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Ryan & Maniskas, LLP Announces Investigation of Ocwen Financial Corp.

Ryan & Maniskas, LLP Announces Investigation of Ocwen Financial Corp.

WAYNE, Pa., May 19, 2014 /PRNewswire/ – Ryan & Maniskas, LLP has commenced an investigation into potential securities law violations by certain officers of Ocwen Financial Corp. (“Ocwen” or the “Company”) (NYSE: OCN).

Ocwen shareholders should contact Richard A. Maniskas, Esquire at 877-316-3218 or at rmaniskas@rmclasslaw.com to learn more about this investigation or visit: www.rmclasslaw.com/cases/ocn.

Ocwen, through its subsidiaries, is engaged in the servicing and origination of mortgage loans in the United States and internationally. The Company’s Servicing segment provides residential and commercial mortgage loan servicing, special servicing, and asset management services to owners of mortgage loans and foreclosed real estate.

Our investigation concerns Ocwen’s mortgage servicing process practices.  In December 2013, the Consumer Financial Protection Bureau (“CFPB”) and authorities in 49 states sued Ocwen, accusing it of years of “significant and systemic misconduct that occurred at every stage of the mortgage servicing process.”  Ocwen agreed to settle these charges and is required to provide $2 billion in loan modification relief to homeowners and $125 million to consumers who were improperly foreclosed upon.  The CFPB action makes clear that, more than three years after agreeing to adhere to mortgage servicing industry standards, the Company has made no significant improvements to its practices.  Ocwen’s shares have fallen nearly 30% this year.

If you own Ocwen shares and would like to learn more about these claims or if you wish to discuss these matters and have any questions concerning this announcement or your rights, contact Richard A. Maniskas, Esquire toll-free: (877) 316-3218 or visit: www.rmclasslaw.com/cases/ocn.  You may also email Mr. Maniskas at rmaniskas@rmclasslaw.com.  For more information about class action cases in general, please visit our website: www.rmclasslaw.com.

Ryan & Maniskas, LLP is a national shareholder litigation firm.  Ryan & Maniskas, LLP is devoted to protecting the interests of individual and institutional investors in shareholder actions in state and federal courts nationwide.

CONTACT:

Ryan & Maniskas, LLP

Richard A. Maniskas, Esquire

995 Old Eagle School Rd., Suite 311

Wayne, PA 19087

877-316-3218

rmaniskas@rmclasslaw.com

www.rmclasslaw.com/cases/ocn

Logo – http://photos.prnewswire.com/prnh/20121112/MM11729LOGO

SOURCE Ryan & Maniskas, LLP

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TAX EVASION | Credit Suisse will pay a $100 million penalty for unsafe and unsound practices and failure to comply with the federal banking laws governing its activities in the United States

TAX EVASION | Credit Suisse will pay a $100 million penalty for unsafe and unsound practices and failure to comply with the federal banking laws governing its activities in the United States

Press Release

Release Date: May 19, 2014

For immediate release

The Federal Reserve Board on Monday announced that Credit Suisse will pay a $100 million penalty for unsafe and unsound practices and failure to comply with the federal banking laws governing its activities in the United States. The Federal Reserve also issued a cease and desist order requiring Credit Suisse promptly to address deficiencies in its oversight, management, and controls governing compliance with U.S. laws.

This action is taken in conjunction with actions by the Department of Justice and the New York State Department of Financial Services for violations of the federal income tax laws and various New York State laws. The penalties issued by the agencies total $2.6 billion.

The Board’s cease and desist order and assessment of civil money penalty against Credit Suisse, a foreign bank that is subject to the International Banking Act and other U.S. federal banking laws, are based on the institution’s inadequate risk-management and compliance program, and its failure to conduct and accurately report to the Federal Reserve the operations of its New York representative office in compliance with U.S. banking laws. These failures contributed to the violation of the International Banking Act, the U.S. income tax laws, and the U.S. securities laws. Credit Suisse’s New York representative office was closed in 2009. Credit Suisse continues to operate a branch office in New York, which is covered by the enhanced policies and procedures required by the order.

The order requires Credit Suisse to complete its ongoing efforts to implement programs and policies to ensure that Credit Suisse conducts its operations in the United States and worldwide in full compliance with U.S. banking laws and the contemporaneous orders of the Department of Justice and the New York State Department of Financial Services.

As part of the order, Credit Suisse has agreed to terminate its relationship with, and not re-employ or otherwise engage, nine individuals who were involved in the actions that resulted in the violation of U.S. laws. Apart from the actions with regard to the institution, the Federal Reserve is investigating whether other specific individuals that may have been involved in the actions that resulted in violations of U.S. banking laws during the relevant period should separately be subject to actions by the Federal Reserve. These actions could include fines and orders prohibiting specific individuals from participating in the business of banking, including working for any institution subject to the jurisdiction of U.S. federal banking supervisors. Credit Suisse has agreed to cooperate in these investigations, but is not the subject of these investigations.

For media inquiries, call 202-452-2955.

 

Attachment (32 KB PDF)

Board VotesStatement by the Department of Justice

Statement by the New York State Department of Financial Services

Last update: May 19, 2014

 

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Blankfein reportedly says GS would consider cutting off business with a bank that pleads guilty to criminal charges

Blankfein reportedly says GS would consider cutting off business with a bank that pleads guilty to criminal charges

Bloomberg-

Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd C. Blankfein said he understands the concern over the potential impact to the financial markets of any global bank pleading guilty to a crime.

“There’s concern being shown, and I don’t magnify it, but I don’t minimize it either,” Blankfein said today in an interview after the New York-based firm’s annual shareholder meeting in Irving, Texas. “You hope it’s not existential, and you hope there’s not a knock-on effect to that.”

Credit Suisse Group AG is close to reaching an agreement to plead guilty and pay about $2.5 billion to the U.S. Justice Department and regulators to resolve investigations into whether it helped Americans evade taxes, three people familiar with the matter have said. A guilty plea by Credit Suisse (CSGN)’s parent company would be the first by a major global bank in the U.S. in more than two decades.

[BLOOMBERG]

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ResCap Sues BofA, RBC Mortgage Over ‘Defective’ Loan Sales

ResCap Sues BofA, RBC Mortgage Over ‘Defective’ Loan Sales

The entire financial system is defective!


Bloomberg-

ResCap filed for bankruptcy protection in May 2012 after investors who bought mortgage-backed bonds claimed they were loaded with faulty loans. It was liquidated to resolve more than $100 billion in potential lawsuits.

In lawsuits filed yesterday in U.S. Bankruptcy Court in Manhattan, ResCap said it’s seeking to recover “billions of dollars in liabilities and losses” over the “defective” loans. It wants the banks held responsible for more than 24 lawsuits alleging ResCap securitized bad loans, as well as for hundreds of claims, including securities fraud and breach of warranty, that it faced in bankruptcy.

[BLOOMBERG]

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Three Banks Meet Standards of Mortgage Settlement

Three Banks Meet Standards of Mortgage Settlement

Wonder how they cured all the forged documents and the ownership of the notes?

 

NASDAQ-

Three of the largest U.S. mortgage servicers have rectified failures to comply with parts of a $25 billion landmark national mortgage settlement, the watchdog overseeing the process said Wednesday.

Bank of America Corp., J.P. Morgan Chase & Co. and Citigroup Inc. passed all tests reviewing their compliance with the National Mortgage Settlement during the third and fourth quarters of last year, said the monitor for the settlement, Joseph A. Smith.

In December, Mr. Smith had released a report saying those banks had each failed at least two of 29 metrics that measure standards over how to provide relief to homeowners under threat of foreclosure. In total, the three banks failed on seven metrics in the first half of 2013.

[NASDAQ]

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MBIA vs JPMORGAN SECURITIES, BEAR STEARNS | NY judge: JPMorgan/Bear Stearns committed MBS fraud; dismisses case anyway

MBIA vs JPMORGAN SECURITIES, BEAR STEARNS | NY judge: JPMorgan/Bear Stearns committed MBS fraud; dismisses case anyway

HW-

For the last two years, MBIA Insurance Corp. and J.P. Morgan Securities have been fighting in court. In September 2012, MBIA sued JPMorgan (and Bear Stearns, which was acquired by JP Morgan in 2008), alleging that Bear Stearns altered a third-party due diligence report so that MBIA would insure a $1.16 billion mortgage securitization.

The securitization in question, 2006-HE4 Securitization, originated from a pool of risky mortgages and MBIA alleged that Bear Stearns, as lead underwriter, manipulated the deal’s due diligence report to make the securitization look safer than it actually was.

And according to New York State Supreme Court Justice Alan Scheinkman, that’s exactly what Bear Stearns did. But Scheinkman dismissed the case anyway because MBIA could not prove that it used the fraudulent information in its decision to insure the securitization.

[HOUSING WIRE]

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Watchdog report: More problems for Ocwen customers

Watchdog report: More problems for Ocwen customers

WZZm13-

You may remember the Grand Rapids area couple we told you about having trouble with the new company now servicing their mortgage. Ocwen almost immediately raised their monthly payment but the company could not or would not tell them why.

While trying to clear up the confusion,the homeowners were hit with late fees and a negative credit report; it’s a story that’s happened all around the country. In fact late last year, Ocwen reached a settlement with 48 states including Michigan to provide over $2 billion to customers for certain alleged practices. They include contributing to premature and unauthorized foreclosures, violating homeowners rights, and the use of false and deceptive documents.

[WZZm13]

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BANK OF AMERICA INVESTIGATION INITIATED BY FORMER LOUISIANA ATTORNEY GENERAL: Kahn Swick & Foti, LLC Investigates Bank of America Corporation Following Disclosure of $4 Billion Accounting Error

BANK OF AMERICA INVESTIGATION INITIATED BY FORMER LOUISIANA ATTORNEY GENERAL: Kahn Swick & Foti, LLC Investigates Bank of America Corporation Following Disclosure of $4 Billion Accounting Error

NEW ORLEANS–(BUSINESS WIRE)–Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Bank of America Corporation (NYSE: BAC).

On April 28, 2014, Bank of America announced a $4 billion downward revision of the Company’s previously disclosed regulatory capital due to an accounting error related to the Company’s 2009 acquisition of Merrill Lynch & Co. The Company further announced that the Federal Reserve Board has required the Company to resubmit its data templates and requested capital actions and directed that the Company suspend its plan to buy back more shares and raise its dividend. The Federal Reserve Board stated that, “Bank of America must address the quantitative errors in its regulatory capital calculations as part of the resubmission and must undertake a review of its regulatory capital reporting to help ensure there are no further errors.”

KSF’s investigation is focusing on whether Bank of America and/or its officers and directors violated state or federal securities laws.

If you have information that would assist KSF in its investigation, or own a significant amount of Bank of America stock that was purchased recently and would like to discuss your legal rights, you may, without obligation or cost to you, e-mail or call KSF Managing Partner Lewis Kahn (lewis.kahn@ksfcounsel.com) or KSF Partner Melinda Nicholson (melinda.nicholson@ksfcounsel.com) toll free at 1-877-515-1850.

About Kahn Swick & Foti, LLC

KSF, whose partners include the Former Louisiana Attorney General Charles C. Foti, Jr., is a law firm focused on securities class action and shareholder derivative litigation with offices in New York and Louisiana. KSF’s lawyers have significant experience litigating complex securities class actions nationwide on behalf of both institutional and individual shareholders.

To learn more about KSF, you may visit www.ksfcounsel.com.

 

Contacts

Kahn Swick & Foti, LLC
Lewis Kahn, Managing Partner, 1-877-515-1850
lewis.kahn@ksfcounsel.com
or
Melinda Nicholson, Partner, 1-877-515-1850
melinda.nicholson@ksfcounsel.com

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Fannie Mae Would Need New Bailout in Downturn, FHFA Says

Fannie Mae Would Need New Bailout in Downturn, FHFA Says

Bloomberg-

Fannie Mae and Freddie Mac (FMCC) could require an additional bailout of as much as $190 billion in a severe economic downturn, according to the results of stress tests released by the regulator for the U.S.-owned companies.

The two mortgage-finance giants, which have already taken $187.5 billion in taxpayer aid since 2008, would need more funds to stay afloat if home prices plummeted in a severe downturn, the Federal Housing Finance Agency said in a report today. The stress tests, mandated by the Dodd-Frank Act, use the same assumptions that the Federal Reserve does in gauging the ability of the nation’s largest banks to withstand a recession.

The results reflect the terms of the companies’ bailout, which require them to send to the Treasury all of their quarterly profits above a minimum net worth threshold. That money, counted as a return on the U.S. investment, prevents them from rebuilding capital or paying down debt to taxpayers.

“These results of the severely adverse scenario are not surprising given the company’s limited capital,” Fannie Mae (FNMA) Senior Vice President Kelli Parsons said in a statement. “Under the terms of the senior preferred stock purchase agreement, Fannie Mae is not permitted to retain capital to withstand a sudden, unexpected economic shock of the magnitude required by the stress test.”

The companies would need $84 billion to $190 billion by the end of 2015 in the worst circumstances, depending on accounting assumptions, the tests showed.

[BLOOMBERG]

FHFA Announces Results of Fannie Mae and Freddie Mac Stress Tests

FOR IMMEDIATE RELEASE
4/30/2014

Washington, DC – The Federal Housing Finance Agency (FHFA) today released a report providing updated information on possible ranges of future financial results of Fannie Mae and Freddie Mac under specified scenarios.  The report, Projections of the Enterprises’ Financial Performance, reflects results of stress tests Fannie Mae and Freddie Mac are required to conduct, starting this year, under the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The stress tests are designed to determine whether Fannie Mae and Freddie Mac could absorb losses as a result of adverse economic conditions. 

The report also contains the results of annual financial results projections that FHFA has published since 2010 (the “FHFA scenarios”).  The FHFA scenarios reflect forward-looking financial projections across three possible house price paths and were developed in conjunction with Fannie Mae and Freddie Mac.  Next year, only the Dodd-Frank Act Stress Tests will be required.

Projections of the Enterprises’ Financial Performance

Additional links:

2014 Summary Instructions and Guidance
2014 Scenario Assumptions (PDF)
2014 Scenario Assumptions (spreadsheet)
2014 Global Market Shock Assumptions (spreadsheet)
2014 Reporting Templates – Enterprises (spreadsheet)

2014 Reporting Templates – Scenario Variables and Assumptions (spreadsheet)

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Office of the Comptroller of the Currency | FULL REPORT | Foreclosure – Related Consent Orders Status Report: Observations, Payments, and Foreclosure Prevention Assistance | NR-OCC-2014-65a

Office of the Comptroller of the Currency | FULL REPORT | Foreclosure – Related Consent Orders Status Report: Observations, Payments, and Foreclosure Prevention Assistance | NR-OCC-2014-65a


Foreclosure – Related Consent Orders Status Report: Observations, Payments, and Foreclosure Prevention Assistance

April 2014

Office of the Comptroller of the Currency Washington, D.C.

?Executive Summary
In 2013, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board (FRB) amended consent orders against 15 mortgage servicers for deficient practices in mortgage servicing and foreclosure processing. In total, these Independent Foreclosure Review (IFR) Payment Agreements require the servicers to provide $3.9 billion in payments to 4.4 million eligible borrowers and $6.1 billion in other loss mitigation and foreclosure prevention assistance.1

Servicers covered by these amendments to the consent orders include: Aurora Bank FSB,2 Bank of America, N.A., Citibank, N.A., EverBank, GMAC Mortgage, Goldman Sachs, HSBC Bank USA, N.A., JPMorgan Chase Bank, N.A., MetLife Bank,3 N.A., Morgan Stanley, PNC Bank, N.A., Sovereign Bank,4 SunTrust Bank,5 U.S. Bank, N.A., and Wells Fargo Bank, N.A. The amendments effectively ended requirements for these servicers to have an independent review of the files of their borrowers who were in the process of foreclosure at any time in 2009 and 2010. The independent review had been required by consent orders issued in 2011.6

In addition to these 15 servicers, OneWest Bank, FSB,7 which includes Financial Freedom and IndyMac Mortgage Services, has operated under a consent order since April 2011 that also required an independent review of its foreclosure activity in 2009 and 2010. That review is nearing completion. Where the independent consultant found errors that resulted in financial harm in reviews that have been completed, borrowers began to receive remediation in March 2014. Notifications to borrowers regarding the results of the OneWest Bank reviews will continue through the summer of 2014. This report provides data on the volume and categories of OneWest remediation determined thus far. OneWest is not subject to an amended consent order.

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GAO-14-376 FULL REPORT | G.A.O. Report Sees Deeper Bank Flaws in Foreclosures

GAO-14-376 FULL REPORT | G.A.O. Report Sees Deeper Bank Flaws in Foreclosures

FORECLOSURE REVIEW:

Regulators Could Strengthen Oversight and Improve Transparency of the Process

?GAO-14-376: Published: Apr 29, 2014. Publicly Released: Apr 29, 2014.


VIEW REPORT (PDF, 93 PAGES)

What GAO Found

To negotiate the $3.9 billion cash payment amount in servicers’ amended consent orders, the Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve System (Federal Reserve) considered information from the incomplete foreclosure review, including factors such as projected costs for completing the file reviews and remediation amounts that would have been paid to borrowers. To evaluate the final cash payment amount, GAO tested regulators’ major assumptions and found that the final negotiated amount generally fell within a reasonable range. Regulators generally met their goals for timeliness and amount of the cash payments. By December 2013, cash payments of between $300 and $125,000 had been distributed to most eligible borrowers.

Rather than defining specific objectives for the $6 billion in foreclosure prevention actions regulators negotiated with servicers, regulators identified broad principles, including that actions be meaningful and that borrowers be kept in their homes. To inform the design of the actions, regulators did not analyze available data, such as servicers’ recent volume of foreclosure prevention actions, and did not analyze various approaches by which servicers’ actions could be credited toward the total of $6 billion. Most servicers GAO spoke with said they anticipated they would be able to meet their obligation using their existing level of foreclosure prevention activity. In their oversight of the principles, OCC and the Federal Reserve are verifying servicers’ foreclosure prevention policies, but are not testing policy implementation. Most Federal Reserve examination teams have not begun their verification activities and the extent to which these activities will incorporate additional evaluation or testing of servicers’ implementation of the principles is unclear. Regulators’ manuals and federal internal control standards note that policy verification includes targeted testing. Without specific procedures, regulators cannot assess implementation of the principles and may miss opportunities to protect borrowers.

Regulators are sharing findings from the file reviews and amended consent order activities among supervisory staff and plan to issue public reports on results, but they have not determined the content of those reports. The file reviews generally confirmed servicing weaknesses identified by regulators in 2010. Regulators are sharing information among examination teams that oversee servicers, and some regulator staff GAO spoke with are taking steps to address weaknesses identified. Regulators also have promoted transparency by releasing publicly information on the status of cash payments. However, these efforts provided limited information on the processes used, such as how decisions about borrower payments were made. Federal internal control standards and GAO’s prior work ( GAO-03-102 and GAO-03-669 ) highlight the importance of providing relevant information on the processes used to obtain results. According to regulators, borrowers could obtain information from other sources, such as the payment administrator, but information on how decisions were made is not available from these sources. In the absence of information on the processes, regulators face risks to public confidence in the mortgage market, the restoration of which was one of the goals of the file review process.

Why GAO Did This Study

In 2011 and 2012, OCC and the Federal Reserve signed consent orders with 16 mortgage servicers that required the servicers to hire consultants to review foreclosure files for errors and remediate harm to borrowers. In 2013, regulators amended the consent orders for all but one servicer, ending the file reviews and requiring servicers to provide $3.9 billion in cash payments to about 4.4 million borrowers and $6 billion in foreclosure prevention actions, such as loan modifications. One servicer continued file review activities. GAO was asked to examine the amended consent order process. This report addresses (1) factors considered during cash payment negotiations between regulators and servicers and regulators’ goals for the payments, (2) the objectives of foreclosure prevention actions and how well regulators designed and are overseeing those actions to achieve objectives, and (3) regulators’ actions to share information from the file review and amended consent order processes and transparency of the processes. GAO analyzed regulators’ negotiation documents, oversight memorandums, and information provided to borrowers and the public about the file review and amended consent orders. GAO also interviewed representatives of regulators, servicers, and consultants.

What GAO Recommends

OCC and the Federal Reserve should define testing activities to oversee foreclosure prevention principles and include information on processes in public documents. In their comment letters, the regulators agreed to consider the recommendations.

For more information, contact Lawrance L. Evans, Jr. at (202) 512-8678 or evansl@gao.gov.

Recommendations for Executive Action

Recommendation: To help ensure that foreclosure prevention principles are being incorporated into servicers’ practices, the Comptroller of the Currency should direct examination teams to take additional steps to evaluate and test servicers’ implementation of the foreclosure prevention principles.

Agency Affected: Department of the Treasury: Office of the Comptroller of the Currency

Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To help ensure that foreclosure prevention principles are being incorporated into servicers’ practices, the Chairman of the Board of Governors of the Federal Reserve System should ensure that the planned activities to oversee the foreclosure prevention principles include evaluation and testing of servicers’ implementation of the principles.

Agency Affected: Federal Reserve System: Board of Governors

Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To better ensure transparency and public confidence in the amended consent order processes and results, the Comptroller of the Currency and the Chairman of the Board of Governors of the Federal Reserve System should include in their forthcoming reports or other public documents information on the processes used to determine cash payment amounts, such as the criteria servicers use to place borrowers in various payment categories.

Agency Affected: Department of the Treasury: Office of the Comptroller of the Currency

Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To better ensure transparency and public confidence in the amended consent order processes and results, the Comptroller of the Currency and the Chairman of the Board of Governors of the Federal Reserve System should include in their forthcoming reports or other public documents information on the processes used to determine cash payment amounts, such as the criteria servicers use to place borrowers in various payment categories.

Agency Affected: Federal Reserve System: Board of Governors

Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Additional Materials:

Contact:

Lawrance L. Evans, Jr
(202) 512-8678
evansl@gao.gov

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

____________________________

SEE ALSO:

housing icon, source: Comstock

Federal Response to the Foreclosure Crisis

Default and foreclosure rates for home mortgages are showing signs of improvement but remain high. The federal government has been seeking ways to help stem the wave of foreclosures and defaults that has adversely affected homeowners, local communities, and the nation’s economic recovery.

    1. New York Times ?- 3 hours ago
      Last year, regulators had negotiated a $10 billion deal with 15 banks over foreclosure issues Carlos Barria/ReutersLast year, regulators had …

    More news for G.A.O. Report Sees Deeper Bank Flaws in Foreclosures

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U.S. Said to Ask BofA for More Than $13 Billion Over RMBS

U.S. Said to Ask BofA for More Than $13 Billion Over RMBS

Bloomberg-

U.S. prosecutors are seeking more than $13 billion from Bank of America Corp. to resolve federal and state probes into the lender’s sale of bonds backed by home loans in the run-up to the 2008 financial crisis, according to people familiar with the matter.

The settlement would come on top of the $9.5 billion the bank agreed last month to pay to resolve Federal Housing Finance Agency claims, said two people who asked not to be named because the negotiations are private. A deal could come within the next two months, the people said.

[BLOOMBERG]

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Cummings Requests Hearing on Mortgage Settlement

Cummings Requests Hearing on Mortgage Settlement

New Documents Show High Error Rates at Banks, Foreclosure Review Terminated Before Full Harm Revealed  

Washington, D.C. (Apr. 24, 2014)—Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, sent a letter to Chairman Darrell Issa requesting a hearing to examine why federal regulators appear to have prematurely ended the Independent Foreclosure Review (IFR) and entered into a major settlement agreement with mortgage servicing companies in January 2013 just as the full extent of harm caused by abusive mortgage servicing practices was beginning to be revealed.

Cummings’ request is based on new documents obtained by the Committee showing that independent consultants brought in to review servicer abuses had identified high error rates in some categories directly before the IFR was terminated and the final settlement was announced.

For example, Bank of America’s independent consultant, Promontory Financial Group, LLC, found the bank had a 60% error rate in loan modification efforts; a 19% error rate in charging fees; and a 16% error rate in loans involving bankruptcy that were reviewed.  Promontory found similar trends in PNC Bank’s foreclosure activities, including “borrower financial injury” in 21% of cases reviewed.

The new documents also show that independent consultants had conducted significant preparatory work assembling files and creating systems to conduct more comprehensive reviews, but regulators suddenly halted these efforts in January 2013 despite projections that they would have been completed in months.

Promontory stated that “the peak of engagement was at the end of December 2012” and estimated that the projected time to complete its review of Bank of America was nine and a half months.  Similarly, PNC Bank’s independent consultant estimated that the review process could have been completed by June 2013.

“Now that we have obtained copies of these documents, they confirm that some mortgage servicing companies engaged in widespread and systemic foreclosure abuses, including charging improper and excessive fees, failing to process loan modifications in accordance with federal guidelines, and violating automatic stays after borrowers filed for bankruptcy,” Cummings wrote.  “It remains unclear why the regulators terminated the IFR prematurely, how regulators determined the compensation amounts servicers were required to pay under the settlement, and how regulators could claim that borrowers who were harmed by these servicers would benefit more from the settlement—including the settlement amounts paid for each error category—than by allowing the IFR to be completed.”

In his letter, Cummings requested that the Committee hold a hearing with representatives from the Federal Reserve, the Office of the Comptroller of the Currency (OCC), mortgage servicing companies, and independent consultants to address three key questions:

·        Why did the Federal Reserve and the OCC terminate the IFR prematurely before its objective had been achieved?

It is unclear why the regulators believed it was in the best interests of borrowers to end the IFR when high error rates were identified during preliminary reviews and consultants were poised to conduct more in-depth reviews to identify the full extent of harm. 

·        How did the regulators arrive at the compensation amounts in the settlement?

The settlement required banks to provide cash payments and other assistance to affected borrowers, but it is unclear what criteria were used to determine these settlement amounts, and whether these amounts were in any way related to the actual or estimated harm suffered by borrowers.

·        How did the regulators determine that the amounts mortgage servicers would pay—and the amounts borrowers would receive—would be more favorable under the settlement than if the IFR had been completed?

It is unclear how regulators determined that the settlement amounts would provide a greater benefit to borrowers than if the IFR had continued until the independent consultants could report reliable data on servicer error rates.

Cummings also commended Issa for conducting the investigation in a responsible and bipartisan manner and for helping to obtain the documents cited in today’s letter.

The full text of the letter is available here and copied below.

 

April 24, 2014
The Honorable Darrell E. Issa
Chairman
Committee on Oversight and Government Reform
U.S. House of RepresentativesWashington, DC 20515

Dear Mr. Chairman:
I am writing to request that the Committee hold a hearing on widespread foreclosure abuses and illegal activities engaged in by mortgage servicing companies.  I request that the hearing also examine why the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (OCC) appear to have prematurely ended the Independent Foreclosure Review (IFR) and entered into a major settlement agreement with most of the servicers just as the full extent of their harm was beginning to be revealed.

I want to thank you for the bipartisan and responsible manner in which you and your staff have conducted this investigation.  As you know, this issue has been a top priority for me over the past four years, and it affects more than 4 million borrowers who had homes in foreclosure in 2009 and 2010.

The Committee unanimously agreed on February 10, 2011, to include in our oversight plan a commitment to “examine the foreclosure crisis including wrongful foreclosures and other abuses by mortgage servicing companies.”[1]  In May 2013—after the Federal Reserve and the OCC entered into consent agreements with servicing companies—you and I sent bipartisan requests seeking documents about the settlement.[2]  Our staffs then conducted in camera review of these documents, and on March 4, 2014, we sent bipartisan follow-up requests seeking copies of a narrow subset of documents relevant to our investigation.[3]

Now that we have obtained copies of these documents, they confirm that some mortgage servicing companies engaged in widespread and systemic foreclosure abuses, including charging improper and excessive fees, failing to process loan modifications in accordance with federal guidelines, and violating automatic stays after borrowers filed for bankruptcy.  The documents show that several independent consultants that were brought in to review the activities of servicers had identified very high error rates in several categories of review directly before the settlement that terminated the IFR.  In addition, the documents show that independent consultants had conducted significant preparatory work assembling files and creating systems to conduct more comprehensive reviews, but these efforts were halted suddenly in January 2013. 

It remains unclear why the regulators terminated the IFR prematurely, how regulators determined the compensation amounts servicers were required to pay under the settlement,  and how regulators could claim that borrowers who were harmed by these servicers would benefit more from the settlement—including the amounts paid for each error category—than by allowing the IFR to be completed.

High Error Rates Identified by Independent Consultants

The documents obtained by the Committee show that independent consultants hired by mortgage servicing companies began to identify high error rates in several error categories as they started to review the activities of the servicers directly before the IFR was terminated.  It appears from the documents that some of these error rates were not yet included in reports when the IFR was suddenly halted.

In April 2011, the Federal Reserve, OCC, and the then-Office of Thrift Supervision issued consent agreements with 14 servicers regarding improper and abusive practices in residential mortgage loan servicing and foreclosure processing.[4]  Two other servicers later entered into similar consent orders.[5]  The consent orders required the servicers to engage independent consultants “to conduct an independent review of certain residential foreclosure actions regarding individual borrowers with respect to the Bank’s mortgage servicing portfolio.”[6]

The purpose of the IFR was to determine whether foreclosures were conducted “in accordance with applicable state and federal law,” including “whether any errors, misrepresentations, or other deficiencies … resulted in financial injury to the borrower or the mortgagee.”[7]  Under the IFR, independent consultants were supposed to review 100% of files with certain types of potential errors, and they were required to develop sampling methodologies to estimate the extent of errors in other categories.  In addition, borrowers could request reviews of their foreclosures under a Request for Review process.[8]

As the IFR progressed, independent consultants began developing preliminary data on error rates for some categories of violations.  For example, the Committee has now obtained documents from Promontory Financial Group, LLC, an independent consultant that was hired to review the foreclosure activities of Bank of America, PNC Bank, and Wells Fargo.

On May 3, 2013, Promontory submitted a document describing preliminary information on errors it had identified in Bank of America’s “loan mitigation” efforts, including “modification adherence to HAMP or proprietary guidelines.”  Regarding the Loan Mitigation category, the independent consultant found:

Our preliminary error rate at closure of the review on a relatively low number of loans passed through senior review was 60%.  This indicated systemic issues in the accuracy and timeliness of processing loan modifications that were not yet reflected in our IC Data Report.[9]

After examining improper fees charged by Bank of America, the independent consultant found:

At the time of closure of the review our analysis of potential paid harm based on initial File Review Lookback fee testing through senior review was 19%.  This indicated systemic issues in the charging of fees that were not yet reflected in our IC Data Report.[10]

In a draft document entitled “File Review Lookback Preliminary Observations Update – Bankruptcy,” the independent consultant wrote:

All 2,899 loans identified for Bankruptcy review have been subjected to initial testing.  Senior review has been completed on approximately 57% of these loans and the preliminary exception rate of loans with potential financial harm is approximately 16% (465 of 2,899).[11]

Regarding these bankruptcy-related errors, the independent consultant also noted:  “Our error rate as provided in the IC Data Report provided a reasonable estimation of the Bankruptcy errors as we were substantially complete with these files.”[12]

The Committee also obtained documents from Promontory showing similar trends with respect to the foreclosure activities of PNC Bank.  For example, in a document dated December 19, 2012, identified as a “Briefing before the Compliance Committee of the Board of PNC Bank, N.A.,” the independent consultant issued an “Update on the Foreclosure Look-back Review and Complaints Solicitation Process.”  After reviewing a sample of 4,797 loans, the independent consultant found “borrower financial injury” in 21% of cases and “notable exception” errors in 24% of cases.[13]  The independent consultant also stated:

[R]eview has identified seven void foreclosure sales as a result of servicer error, misrepresentation or deficiency in the foreclosure process:  Bank did not provide appropriate notice to borrower prior to foreclosure sale, Complaint filed on incorrect facts (no due process) and lack of standing to bring foreclosure actions.[14]

Lack of Sufficient Data When IFR Terminated

            Although the documents described above indicated high error rates in several categories of foreclosure activities, other documents obtained by the Committee show that when the Federal Reserve and OCC terminated the IFR and agreed to the settlement in January 2013, the independent consultants had just begun to finalize review procedures, assemble complete loan files, and produce detailed data on foreclosure abuses.  With this complex and costly preparatory work completed, several independent consultants projected that they could finish their work in 2013, but the Federal Reserve and OCC ended the review in January 2013.

On January 7, 2013, the Federal Reserve and the OCC announced that they had reached an agreement with 10 of the 14 servicers subject to the 2011 consent orders.[15]  Under this settlement, the servicers agreed to provide $8.5 billion in “cash payments and other assistance,” including $3.3 billion in direct payments to borrowers who had homes in foreclosure in 2009 or 2010.[16]  Three additional mortgage servicers later agreed to similar settlement terms, which increased the amount of cash payments and assistance to $9.3 billion and resulted in 13 amended consent orders being issued on February 28, 2013.[17]

Significantly, under the terms of this new agreement, “the participating servicers would cease the Independent Foreclosure Review, which involved case-by-case reviews.”[18]

Documents obtained by the Committee show that, when the IFR was terminated and the Federal Reserve and OCC announced the settlement in January 2013, independent consultants were just completing the preparatory work necessary to conduct in-depth reviews of borrower files and were ready to proceed through the review process.  For example, the independent consultant for Bank of America stated: 

The peak of the engagement was at the end of December 2012.  At this time we had 22 Promontory employees and 1,055 contracted Promontory Consultants working on the IFR.[19]

This independent consultant estimated that since it had put in place the required systems and hired and trained essential personnel, the “projected time to complete the review was approximately nine and a half months.”[20]

The independent consultant also described the significant challenges it faced obtaining information from Bank of America in usable formats:

Due to the high volume of loans experiencing foreclosure difficulty, the information relating to a borrower’s history with loan modification applications, bankruptcy filing status, service dates, etc., was often entered in as free-form text “notes” within the servicing system, and was not readily available for analytical manipulation at the time of population or segment identification.[21]

It noted further:

The diverse and complex nature of the Servicer’s mortgage servicing and documentation systems and platforms, coupled with the number of rules we were required to create for testing and short timeframe, precluded the creation of a highly automated file management system.  Therefore, the majority of relevant borrower and servicing information had to be manually extracted from the Servicer’s various systems and platforms.[22]

The independent consultant made clear that its work was not complete at the time of the settlement:

Promontory envisioned a two-stage review, where “deep dives” to identify harm would follow the development of statistically robust, validated methods to identify borrowers with actual harm.  These statistical methods were in the process of development using the results from the stage-one review (Promontory’s initial work on the IFR lookback sample and our review of borrower outreach complaints) at the time that review process was terminated in early January 2013.  No deep dives had been identified or conducted at the time the review was ended. …

Because our data were not complete at the time of the closure of the review, however, the ICDR [Independent Consultant Data Report] does not form a sound basis for inference concerning the frequency of errors in the population within the scope of the April 13, 2011, Consent Orders.[23]

The independent consultant described a similar situation with its review of the foreclosure activities of PNC Bank.  It reported that “[a]s of December 7, 2012, Promontory’s initial sample review was completed,” but “[a]s a result of financial injury errors found in the initial sample, an expanded sample of loans was added to the review.”[24]

The independent consultant estimated that only a few additional months would have been necessary to complete the review process, stating that it “projected the completion of the remaining expanded sample reviews by 6/30/13.”[25]

Promontory also described similar challenges for its work examining the foreclosure activities of Wells Fargo:

Promontory encountered significant difficulty in obtaining complete files from Wells Fargo.  These difficulties were most acute at the project’s commencement, but difficulties continued for the duration of the project.  In general, these difficulties occurred for two reasons.  First, performing a comprehensive file review required many different documents.  These documents were located on different systems, housed in different locations and originated from different business lines (included mortgages originated by entities acquired by Wells Fargo) and various third party vendors such as law firms.  Second, specific document requirements evolved during the review period as the regulators finalized guidance on certain review methodologies and as Promontory developed greater familiarity with Wells Fargo’s systems.[26]

            PriceWaterhouseCoopers LLP (PwC), which was hired as the independent consultant for Citibank N.A., GMAC Mortgage, SunTrust Mortgage, and U.S. Bank National Association, also noted the lack of complete loan files.  PwC wrote:

Nearly as soon as the review began, PwC discovered that the files servicers had assembled were often incomplete or needed to be supplemented with additional information.[27]

This independent consultant also anticipated completing its work within one year, writing: 

Just prior to the January 2013 settlements, PwC projected completing the engagements in 2013 or, in the case of GMAC and due to constraints related to its bankruptcy, in early 2014.[28]

Questions for Hearing

On January 7, 2013, Comptroller of the Currency Thomas J. Curry stated that “it has become clear that carrying the process through to its conclusion would divert money away from the impacted homeowners and also needlessly delay the dispensation of compensation to affected borrowers.”[29]  He also stated that the settlement “will get more money to more people more quickly, and it will speed recovery in the nation’s housing markets.”[30]

Regulators repeatedly argued that ending the IFR was “in the interest of providing the greatest benefit to borrowers potentially affected by the practices … addressed in the 2011 Consent Order in a more timely manner than would have occurred under the Independent Foreclosure Review.”[31]

In response to questioning by Senator Elizabeth Warren during a hearing on April 11, 2013, Richard Ashton, Deputy General Counsel of the Federal Reserve, testified that “the approach that was taken in the settlement agreement really is focused on trying to get cash to the borrowers as quickly as possible.”[32]

The new documents obtained by the Committee raise three fundamental questions about these assertions that should be answered at a public hearing.

Why did the Federal Reserve and the OCC terminate the IFR prematurely before its objective had been achieved?

It is unclear why the regulators believed it was in the best interests of borrowers to end the IFR when high error rates were identified during preliminary reviews and more detailed reviews had been prepared to identify the full extent of harm.  It is also unclear what caused regulators to conclude that even in instances in which the extensive preparatory work needed to enable independent consultants to conduct in-depth loan file reviews had been completed, the IFR should be terminated before those reviews were actually conducted or before reviews requested by borrowers had begun.

How did the regulators arrive at the compensation amounts in the settlement?

The amended consent orders executed on February 28, 2013, required servicers to make cash payments into a Qualified Settlement Fund, from which payments were provided to borrowers.  For example, Bank of America was required to pay $1,127,453,261,[33]  PNC Bank was required to pay $69,433,224,[34] JP Morgan Chase Bank N.A. was required to pay $753,250,131,[35] and Citibank, N.A. was required to pay $306,574,179.[36]  It is unclear what criteria were used to determine these settlement amounts.  It is also unclear whether these settlement amounts were in any way related to the actual or estimated harm suffered by borrowers.

How did the regulators determine that the amounts mortgage servicers would pay—and the amounts borrowers would receive—would be more favorable under the settlement than if the IFR had been completed?

When the IFR was terminated, at least some independent consultants had not reviewed enough loan files to determine reliable error rates.  In some cases, however, preliminary data had identified double-digit error rates.  Nonetheless, the Federal Reserve and the OCC argued that terminating the IFR would provide the “greatest benefit” to borrowers in a more timely manner than if the IFR had continued.

It is unclear how the Federal Reserve and the OCC made this determination.  It is also unclear how the regulators determined that the settlement amounts for each mortgage servicing company—and the payments ultimately provided to individual borrowers from these settlement amounts—would provide a greater benefit to borrowers than if the IFR had continued until the independent consultants could report reliable data on servicer error rates.  It is also unclear how regulators used these findings to assess whether terminating the IFR before the full extent of borrower harm was known was in the best interests of borrowers.

Conclusion

More than 4 million borrowers who had homes in foreclosure in 2009 and 2010 were directly affected by the actions of these mortgage servicing companies and the decisions of these regulators.  For the reasons set forth above, I believe the Committee should convene a hearing to examine these critical issues with representatives from the Federal Reserve, the OCC, mortgage servicers, and independent consultants.  Thank you for your consideration of this request.

Sincerely,

 

 

Elijah E. Cummings
Ranking Member

 



[1]House Committee on Oversight and Government Reform, Oversight Plans for All House Committees with Accompanying Recommendations, 112th Cong. (2011) (H. Rept. 112–48).  See also House Committee on Oversight and Government Reform, Oversight Plans for All House Committees, 113th Cong. (2013) (H. Rept. 113–23) (agreeing to continue examining this issue in the 113th Congress).

[2]Letter from Chairman Darrell E. Issa and Ranking Member Elijah E. Cummings, House Committee on Oversight and Government Reform, to Chairman Ben S. Bernanke, Board of Governors of the Federal Reserve System (May 15, 2013); Letter from Chairman Darrell E. Issa and Ranking Member Elijah E. Cummings, House Committee on Oversight and Government Reform, to Thomas J. Curry, Comptroller of the Currency (May 22, 2013).

[3]Letter from Chairman Darrell E. Issa and Ranking Member Elijah E. Cummings, House Committee on Oversight and Government Reform, to Chair Janet L. Yellen, Board of Governors of the Federal Reserve System (Mar. 4, 2014); Letter from Chairman Darrell E. Issa and Ranking Member Elijah E. Cummings, House Committee on Oversight and Government Reform, to Thomas J. Curry, Comptroller of the Currency (Mar. 4, 2014).

[4]Board of Governors of the Federal Reserve System, Press Release (Apr. 13, 2011) (online at www.federalreserve.gov/newsevents/press/enforcement/20110413a.htm); Office of the Comptroller of the Currency, OCC Takes Enforcement Action Against Eight Servicers for Unsafe and Unsound Foreclosure Practices (Apr. 13, 2011) (online at www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47.html).

[5]Board of Governors of the Federal Reserve System, Press Release (Sept. 1, 2011) (online at www.federalreserve.gov/newsevents/press/enforcement/20110901b.htm); Board of Governors of the Federal Reserve System, Press Release (Apr. 3, 2012) (online at www.federalreserve.gov/newsevents/press/enforcement/20120403b.htm).

[6]Office of the Comptroller of the Currency, Consent Order, in the Matter of Bank of America, N.A. (Apr. 13, 2011) (online at www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47b.pdf).

[7]Office of the Comptroller of the Currency, Consent Order, in the Matter of Bank of America, N.A. (Apr. 13, 2011) (online at www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47b.pdf).

[8]Office of the Comptroller of the Currency, Independent Foreclosure Review Underway (Nov. 1, 2011) (online at www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-133.html).

[9]Promontory Financial Group, LLC, Mortgage Foreclosure Consent Order—Article VII; Independent Consultant (IC) Interviews (Bank of America) (May 3, 2013).

[10]Id.

[11]Promontory Financial Group, LLC, Article VII Foreclosure Review File Review Lookback, Preliminary Observations Update—Bankruptcy (draft dated Dec. 17, 2012).

[12]Promontory Financial Group, LLC, Mortgage Foreclosure Consent Order – Article VII; Independent Consultant (IC) Interviews (Bank of America) (May 3, 2013).

[13]Promontory Financial Group, LLC, Update on the Foreclosure Look-back Review and Complaints Solicitation Process (briefing before the Compliance Committee of the Board, PNC Bank, N.A.) (Dec. 19, 2012).

[14]Id.

[15]Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance (Jan. 7, 2013) (online at www.federalreserve.gov/newsevents/press/bcreg/20130107a.htm).

[16]Id.

[17]Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency, Amendments to Consent Orders Memorialize $9.3 Billion Foreclosure Agreement (Feb. 28, 2013) (online at www.federalreserve.gov/newsevents/press/enforcement/20130228a.htm).

[18]Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance (Jan. 7, 2013) (online at www.federalreserve.gov/newsevents/press/bcreg/20130107a.htm).

[19]Promontory Financial Group, LLC, Mortgage Foreclosure Consent Order—Article VII; Independent Consultant (IC) Interviews (Bank of America) (May 3, 2013).

[20]Id.

[21]Id.

[22]Id.

[23]Id.

[24]Promontory Financial Group, LLC, Update on the Foreclosure Look-back Review and Complaints Solicitation Process (briefing before the Compliance Committee of the Board, PNC Bank, N.A.) (Dec. 19, 2012).

[25]Promontory Financial Group, LLC, Mortgage Foreclosure Consent Order—Article VII; Independent Consultant (IC) Interviews (PNC Bank, N.A.) (undated).

[26]Promontory Financial Group, LLC, Mortgage Foreclosure Consent Order—Article VII; Independent Consultant (IC) Interviews (Wells Fargo) (May 3, 2013).

[27]PriceWaterhouseCoopers, LLP, Mortgage Foreclosure Consent Order—Article VII; Independent Consultant (IC) Interviews (Citibank N.A., GMAC Mortgage, SunTrust Mortgage, and U.S. Bank National Association) (Apr. 16, 2013).

[28]Id.

[29]Office of the Comptroller of the Currency, Statement from Comptroller of the Currency Thomas J. Curry on the IFR Settlement (Jan. 7, 2013) (online at www.occ.gov/news-issuances/news-releases/2013/nr-occ-2013-4.html).

[30]Id.

[31]Office of the Comptroller of the Currency, Amendment to April 13, 2011 Consent Order, in the Matter of PNC Bank, N.A. (Feb. 28, 2013) (online at www.occ.gov/static/enforcement-actions/ea2013-124.pdf).

[32]Senate Committee on Banking, Housing and Urban Affairs, Subcommittee on Financial Institutions and Consumer Protection, Hearing on Outsourcing Accountability? Examining the Role of Independent Consultants, 113th Cong. (Apr. 11, 2013).

[33]Office of the Comptroller of the Currency, Amendment to April 13, 2011 Consent Order, in the Matter of Bank of America, N.A. (Feb. 28, 2013) (online at www.occ.gov/static/enforcement-actions/ea2013-127.pdf).

[34]Office of the Comptroller of the Currency, Amendment to April 13, 2011 Consent Order, in the Matter of PNC Bank, N.A. (Feb. 28, 2013) (online at www.occ.gov/static/enforcement-actions/ea2013-124.pdf).

[35]Office of the Comptroller of the Currency, Amendment to April 13, 2011 Consent Order, in the Matter of JP Morgan Chase Bank, N.A. (Feb. 28, 2013) (online at www.occ.gov/static/enforcement-actions/ea2013-129.pdf).

[36]Office of the Comptroller of the Currency, Amendment to April 13, 2011 Consent Order, in the Matter of Citibank, N.A. (Feb. 28, 2013) (online at www.occ.gov/static/enforcement-actions/ea2013-131.pdf).

Source: http://democrats.oversight.house.gov/press-releases/cummings-requests-hearing-on-mortgage-settlement/

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Bank of America in Settlement Talks With Justice Department Over Shoddy Mortgages

Bank of America in Settlement Talks With Justice Department Over Shoddy Mortgages

Window dressing.

 

WSJ-

Bank of America Corp. is engaged in multibillion-dollar settlement talks with the Justice Department to end investigations into shoddy residential mortgage backed securities, according to people familiar with the matter.

The talks have been ongoing for months and it isn’t clear how much longer it could take for a deal to be completed, these people said. If a deal cannot be struck, the Justice Department would have to decide whether to file a lawsuit over the bank’s role in packaging poor-performing mortgages into securities that were sold to investors. The government has already sued the bank over one set of suspect mortgages, though a magistrate judge recently recommended the suit be dismissed, saying the government had overreached its legal authority.

[WALL STREET JOURNAL]

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Citi agrees to pay $1.125 Billion across 68 trusts

Citi agrees to pay $1.125 Billion across 68 trusts

18 Institutional Investors in RMBS Issued by Citigroup Announce Binding Offer by Citigroup to Four RMBS Trustees to Settle Mortgage Repurchase Claims for 68 RMBS Trusts

4.7.2014

HOUSTON, April 7, 2014 – Today, 18 institutional investors represented by Gibbs & Bruns LLP (“Institutional Investors”) announced they have reached an agreement with Citigroup (“Citi”) under which Citi will make a binding offer (“Offer”) to the Trustees of 68 RMBS Trusts issued by Citi to settle mortgage repurchase claims.  The Institutional Investors support the agreement and have asked the Trustees to accept it.  The Trusts included in the Offer are listed on Exhibit “A.”   

The Trustees will have until June 30, 2014 to accept the Offer, which may be extended pursuant to the terms of the Offer for an additional forty-five days.  The Offer includes the following key terms:

1.      Payment by Citi of $1.125 billion in cash to the Trusts to settle mortgage repurchase claims;

2.      Reimbursement to the Trustees of expenses associated with their evaluation of the Offer; and

3.      A release of all repurchase claims that have been or could have been asserted by the Trusts.

 The Institutional Investors who are parties to the agreement are: 

·         Bayerische Landesbank

·         BlackRock Financial Management Inc.

·         Cascade Investment, L.L.C.

·         Federal Home Loan Bank of Atlanta

·         Federal Home Loan Mortgage Corporation

·         Goldman Sachs Asset Management, L.P.

·         ING Investment Management LLC

·         Invesco Advisers, Inc.

·         Kore Advisors, L.P.

·         Landesbank Baden-Wuerttemberg

·         Metropolitan Life Insurance Company

·         Pacific Investment Management Company LLC

·         Sealink Funding Limited

·         Teachers Insurance and Annuity Association of America

·         The Prudential Insurance Company of America

·         The TCW Group, Inc.

·         Thrivent Financial for Lutherans

·         Western Asset Management Company

The agreement is subject to regulatory approval by FHFA and acceptance of the Offer by the Trustees.  Pursuant to the agreement, the Institutional Investors have requested that the Trustees accept the Settlement.  The Institutional Investors have also agreed to use their reasonable best efforts to obtain court approval of the settlement, if the Trustees elect to accept the Offer and seek a judicial instruction concerning their decision to do so.  Attorneys’ fees for the Institutional Investors’ counsel, Gibbs & Bruns, will be paid in addition to—and not out of—the Settlement Payment upon the latter of the Trustees’ Acceptance or Final Court Approval, if a judicial instruction is sought. 

read more [GIBBS & BRUNS]


 

Exhibit A

CMLTI 2005-1

CMLTI 2006-NC1

CMLTI 2005-10

CMLTI 2006-NC2

CMLTI 2005-11

CMLTI 2006-NCB1

CMLTI 2005-2

CMLTI 2006-SHL1

CMLTI 2005-3

CMLTI 2006-WF1

CMLTI 2005-4

CMLTI 2006-WF2

CMLTI 2005-5

CMLTI 2006-WFH1

CMLTI 2005-6

CMLTI 2006-WFH2

CMLTI 2005-7

CMLTI 2006-WFH3

CMLTI 2005-8

CMLTI 2006-WFH4

CMLTI 2005-9

CMLTI 2006-WMC1

CMLTI 2005-HE1

CMLTI 2007-10

CMLTI 2005-HE2

CMLTI 2007-2

CMLTI 2005-HE3

CMLTI 2007-6

CMLTI 2005-HE4

CMLTI 2007-AHL1

CMLTI 2005-OPT1

CMLTI 2007-AHL2

CMLTI 2005-OPT3

CMLTI 2007-AHL3

CMLTI 2005-OPT4

CMLTI 2007-AMC1

CMLTI 2005-SHL1

CMLTI 2007-AMC2

CMLTI 2005-WF1

CMLTI 2007-AMC3

CMLTI 2005-WF2

CMLTI 2007-AMC4

CMLTI 2006-4

CMLTI 2007-AR1

CMLTI 2006-AMC1

CMLTI 2007-AR4

CMLTI 2006-AR1

CMLTI 2007-AR5

CMLTI 2006-AR2

CMLTI 2007-AR7

CMLTI 2006-AR3

CMLTI 2007-AR8

CMLTI 2006-AR5

CMLTI 2007-FS1

CMLTI 2006-AR6

CMLTI 2007-OPX1

CMLTI 2006-AR7

CMLTI 2007-SHL1

CMLTI 2006-AR9

CMLTI 2007-WFH1

CMLTI 2006-FX1

CMLTI 2007-WFH2

CMLTI 2006-HE1

CMLTI 2007-WFH3

CMLTI 2006-HE2

CMLTI 2007-WFH4

CMLTI 2006-HE3

CMLTI 2008-2

###

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Wall Street Got $26.7 Billion In Bonuses Last Year. That’s Enough To Feed Every Hungry American

Wall Street Got $26.7 Billion In Bonuses Last Year. That’s Enough To Feed Every Hungry American

Wonder what the kickback percentage fees of this amount went to the Corrupted Politicians?


HuffPO-

The average Wall Street bonus increased 15 percent in 2013, bringing the industry’s overall bonuses to a total of $26.7 billion, the largest since 2008. This milestone came just a few months after an NBC News/Wall Street Journal poll found that only 14 percent of Americans have a positive opinion of Wall Street, five years after a financial crisis spurred by these institutions. We’re talking congressional popularity numbers. Ouch.

We’re always told that “Main Street” is directly affected by the state of our financial markets. And yet, even as the stock market continues to rebound, average American workers struggle to find employment, keep their homes and even put food on the table. Wall Street’s earnings meanwhile continue to break records. Seems like a rather one-sided relationship as of late … but outside the decadent halls of Wall Street, that money could be put to excellent use.

With $26.7 billion, we could …

[HUFFINGTONPOST]

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