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UNSEALED COMPLAINT | Whistleblower says BofA defrauded HAMP

UNSEALED COMPLAINT | Whistleblower says BofA defrauded HAMP


REUTERS-

Bank of America NA prevented homeowners from receiving mortgage-loan modifications under a federal program in order to avoid millions of dollars in losses while benefitting from financial incentives for participating in the program, according to a complaint unsealed in federal court Wednesday.

The suit is the second whistleblower complaint unsealed so far with apparent ties to the $1 billion False Claims Act settlement announced by Bank of America and the U.S. Attorney’s Office for the Eastern District of New York on February 9.

[REUTERS]

H/T Bill Behrens for the complaint

[ipaper docId=84409561 access_key=key-vfacp2btrdr8hbsd24e height=600 width=600 /]

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DELMAN v. BANK OF AMERICA – VERIFIED SHAREHOLDER DERIVATIVE COMPLAINT “Countrywide Mortgage Practices”

DELMAN v. BANK OF AMERICA – VERIFIED SHAREHOLDER DERIVATIVE COMPLAINT “Countrywide Mortgage Practices”


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
———————————————————x
RICHARD DELMAN, derivatively
on behalf of the Nominal Defendant,
Plaintiff,

–against –

CHARLES K. GIFFORD, D. PAUL JONES,
JR., FRANK P. BRAMBLE, SR., MONICA
C. LOZANO, THOMAS J. MAY, VIRGIS
W. COLBERT, CHARLES O. HOLLIDAY,
BRIAN T. MOYNIHAN, DONALD E.
POWELL, MUKESH D. AMBANI, SUSAN
S. BIES, CHARLES O. ROSSOTTI and
CHARLES H. NOSKI,
Defendants,

–and–

BANK OF AMERICA CORP., a Delaware
corporation,
Nominal Defendant

EXCERPTS:

2. Thus, at the time the CWC acquisition closed in July 2008, BAC management and
its Board had a full understanding of the potential liabilities which might arise in the future.
Rather than coming clean, or resolving the CWC issues, BAC management and the Board
adopted a wrongful and obstinate policy: refusing to cooperate with government regulators
investigating the Company’s mortgage foreclosure practices; obtaining reimbursement on
government guaranteed mortgages which were likely violative of the False Claims Act; failing
to comply with an Arizona Consent Decree requiring that BAC fairly entertain mortgage
modifications; engaging in massive “Robo-Signing” of foreclosure documents; agreeing to
cease Robo-Signing, but then resuming Robo-Signing despite its questionable legality. (“Robo
Signing” is the bulk execution of foreclosure-related documents without actual review for
accuracy and adequacy).

[…]

4. The BAC Board knew that BAC was legally obligated to proceed with legacy
mortgage foreclosures in a prudent lawful manner. This did not occur. Rather, the Board wholly
failed to rein in management. On the contrary, it let management engage in blatantly unlawful
excesses as outlined above and as discussed in detail below. The BAC Board is composed of
banking, finance and business professionals who fully understand the issues facing BAC, and
who fully appreciate why its response need to be lawful and transparent. Nonetheless, the Board
ignored numerous c1ear-as-day reports of irregularity bordering on fraud, and allowed the
Company to get drawn in to additional illegality, materially raising BAC’s potential liability.
As a result, the BAC Board breached its fiduciary duty and should be held liable to BAC for the
harm it has caused.

[ipaper docId=68772564 access_key=key-22m84cze0ajakeka54aj height=600 width=600 /]

 

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Foreclosure Fraud Settlement divides state attorneys general

Foreclosure Fraud Settlement divides state attorneys general


Lets not act surprised in this as we always knew there was something cooking behind the scenes and not everyone agreed and probably disappointed with the approach Tom Miller from Iowa was heading.

WaPO-

As state attorneys general continue their months-long settlement negotiations with the nation’s largest banks over widespread problems in foreclosure practices, they have yet to resolve differences within their own group on key issues.

Even within the 14-member “executive committee” of attorneys general who are leading the 50-state coalition, some have very different visions of what exactly a settlement should look like.

[…]

A handful of crucial states, including California, Illinois and New York, have undertaken their own investigations into mortgage industry practices, subpoenaing information about business practices and seeking meetings with executives about such things as securitization to faulty court affidavits. Other officials, such as in Oklahoma, have threatened to pursue their own settlements with mortgage servicers.


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Foreclosure Fraud Price Tag: $20 Billion

Foreclosure Fraud Price Tag: $20 Billion


HuffPO-

The nation’s largest mortgage companies are operating on the assumption that they will have to pay as much as $20 billion to resolve claims of widespread foreclosure abuse, an amount four times what they had originally proposed, the top federal official overseeing the discussions told state officials Monday, according to people who participated in the conversation.

Associate U.S. Attorney General Tom Perrelli told a bipartisan group of state attorneys general during a conference call that he believes the banks have accepted the realization that a wide-ranging settlement to the months-long probes will cost them much more than the $5 billion offer they floated last month, according to officials with direct knowledge of the call. Perrelli said he’s basing his belief on his recent conversations with representatives of the five targeted firms: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.


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HUD Secretary Donovan, Foreclosure Fraud Settlement to Come in a “Matter of Weeks”

HUD Secretary Donovan, Foreclosure Fraud Settlement to Come in a “Matter of Weeks”


LA Times-

A settlement between a coalition of federal and state agencies and banks over foreclosure practices will come in a “matter of weeks,” Shaun Donovan, secretary of Housing and Urban Development, told the Los Angeles Times.

Donovan’s agency is involved in the negotiations with the banks, along with attorneys general from all 50 states and officials from the Justice Department and other federal agencies.

continue  reading… LA TIMES

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Sizing up a sweeping mortgage settlement

Sizing up a sweeping mortgage settlement


Mortgage lenders like Bank of America and Wells Fargo are fighting the fight on all fronts, with the latest being False Claims Act violations. Here’s what to look for in any settlements.

FORTUNE — The trouble for America’s largest mortgage lenders just keeps mounting. How much will it cost them to make it all go away?

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Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers

Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers


Boy does this have loads of Meat…

HuffPO EXCLUSIVE by Shahien Nasiripour

WASHINGTON — A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.

The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.

[…]

The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures.

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