Department.

The bank calculates it should receive about $2.25 billion of credit for such actions as cutting mortgage debts for struggling homeowners and lending to low-income home buyers, according to a report released Tuesday by the independent monitor of the bank’s $13 billion settlement.

Joseph Smith, the former North Carolina bank regulator hired to make sure J.P. Morgan follows the consumer-relief terms of the settlement, still needs to validate J.P. Morgan’s calculations before the bank can get credit.

[WALL STREET JOURNAL]

image: Diane Bondare AP

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Billionaire investors at OneWest Bank rec’d $1 billion from FDIC. Expected to receive $1.4 billion more

Billionaire investors at OneWest Bank rec’d $1 billion from FDIC. Expected to receive $1.4 billion more

via: CalReInvest

Fact Sheet: OneWest Bank Expected to Receive Over $2.4 billion from the FDIC

CALIFORNIA
REINVESTMENT
COALITION

Background: When the Federal Deposit Insurance Corporation (FDIC) sold IndyMac in 2009 and La Jolla Bank in 2010, it agreed to share losses from bad loans with the billionaire investors who bought the two banks. Under the shared loss agreements, once a certain threshold of loans goes bad, the FDIC agrees to share in the costs of future losses. In July of 2014, OneWest Bank, which has the IndyMac and La Jolla shared loss agreements, announced plans to merge with CIT Group, creating a Systemically Important Financial Institution (SIFI). While executives from the two banks told community leaders they would answer any questions about the proposed merger, they later refused to answer questions about the shared loss agreements. The California Reinvestment Coalition (CRC), a non-profit coalition of over 300 member organizations, was forced to submit a Freedom of Information Act (FOIA) request to the FDIC to obtain the information.

Down Load PDF of This Case

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Dan Alter: The legal mastermind behind New York’s record bank fines

Dan Alter: The legal mastermind behind New York’s record bank fines

WOW! Good for him. I supplied him with a ton of info at one point and then it went silent.

I’m glad to hear he was behind this!


Reuters-

Billions of dollars have flowed to New York state coffers thanks to headline-grabbing settlements with global banks announced by Governor Andrew Cuomo and Benjamin Lawsky, New York’s first superintendent of financial services.

But little attention has been focused on Daniel Alter, the 49-year-old legal mastermind behind many of the deals.

Sources close to the settlements describe Alter, general counsel at New York’s Department of Financial Services (DFS), as instrumental to crafting strategies that leverage the three-year-old agency’s unique powers to extract large and sometimes painful penalties from major banks.

[REUTERS]

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New York Regulator Poses Formidable Threat To Mortgage Servicers

New York Regulator Poses Formidable Threat To Mortgage Servicers

Forbes-

Benjamin Lawsky, a relatively unknown New York State regulator, has put the fast-growing non-bank mortgage servicing industry’s business model in jeopardy. Look no further than Ocwen Financial for proof of a servicing segment that remains marred in uncertainty.

Ocwen is reeling following a dispute with Lawsky that killed a promising a $39 billion acquisition of Wells Fargo’s servicing rights. News of the cancelled deal in mid-November sent the company’s shares down as much as 67 percent from their 52-week high. The stock has recovered slightly, but is still off more than 50 percent from a December 2013 high of $58.07.

Now, investors are left wondering whether the servicer – likened to a shark – will be allowed to continue feeding on new mortgages.

[FORBES]

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Five Biggest U.S. Banks Control Nearly Half Industry’s $15 Trillion In Assets

Five Biggest U.S. Banks Control Nearly Half Industry’s $15 Trillion In Assets

That’s $15 Trillion in fraud! We know their business model is built by these means.


Forbes-

The wreckage of the financial crisis led to pages upon pages of financial reform aimed at ending the era of Too Big To Fail, but six years after the banking system blew up the five biggest firms control 44% of the $15.3 trillion in assets held by U.S. banks according to data compiled by SNL Financial. Those banks — JPMorgan Chase JPM +0.07%, Bank of America BAC +0.7%, Wells Fargo WFC +0.46%, Citigroup C +1.56% and US Bancorp USB +0.5% — collectively held $6.8 trillion in assets as of Sept. 30.

JPMorgan holds just over $2 trillion in assets, or 13.1% of the industry’s total, followed by BofA at $1.5 trillion (9.9%), Wells Fargo just under $1.5 trillion (9.7%) and Citi at $1.4 trillion (9%), before a substantial dropoff to US Bank at $387 billion (2.5%).

SNL’s analysis, which considered only commercial banks, notes the drastic increase in banking industry concentration over the past few decades. In 1990, the five biggest U.S. banks held less than 10% of industry assets, but that figure has steadily marched higher ever since, pausing only for the year from 1999 to 2000. Today, Wells Fargo, the third biggest bank, controls basically the same percentage of assets the entire top five did in 1990.

[FORBES]

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Bank of America foreclosure dismissal moves forward $70M jury trial against bank

Bank of America foreclosure dismissal moves forward $70M jury trial against bank

(PR NewsChannel) / December 2, 2014 / PALM BEACH, Fla.

TJ Fisher with Colonel Dudley Boudreaux Waddlesworth, Lady Scotus Cornelia LaRue and Madame Calliope de Bourbon
TJ Fisher with Colonel Dudley Boudreaux Waddlesworth, Lady Scotus Cornelia LaRue and Madame Calliope de Bourbon
.

Bank of America (NYSE:BAC) dropped their foreclosure case against author TJ Fisher at a recent bench trial after bank attorneys missed a court deadline and Motion-in-limine hearing and were barred from presenting documents or witnesses. Judge Catherine M. Brunson of the 15th Judicial Circuit of Florida signed the foreclosure dismissal order and also presides over Fisher’s long-running $70 million legal battle against the nation’s second-biggest bank as a defendant. The tangled cases play out in the same courtroom, each case jockeying for crucial court-calendar scheduling and rulings.

“The foreclosure dismissal is a miracle I’m grateful for,” Fisher says. “Bank of America intended to heave-ho me from my home before a jury hears my main case against the bank. They’re stopped, for now,” Fisher says.

Fisher met financial and personal ruin after ex-Baltimore Raven’s football player Michael McCrary sued her for $60 million and obtained a subsequent default judgment. The salacious scandal over convoluted Bank of America 2006 transactions between the bank and Fisher’s husband embroiled the author after the bank opened an unverified limited liability company account and took in deposit monies that permeated Fisher’s marital life.

The bank’s account opening triggered a seven-year nightmare and legal-quagmire odyssey through 14 civil courts for Fisher. Her life in shambles with debt and an impossible-to-pay $33.3 million judgment, Fisher fought back but could not get out from behind-the-eight-ball untenable situation she was thrust into. She sued Bank of America in 2011 for negligence and responsibility.

The former-NFLer dogged Fisher for years until his parallel suit against Bank of America finally netted him an eight-figure bank settlement, after Fisher sued the bank. Once receiving settlement for the same account opening he sued Fisher over, McCrary refused to extinguish his duplicate claim and legally valid judgment against her. McCrary and his lawyers remain intent on extracting the proverbial pound after pound of flesh and millions of dollars more from Fisher for McCrary’s soured business relationship with her husband that pocketed the ex-gridiron an eight million plus profit. McCrary wants more.

The powerful, influential and well-financed bank that consistently ranks as one of American’s most hated banks with a high rate of customer dissatisfaction has dodged and delayed a jury trial for nearly four years in Fisher’s headliner case against the bank while simultaneously pursuing foreclosing her from her home. Fisher’s attorney Patrick W. Maraist, Esq. filed a 63-page Motion for Continuance in the foreclosure case to stay the foreclosure on the “unclean hands” doctrine and the bank’s ongoing “bad faith” tactics to stonewall discovery and stall justice. Maraist did not have to obtain a court injunction to block foreclosure, this time around. A string of judicial rulings favorable to Fisher rendered his motion unessential.

TJ Fisher and Miss Marion Colbert of Tremé, New OrleansTJ Fisher and Miss Marion Colbert of Tremé, New Orleans
.

“Countless prayers have been said on my behalf and candles lit by people from all walks of life—many in far worse predicaments than me. That’s very humbling. The collective strength and power of my well-wishers enables me to keep going, and I give thanks for my blessings. The bank bets on grounding me down to dust. They’re wrong. They miscalculated. I’m not going away. I live another day to fight Goliath.”

The improper financial dealings and bank accounts set up by the bank’s Palm Beach Vice-President and Branch Manager Peter Kafouros and Fisher’s husband are the heart and underbelly of Fisher’s Bank of America lawsuit. She seeks compensation for her actual damages and loss suffered and funds to extinguish outstanding financial and judgment debt. This does not include pain and suffering for what she has endured and irreparable harm caused.

Fisher’s case against the financial behemoth was originally scheduled to begin August 18 with a five-day trial set before a six-panel jury. The bank lost its 11th hour Motion for Summary Judgment and then requested and received a continuance days before the trial was to commence. The postponement allowed the bank’s competing ancillary foreclosure action to bump ahead on the court docket. This rescheduling subjected Fisher to the possibility of no roof over her head and being forced into a bankruptcy filing before America’s “Banking Royalty” of Wall Street ever faced a jury for its alleged financial wrongdoings that unraveled Fisher’s life.

The foreclosure reprieve means Fisher’s case against Bank of America remains in state court and jury-bound, for the moment. The revolving door of legal motions and court hearings continues. “It takes a toll,” Fisher says. “I’ve fought for years and years without resources and tens of millions of debt to get a jury trial.”

Atypical Palm Beacher Fisher fits no mold. Fisher previously divided her time between Palm Beach and New Orleans and before losing her historic Bourbon Street house during seven years of litigation. She credits the people and places of New Orleans for lessons learned in resiliency. Fisher says that her faith, determination, spunk and spirit cannot be obliterated.

Fisher looks to her longtime 86-year-old friend and role model Miss Marion Colbert of Tremé for inspiration. Miss Marion has known extreme post-Hurricane Katrina tragedy and loss and hardship that few can comprehend. “You can’t argue with God,” Miss Marion recently warned Fisher during a visit to her home, “he makes the decisions.” Miss Marion remains a beloved, elegant and stalwart matriarch of the 200-year-old Faubourg Tremé community. She presides over the heart of Creolé culture. Everyone listens to Miss Marion.

For now, resilient litigant Fisher has her reprieve. Her major lawsuit moves closer to jury trial where fair and dispassionate jury members will hear the size and scope of Fisher’s damages and deliver judgment on the behavior of Too Big To Fail banking titan Bank of America.

TJ Fisher at her 2008 Faulkner Society book signing and “Juleps in June” benefit with Miss Marion Colbert and Ron Boykins, Upper Garden District, New OrleansTJ Fisher at her 2008 Faulkner Society book signing and “Juleps in June” benefit with Miss Marion Colbert and Ron Boykins, Upper Garden District, New Orleans
.

Fisher says she is a victim of banking negligence and owes no penitence to McCrary, merely the default judgment dollars a Baltimore court awarded him against her for the bank account Bank of America wrongly opened and then settled with him over. Her lawsuit begs the question many ask of the bank’s activities and breaches of federal regulations: “Did Bank of America really do that?” Jurors will have an opportunity to see and hear witness testimony, examine documents, learn of missing documents and review Banker Kafouros’ video-taped deposition about the trillion-dollar bank’s business practices. Impartial “finders of fact” will look at evidence and pass verdict on one of the country’s Big Four banks.

Fisher says the bank’s pleadings and court arguments seek to tar and feather her, akin to attacking and blaming the victim, perhaps in a hope that jurors will not understand her case’s dramatic twists and turns and nuclear fallout. “Bank lawyers constantly call me ‘THE Fishers’ like I’m a two-headed beast and point at me backwards during court hearing proceedings,” Fisher says. That does not deter her from pursuing justice. Fisher concludes juries are not easily fooled. She believes jurors will clearly grasp how Bank of America actions and inaction sucked her into an inescapable purgatory train wreck.

Fisher offers regular poignant glances into her ongoing struggles, updating those who follow her case and story.

Fisher’s “David” attorney Maraist will argue a pre-trial 3-1/2 hour hearing before Judge Brunson as to why the “Goliath” bank and its Liebler, Gonzalez & Portuondo law firm should be severely penalized and defaulted for the bank’s numerous discovery failures and apparent arrogant disregard for court rulings. The bank continues to ignore and defy Brunson’s September 12 order to make available to Fisher 100,000 pages of undisclosed relevant documents the bank previously hid and refused to produce. The default hearing against the bank was previously set for November 12 but cancelled and reset for January.

The Liebler law firm not only represents Bank of America in Fisher’s case against the bank but is also the legal counsel on a Bank of America mortgage pass-through foreclosure action against Fisher’s home.

Recent Bank of America scandals include a blockbuster settlement of $16.65 billion this summer with the Justice Department over the bank’s selling of mortgage securities, and a settlement this month over the alleged manipulation of foreign-exchange rates.

Others say Fisher inspires them with her stamina and faith, her smile and strength, her grace and elegance and a large dose of zany humor while fighting a giant under impossible circumstances.

Fisher tries to live by Miss Marion’s motto “a smile goes a long way” and her “shake-shake-shake the devil off your back” philosophy. Miss Marion, a lifelong St. Augustine Catholic Church of New Orleans parishioner, was Brennan’s restaurant beloved powder room attendant for 35 years before the French Quarter landmark abruptly closed under new ownership last year.

“Miss Marion is a wise woman. I made promises to her about my lawsuit and St. Augustine that I intend to keep,” Fisher says.

Ticktin Law Group attorneys Michael Vater and Tim Quinones represented Fisher in the dismissed foreclosure action. They also represent Fisher in the ongoing second Bank of America mortgage foreclosure case.

“This is a movie of the week,” Fisher says, “an epic Book-of-Job size fall from grace, but also resiliency and redemption and laying down the missing pieces in an unfinished jigsaw puzzle that will complete the picture to allow a jury to discipline the bank.”

Fisher says she can never return to the person she was at the onset of McCrary suing her. “Change is a natural part of life. Nobody’s life or circumstances remain forever flat, no matter

TJ Fisherat the Margaret Statue, Lower Garden District, New OrleansTJ Fisherat the Margaret Statue, Lower Garden District, New Orleans
.

what, it’s a part of the human condition and survival.” She has learned to roll with the punches but anticipates a reversal of fortunes in the near future. “If you have a home, you can handle what life throws you. My own experiences have solidified the importance of supporting causes that aid the homeless and help keep families in their home.”

She adds, “Tragic life occurrences and ‘everyday life issues’ like illness, injury, job loss, accidents, natural disasters, unpaid bills, no income and foreclosure render people homeless. As many as 3.5 million Americans are homeless each year, more than one million of these are children, and on any given night, more than 300,000 children are homeless.”

Fisher, who has worked tirelessly to overcome insurmountable to odds get this far, believes her litigation will soon end with victory. She hopes to share that victory with others. She expects a return to financial strength and self-sufficiency and looks forward to getting back to writing books, philanthropy and making movies instead of fighting lawsuits.

Fisher also looks to the one of America’s greatest heroines, philanthropists and lifelong champion of the destitute “Mother of Orphans” Margaret Haughery (1813–1882) for strength and inspiration. She has pledged to aid in the restoration of the Irish “Angel of the Delta” and “Bread Woman of New Orleans” 1800s marble monument and to continue her legacy.

For more information on TJ Fisher, please visit: TJ Fisher.com and TJ Fisher.net.

DOWNLOAD LEGAL DOCUMENTS: Order #1 and Order #2

MEDIA CONTACT:
Anne ?O’Brien
PR firm: Bourbon Media
Email: bourbonmedia@gmail.com
Phone: (504) 408-1535

Direct link:  http://www.prnewschannel.com/2014/12/02/bank-of-america-foreclosure-dismissal-moves-forward-70m-jury-trial-against-bank/SOURCE:  TJ Fisher

This press release is distributed by PR NewsChannel. Your News. Everywhere.

- See more at: http://www.prnewschannel.com/2014/12/02/bank-of-america-foreclosure-dismissal-moves-forward-70m-jury-trial-against-bank/#sthash.PXLr0HdC.dpuf

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California Reinvestment Coalition: Join Us in Telling Bank Regulators: We Need a Cop on the Beat!

California Reinvestment Coalition: Join Us in Telling Bank Regulators: We Need a Cop on the Beat!

Last week, Senator Elizabeth Warren asked the president of the New York Federal Reserve Bank  if he thought of himself as a cop on the street when it comes to regulating banks.  He responded that no, he thought of himself more as a “fire marshal.”

Really?   After dozens of Wall Street scandals, one of the bank’s main regulators doesn’t think of himself as a cop on the beat?  

Help the California Reinvestment Coalition send a message to the New York Federal Reserve that we do need a “Cop on the Beat?”

One of the ways the New York Fed could immediately demonstrate that Main Street is more important than Wall Street is by holding public hearings about a proposed Too Big To Fail Bank merger in California.

This merger, if approved, would combine two troubled banks (OneWest- the new version of IndyMac, which was the 3rd largest bank failure in our country, costing the FDIC $10 billion and counting) and CIT Group (borrowed $2.3 billion from the US government that it will never have to pay back because it declared bankruptcy) to create another Too Big To Fail bank.  The California Reinvestment Coalition, along with over 50 other organizations in California and organizations and consumers throughout the US, is opposing this merger and asking the regulators to hold hearings.

Regulators need to hear from consumers. Can you sign our petition, telling bank regulators that we DO need a “Cop on the Beat”?

If you personally have any experience with IndyMac Bank, OneWest Bank, Financial Freedom (reverse mortgage servicer subsidiary of OneWest), or if  your OneWest morgage was transferred to Ocwen, another troubled firm, please tell the regulators about your experiences, and please join CRC in asking for hearings on this merger.

click image below to sign the petition.

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Loan Servicer Busted for Backdating, But Foreclosure Victims Say Shenanigans Haven’t Stopped

Loan Servicer Busted for Backdating, But Foreclosure Victims Say Shenanigans Haven’t Stopped

There is no stopping them. It’s going to take a President with some guts to put an end to fraud and corruption inside the government itself.


In These Times-

On October 24, Ron Faris, CEO of Ocwen Financial, made an unusual move for the head of a $2 billion-a-year corporation: He apologized. Specifically, he sent out a mea culpa-filled open letter addressing the 2.7 million homeowners whose mortgages are serviced by Ocwen, apologizing for a glitch that backdated time-sensitive letters. “Letters were dated when the decision was made to create the letter versus when the letter was actually created,” Faris confessed. The missive came on the heels of well-publicized allegations by New York’s Dept of Financial Services (DFS) accusing the company of doing just that, and suggesting that the delayed loan modification letters may have resulted in foreclosures. At first, Faris claimed that only 283 New York homeowners had been impacted. However, he quickly retreated from that number after DFS said the number could be higher, way higher—perhaps in the “hundreds of thousands”—and not confined to New York.

The Faris letter was clearly damage control, an attempt to staunch the bleeding and send a message to the investment community following a Moody’s credit downgrade and a precipitous drop in Ocwen stock, which dropped to $19.04 on October 23 and fell again to $18.55 on October 27, the lowest price since June 2012.

This isn’t the first time that Ocwen has had to circle the wagons in response to jabs and uppercuts by New York DFS Superintendent Ben Lawsky, who’s developed a reputation as somewhat of a regulatory Popeye, taking on the servicing industry with a zeal matched only by Sen. Elizabeth Warren and a few other left-minded Congress members. Lawsky’s prime targets have been non-bank servicers like Ocwen—companies that saw a cash cow in the growing desire of mega-banks like Wells Fargo and Bank of America to shed their so-called “toxic” sub-prime mortgage portfolios in the wake of litigation and regulation from 2010’s “Foreclosuregate.” As Lawsky noted in an address earlier this year to the New York Bankers Association, these non-bank mortgage servicers have bought up a significant share of U.S. mortgages:

[In 2011, all of the ten largest mortgage servicers were traditional banks. Today, four of the top ten are non-banks. And those four non-bank firms alone service more than a trillion dollars of loans—10 percent of the residential mortgage market, and climbing.

[IN THESE TIMES]

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Bank of America, Citigroup Said to Sell Soured Home Loans

Bank of America, Citigroup Said to Sell Soured Home Loans

Idiots to even think about this purchase!


Bloomberg-

Bank of America Corp. and Citigroup Inc. (C) are selling multiple pools of soured U.S. mortgages to meet demand from investment firms that are pushing prices higher, according to three people with knowledge of the matter.

Bank of America put about $1 billion of troubled debt on the market last week, consisting of nonperforming loans and some where payments have resumed, said the people, who asked not to be identified because the offerings are private. The Charlotte, North Carolina-based lender also is marketing about $1 billion of soured home loans with Wells Fargo & Co., according to one of the people. Citigroup is separately selling about $1 billion of nonperforming and re-performing mortgages, the people said.

Dan Frahm, a spokesman for Bank of America, and Mark Costiglio, a spokesman for Citigroup in New York, declined to comment on the loan sales. Elise Wilkinson, a spokeswoman for San Francisco-based Wells Fargo, also declined to comment.

[BLOOMBERG]

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[VIDEO] Matt Taibbi and Bank Whistleblower on How JPMorgan Chase Helped Wreck the Economy, Avoid Prosecution

[VIDEO] Matt Taibbi and Bank Whistleblower on How JPMorgan Chase Helped Wreck the Economy, Avoid Prosecution

DEMOCRACY NOW-

A year ago this month the U.S. Department of Justice announced that the banking giant JPMorgan Chase would avoid criminal charges by agreeing to pay $13 billion to settle claims that it had routinely overstated the quality of mortgages it was selling to investors. But how did the bank avoid prosecution for committing fraud that helped cause the 2008 financial crisis? Today we speak to JPMorgan Chase whistleblower Alayne Fleischmann in her first televised interview discussing how she witnessed “massive criminal securities fraud” in the bank’s mortgage operations. She is profiled in Matt Taibbi’s new Rolling Stone investigation, “The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking.”

[DEMOCRACY NOW]

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Matt Taibbi: The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare

Matt Taibbi: The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare

Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking

Rolling Stone-

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn’t take it anymore.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.’”

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She’s had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.

[ROLLING STONE]

 

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.






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US foreclosure rates are falling — unless you’re billionaire Bill Erbey… FORECLOSES on homeowners through is “captured” subsidiary Altisource

US foreclosure rates are falling — unless you’re billionaire Bill Erbey… FORECLOSES on homeowners through is “captured” subsidiary Altisource

He’s done and I hope this opens up more investigations! Was he part of the backdated letters to homeowners?

 

NY POST-

The real estate tycoon foreclosed on 1,022 houses last quarter through his company Altisource Residential — a record, according to a quarterly presentation released Tuesday.

The skyrocketing foreclosure rate seemingly contradicts statements Erbey made last week that one of his companies’ goals is “to keep people in their homes whenever possible.”

Erbey — chair of at least five companies, including Altisource Residential and mortgage servicer Ocwen Financial — stands to gain handsomely when one of his companies forecloses on more homes, as all his companies primarily do business with one another, industry experts say.

[NEW YORK POST]

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Ohio Public Employees Retirement System v FREDDIE MAC | Freddie Mac Off Hook in Subprime Exposure Suit

Ohio Public Employees Retirement System v FREDDIE MAC | Freddie Mac Off Hook in Subprime Exposure Suit

Courthouse News-

The Ohio Public Employees Retirement System failed to prove Freddie Mac concealed a $2 billion loss on risky mortgages from investors before a 2007 financial report set its stocks reeling, a federal judge ruled.

The retirement system, alternately known as OPERS, sued the Federal Home Loan Mortgage Corporation in January 2008, alleging that the government-sponsored mortgage broker lied about the number of “subprime” loans it purchased in 2006 and 2007.

Following the release of a financial statement revealing a $2 billion loss on November 20, 2007, Freddie Mac’s stock dropped 29 percent in one day, resulting in shareholder losses of over $6.6 billion.

In its complaint OPERS claimed “the drop in [stock] price ‘confirms empirically that the market was previously unaware of the full extent of Freddie Mac’s exposure to, and risk from, non-traditional mortgages,” while Freddie Mac blamed the price drop on the financial crisis.

U.S. District Court Judge Benita Y. Pearson cited several of Freddie Mac’s annual reports in her opinion, pointing out how their disclosures run counter the plaintiff’s argument.

[COURTHOUSE NEWS]

Down Load PDF of This Case

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Former GMAC head named CEO for new Fannie, Freddie subsidiary

Former GMAC head named CEO for new Fannie, Freddie subsidiary

Where is GMAC today? My point EXACTLY!


Washington Business Journal-

David Applegate, the former president of GMAC Mortgage and chairman of GMAC Bank, has been named the first chief executive of Common Securitization Solutions LLC, the new Fannie Mae and Freddie Mac subsidiary that will operate in the secondary mortgage market.

Applegate, whose GMAC career spanned 17 years, was most recently president and CEO of Homeward Residential Inc., a Dallas-based mortgage lender with $4.5 billion in assets.

Fannie and Freddie each appointed two executives to the CSS board of managers as well: David Lowman, Freddie Mac executive vice present of single-family business; Jerry Weiss, Freddie Mac executive vice president and chief administration office; Terry Edwards, Fannie Mae vice president and chief operating offer; and Rick Sorkin, Fannie Mae senior vice president, single-family pricing strategy.

[WASHINGTON BUSINESS JOURNAL]

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Ocwen Announces a Recorded $100 million charge for potential settlement with New York regulator over back-dated letters to homeowners

Ocwen Announces a Recorded $100 million charge for potential settlement with New York regulator over back-dated letters to homeowners

Didn’t this violate a previous settlement? This isn’t the first time either involving letters: Ocwen to Pay $3.7 Million to Massachusetts Over Failure to Provide Notices to Homeowners, Unlawful Foreclosures

How do you track where this money is going? Shouldn’t it be used to repay the homeowners?

Way too much fraud happening and the homeowners always end up screwed by both the government and the bankstas.

Ocwen-

Ocwen Financial Announces Operating Results for Third Quarter 2014

 

  • Recorded $100 million charge for potential settlement with New York regulator

ATLANTA, Oct. 30, 2014 (GLOBE NEWSWIRE) — Ocwen Financial Corporation, (NYSE:OCN), a leading financial services holding company, today reported a Net loss of $(75.3) million, or $(0.58) per share, for the third quarter of 2014 compared to Net income of $60.6 million, or $0.39 per share, for the third quarter of 2013. Ocwen generated revenue of $513.7 million, down 3% compared to the third quarter of 2013. Income from operations was $58.7 million for the third quarter of 2014.

Net income for the nine months ended September 30, 2014 was $52.2 million, or $0.36 per share, as compared to $175.1 million, or $1.17 per share, for the same period in 2013. Revenue for the first nine months of 2014 increased 9% from the first nine months of 2013 to a total of $1.6 billion.

Pre-tax loss on a GAAP basis for the third quarter of 2014 was $(72.3) million, a 194% decrease as compared to the second quarter of 2014. During the third quarter of 2014, Ocwen incurred a total of $137 million in normalized expenses. Ocwen’s normalized pre-tax earnings were $64.8 million, a 41% decrease from the second quarter of 2014. Normalized pretax earnings were impacted by $120.0 million of reserves for various regulatory and legal matters, including a $100.0 million accrual for a potential settlement with the New York Department of Financial Services, $9.0 million for Fair Value changes and $8.1 million of integration, technology-related and severance costs. We have not reached any agreement with the New York Department of Financial Services and cannot predict whether or when we may reach such a resolution. Any future resolution of these regulatory and legal matters may be materially different from what has been accrued.

“I want to emphasize that Ocwen takes great efforts to keep borrowers in their homes and to avoid foreclosures,” commented Bill Erbey, Ocwen’s Executive Chairman. “Ocwen recently reached a significant milestone by making its 500,000th loan modification, including 290,000 HAMP modifications. Ocwen is the leader in foreclosure prevention with 44% more HAMP modifications than any other servicer. We work very hard to keep borrowers in their homes and that is why we take the concerns raised by the New York Department of Financial Services so seriously. We have numerous compensating controls in place which we believe should have prevented borrower harm. Nonetheless, Ocwen is proactively creating a process whereby any borrower, who believes they received a misdated letter, and were harmed as a result, will have the opportunity to receive a complete file review to resolve any issues caused by the misdating.”

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[OCWEN]

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.






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Screwing Our Vets Is an American Tradition

Screwing Our Vets Is an American Tradition

HuffPO-

We have a long and proud history in this country of neglecting our veterans. It’s a tradition that goes back as far as the Civil War, if not longer. In the last few decades though, that we’ve allowed the behavior to not only continue, but to be ratcheted up a few notches from simple neglect to abuse and predatory behavior. It’s as if we’re saying, “Hell, they’ve been shot at, lived in the dirt, been taken prisoner, and tortured. They can take it.”

In February of this year, an effort to move forward with a $21 billion bill to enhance health care, education and job benefits for veterans, was blocked by the GOP; we’ve cut food stamps, on which at least 900,000 military families rely; blocked a bill that was specifically supposed to create jobs for veterans; cut funding for the VA; sent them into battle with inadequate gear; and barely care for their health issues.

This week alone, there are glaring examples of how we treat our veterans. Steve Dibert over at MFI-Miami has a blog post up about how Deutsche Banks and Ocwen using forged notary stamps, duel tracking and other actions to take the home of a veteran dying of cancer. And then there’s angry lunatic and radio host Michael Savage who went on a disgusting rant, calling vets with PTSD “weak.” “narcissistic” and “losers.”

Nice way to treat the folks that have risked their lives for you to have the right and freedom to talk about and treat them that way, isn’t it?

[HUFFPO]

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.






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