UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
F’EDERAL DEPOSIT INSURANCE
CORPORATION, AS RECEIVER FOR
INDYMAC BANK, F.S.B.,
Plaintiff,
V.
MICHAEL PERRY,
Defendant.
[…]
PRELIMINARY STATEMENT
3. Between at least April and October 2007, defendant Michael Perry (“Perry”), chief executive officer (“CEO”) of IndyMac Bank, F.S.B. (“Bank” or “IndyMac”), negligently permitted, and presided over, and failed to suspend, limit or stop, the production of a pool of more than $ 10 billion in risþ, residential loans intended for sale into a secondary market that at the time was admitted by Perry to be increasingly unstable, unpredictable, and illiquid due to increasing concerns about the credit quality of loans (including IndyMac’s loans). Perversely, instead of enforcing credit standards, Perry chose to roll the dice in an aggressive gamble to increase market share while sacrificing credit standards, even though a reasonable banker of a depository institution would have suspended, limited, or stopped the production of these risky loans during this time of known, unprecedented, and escalating risks. Unable to sell these loans as intended into an illiquid secondary market, Perry lost his gamble and IndyMac was forced by the fourth quarter of 2007 to transfer the loans into IndyMac’s investment portfolio where the loans ultimately generated substantial Bank losses in excess of $600 million. At the time of this transfer in the fourth quarter of 2007, IndyMac itself projected,that lifetime losses for these loans would exceed at least $600 million.
Justia.com Opinion Summary:: Bondholders of the failed Washington Mutual Bank (“WAMU”) alleged that JPMorgan Chase (“Chase”), through a series of improper acts, pressured the federal government to seize WAMU and then sell to it the bank’s most valuable assets, without any accompanying liabilities, for a drastically undervalued price. The bondholders asserted three Texas state law claims in Texas state court, but after the Federal Deposit Insurance Corporation (“FDIC”) intervened in the lawsuit, the case was removed to federal district court. At issue was whether the district court properly dismissed the complaint, finding that 12 U.S.C. 1821(d)(13)(D)(ii) jurisdictionally barred appellants from obtaining judicial review of their claims because they had not exhausted their administrative remedies under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”). The court held that the suit fell outside the scope of the jurisdictional bar of section 1821(d)(13)(D) because the complaint neither asserted a claim under FIRREA nor constituted an action for payment from, or seeking a determination with respect to, the assets of a depository institution for which the FDIC was receiver. Consequently, the court did not reach alternative arguments and therefore, reversed the decision of the district court and remanded for further proceedings.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 5, 2011 Decided June 24, 2011
No. 10-5245
AMERICAN NATIONAL INSURANCE COMPANY AND AMERICAN
NATIONAL PROPERTY AND CASUALTY COMPANY,
APPELLANTS
FARM FAMILY LIFE INSURANCE COMPANY AND FARM FAMILY
CASUALTY INSURANCE COMPANY,
APPELLANTS
NATIONAL WESTERN LIFE INSURANCE COMPANY,
APPELLANT
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER
FOR WASHINGTON MUTUAL BANK, HENDERSON, NEVADA, ET
AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:09-cv-01743)
All of this goes to a simple point: safety-and-soundness regulation is fundamentally incompatible with law enforcement. Prudential regulators aren’t interested in law enforcement. They’re interested in preserving quiet and stability and that sometimes means papering over problems and looking the other way.
Prof. Adam Levitin–
Over the past couple of years, the Massachusetts Attorney General’s office has reached settlements with a number of major banks regarding mortgage securitization. These settlements has received very little notice in the press, but I think they provide a real template for future AG settlements and are worth examining.
Former Washington Mutual Inc. (WAMUQ) Chief Executive Officer Kerry Killinger and Chief Operating Officer Stephen Rotella are in lawsuit settlement talks with the Federal Deposit Insurance Corp., according to a court filing.
Lawyers for Killinger, Rotella and David Schneider, Washington Mutual’s former home-loans president, exchanged term sheets with FDIC attorneys and are “diligently working to resolve their remaining disputes,” according to papers filed yesterday in federal court in Seattle.
“In some instances, the settlement terms must have consent of certain third parties,” lawyers for both sides said.
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION AS PURCHASER OF THE LOANS AND OTHER ASSETS OF WASHINGTON MUTUAL BANK, FORMERLY KNOWN AS WASHINGTON MUTUAL BANK, FA (THE “SAVINGS BANK”) FROM THE FEDERAL DEPOSIT INSURANCE CORPORATION, ACTING AS RECEIVER FOR THE SAVINGS BANK AND PURSUANT TO ITS
AUTHORITY UNDER THE FEDERAL DEPOSIT INSURANCE ACT, 12 U.S.C. 9 1821(D),
-versus-
FREDERICK W. BUTLER,
EXCERPTS:
FURTHER, why an Order should not be entered that plaintiff pursued the Prosecution of this foreclosure action, and participated and engaged in actions,Constituting Settlement Conferences Before the Court in this Matter, when plaintiff had full knowledge, and plaintiffs counsel knew or should have known, that plaintiff had received payment on May 22,20 10 for the amount specified in paragraph SIXTH of its complaint dated on or about January 19,2010, as due and owing (that is, $434,382.89);
FURTHER, why an Order should not be entered that plaintiff and plaintiffs’ Counsels made material misrepresentations to the Court, on April 14,201 1 and May 2, 2011, for example, thereby engaging in misconduct before the Court;
[…]
FURTHER, why plaintiffs counsels, the law offices of Steven J. Baum, and their co counsel Cullen & Dykman LLP, should not be sanctioned pursuant to New York Judiciary Law 487 for misstatements and misrepresentations made to the Court on May 2, 2011, to defendant during the course of 11 settlement conferences over 12 months, and to defendant’s counsel and the Court with respect to the fact and procedural history of this case;
FURTHER, why Judgment should not be entered pursuant to CPLR 32111(a)(l), 321 l(a)(3), 321 l(a)(7) and 321 l(a)(8) dismissing this foreclosure action with prejudice;
FURTHER, why judgment should not be entered imposing sanctions against Plaintiff on the basis that plaintiffs affidavit of facts- namely its verified summons and complaint — contained material misrepresentations about its legal capacity to sue, about which plaintiff had full knowledge from commencement of this;
Register O’Brien said, “Knowing what I now know, it would be a dereliction of my duties as the keeper of the records to record these documents and any other documents that contain questionable signatures. To do so, would make me a willing participant in a continuing scheme which has corrupted the chain of title of thousands of Essex County property owners. I have decided to put a stop to this reckless behavior and hold these lenders and their agents accountable for the authenticity of what they are attempting to record in my Registry. I do not believe this to be unreasonable.”
Federal regulators have ordered Midvale-based Ally Bank to fix significant deficiencies in its foreclosure practices covering a two-year period in which among other things it submitted bogus legal documents for bankruptcies and other court actions.
The order from the Federal Reserve and the Federal Deposit Insurance Corp. alleges employees of Ally, two sister companies and their parent company, Allied Financial, signed foreclosure documents without reading them — a possibly illegal practice known as “robo-signing.”
Mistakes happen, of course. And loan servicers like to contend that if errors occur, they are rare and honestly made. But after sifting through the data produced by this investigation, Mr. White disagreed that problems are rare. “In Senate testimony, an executive from Countrywide said its error rate was 1 percent,” Mr. White recalled. “The mortgage servicer industry error rate might be 10 times higher, based on the number of cases we are looking at.”
“There are continued flaws in the process, and they are not merely technical,” Mr. White continued. “Those flaws undermine the integrity of the bankruptcy system. Many homeowners have been harmed, including where the lender has come in and said ‘we want to lift the stay and go back into foreclosure proceedings,’ even though they lacked a sufficient basis to do it.”
The investigation conducted by the OCC and the Fed included a review of just 100 foreclosure files.
Housing Wire-
When mortgage servicers signed consent orders with the Office of the Comptroller of the Currency and the Federal Reserve, these companies were required to hire outside firms to conduct “look back” evaluations of questionable foreclosure practices.
But these reviews will not be made public, according to an OCC spokesman.
To: Members of the Media
Fr: Massachusetts Register of Deeds John O’Brien and North Carolina Register of Deeds Jeff Thigpen
Re: FDIC Chair Shelia Bair concurs with O’Brien and Thigpen that damages to consumer’s “has yet to be quantified”
This story has to be told: No settlements with the Big Banks until we know the “extent of the problem” and until the amount of exposure is “quantified”.
Bloomberg News
FDIC Chairman Sheila Bair
The head of the Federal Deposit Insurance Corp. is warning that flaws may have “infected millions of foreclosures” and questioned whether other regulators’ inquiries into problems at the nation’s mortgage-servicing companies have been thorough enough.
“We do not yet really know the full extent of the problem,” FDIC Chairman Sheila Bair said Thursday in written remarks submitted to a hearing of the Senate Banking Committee. “Flawed mortgage-banking processes have potentially infected millions of foreclosures, and the damages to be assessed against these operations could be significant and take years to materialize.”
Federal and state officials launched numerous investigations last autumn after revelations that, to process foreclosures, banks used “robo-signers” who didn’t review documents prepared by their colleagues. Banking regulators’ have said their reviews of a sample of 2,800 foreclosure cases have found a small number of improper foreclosures.
Acting Comptroller of the Currency John Walsh said last month that the problems were limited in scope. They include cases that shouldn’t have gone forward under a law blocking foreclosures on military personnel, ones in which the borrower was in bankruptcy and cases in which borrowers were already on the verge of having their loans modified.
But Ms. Bair, who is departing her position in July, argued that other regulators likely missed homeowners who should have been provided loan assistance but who were improperly denied such help. The FDIC, she said, has found a “not insignificant” number of such cases. “There needs to be much more aggressive action,” she told lawmakers.
Under consent orders that 14 banks and thrifts reached with regulators in March, financial institutions are required to hire a consultant to review their foreclosures over the past two years to identify any borrowers who were harmed by foreclosure-processing problems.
Ms. Bair, however, questioned whether those reviews will truly be independent. Such consultants “may have other business with [banks] or future business they would like to do with them,” Ms. Bair said. “This is a huge issue.”
Federal Reserve Chairman Ben Bernanke, in response to questions from lawmakers at the hearing, didn’t address this criticism directly, but reiterated that regulators plan to fine banks as a result of the inquiry into foreclosure problems. He noted that the foreclosure crisis is “at some level” a problem of bank regulation, but noted it is “also a macroeconomic problem.”
Ms. Bair also raised the possibility that banks may be forced by government-controlled mortgage giants Fannie Mae and Freddie Mac to buy back more defaulted loans.
Fannie and Freddie have been pressing banks to do so, and numerous investors have filed lawsuits with similar demands. “A significant amount of this exposure has yet to be quantified,” she said in her prepared remarks.
REGISTERS O’BRIEN & THIGPEN SAY “PUT THE BRAKES ON ANY SETTLEMENT WITH THE BIG BANKS … REGISTERS OF DEEDS NEED TO BE AT THE TABLE”
Southern Essex County (MA) Register of Deeds, John O’Brien and Guilford County (NC) Register of Deeds, Jeff Thigpen, are today publicly asking Iowa’s Attorney General, Tom Miller, who has been coordinating the National Association of Attorneys General (“NAAG”) investigation into the banks’ improper mortgage dealings to stop settlement negotiations until there is a full accounting of the damage that the bank’s practices have inflicted upon the land recordation system and consumers chains of title across the nation and have again asked for the Registers of Deeds to have a seat at the negotiation table.
O’Brien and Thigpen, wrote to Miller in early April, asking that the Registers of Deeds be represented at any settlement talks. They have not heard back from Miller, and they find that very disturbing. “We represent Main Street, in contrast to Wall Street, and that constituency needs to be heard” said O’Brien.
Register O’Brien, who is leading the nationwide effort against the Mortgage Electronic Registration System (“MERS”) and its member banks said, “We need to take a long hard look at the damage that these banks have caused, not only to our economy but also to people’s chains of title. There can be no settlement for pennies on the dollar.” O’Brien points to MERS and their failure to record documents in the local registry of deeds in order to avoid paying billions of dollars in recording fees, thereby corrupting the chains of title of hundreds of thousands of homeowners across the country, as well as the alleged fraud associated with the robo-signing, as reasons for putting on the breaks. “That is why it is so important that the Registers of Deeds be brought into the room. We need to bring our knowledge of the land recordation system and consumer’s problematic chain of title issues to the table.” Common sense mandates that if a bridge collapses and there is a meeting to re-build that bridge, that the structural engineers must be invited to the table. “Why the Registers of Deeds have not been involved in these negotiations is puzzling” according to O’Brien and Thigpen
Thigpen’s office sent Attorney General Miller and Federal Regulators 4,500 potentially fraudulent and/or forged documents recorded in his Registry by Doc X. Doc X is owned by Lender Processing Services, which was acting on behalf of Wells Fargo, Bank of America, and MERS, among others. “I am but one county, however I feel confident based upon my research that this is a disaster of epic proportions, for homeowner’s chains of title in the United States. As a result, it needs to be clearly established that citizens can no longer be harmed by the reckless disregard that the major banks and MERS have had for the American consumer and the integrity of public recording offices. People need to be assured that their ownership rights are secure and protected, that people who sign legal documents are who they say they are, and that there is transparency and fair dealing by all. I don’t think we are there yet.” stated Thigpen.
In addition, O’Brien and Thigpen are concerned about the reports that Miller has received hundreds of thousands of dollars in campaign contributions from banks, finance, insurance, and real estate contributors since he announced that he was leading the NAAG investigation. O’Brien and Thigpen said, “Without questioning Millers integrity, Miller should consider either returning the contributions or voluntarily stepping aside so that there would not be even the slightest appearance of a conflict of interest.”
These Registers want to know “Why is there such a rush to have a settlement? “How can the consumers be fully protected when the extent of the damages are still unknown?”
The head of the Federal Deposit Insurance Corp. is warning that flaws may have “infected millions of foreclosures” and questioned whether other regulators’ inquiries into problems at the nation’s mortgage-servicing companies have been thorough enough.
“We do not yet really know the full extent of the problem,” FDIC Chairman Sheila Bair said Thursday in written remarks submitted to a hearing of the Senate Banking Committee. “Flawed mortgage-banking processes have potentially infected millions of foreclosures, and the damages to be assessed against these operations could be significant and take years to materialize.”
FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver of
Washington Mutual Bank,
v.
LSI APPRAISAL, LLC; FIDELITY
NATIONAL INFORMATION
SERVICES, INC.; LENDER
PROCESSING SERVICES, INC.;
LEENDER PROCESSING SERVICES, LLC; LPS PROPERTY TAX
SOLUTIONS, INC., f/k/a FIDELITY
NATIONAL TAX SERVICE, INC.; LSI
TITLE COMPANY;
and LSI TITLE AGENCY, INC.
Posted in STOP FORECLOSURE FRAUDComments Off on COMPLAINT | FDIC v. Lender Processing Services, Inc., LSI Appraisal LLC, Fidelity National Information Services, Inc. et al
The Federal Deposit Insurance Corporation (“FDIC”), in its capacity as Receiver for Washington Mutual Bank (“WAMU”), filed a complaint on May 9, 2011 in the U.S. District Court for the Central District of California to recover alleged losses of approximately $154,519,000. The FDIC contends these losses were a direct and proximate result of the defendants’ alleged breach of contract with WAMU and alleged gross negligence of the defendants with respect to the provision of certain services by LPS’s subsidiary LSI Appraisal LLC, an appraisal management company. In particular, the FDIC claims that the services provided failed to conform with federal and state law, regulatory guidelines and other industry standards, including specifically the provisions of the Uniform Standards of Professional Appraisal Practice (“USPAP”). LPS previously described the possibility of this suit in its Form 10-Q filed May 5, 2011.
In its complaint, the FDIC cites, as the cause of the damages claimed, 220 appraisals performed between June 2006 and May 2008. However, for more than 75 percent of the appraisals identified by the FDIC, LSI was contracted only to provide reviews of appraisals, not to conduct the initial, full appraisals. For these properties, the full appraisals were provided by other entities, unrelated to LSI. For all appraisals subject to this complaint, LPS believes there is no basis for a claim that LSI engaged in “gross negligence” or breach of contract related to these appraisal services.
LPS stands firmly behind the integrity of the services it provides to the mortgage industry and intends to vigorously defend itself against these allegations.
Certainly everyone knows to read the fine print by now…
ProPUBLICA-
A few months ago, Bank of America offered Sergio Cortez of Staten Island, N.Y., the help he desperately needed to stay in his home: a break on his mortgage. Like millions of others, he was facing foreclosure. But there was a catch buried in the fine print. Cortez had to waive any possibility of ever suing the bank for anything relating to the loan.
Cortez isn’t alone. While regulators have banned the practice, some banks and others who handle mortgages have still been forcing homeowners into a corner: You want a chance at saving your home? Then you’ll have to waive your rights.
The Federal Deposit Insurance Corporation (FDIC) today announced Chairman Sheila C. Bair’s official departure will be effective July 8th, 2011. Consistent with previous public statements, Chairman Bair has announced her intention to depart the agency following the expiration of her term as Chairman. The FDIC will hold a board meeting during the first week of July. This will be Chairman Bair’s final board meeting.
This Special Foreclosure Edition describes lessons learned from an interagency review of foreclosure practices at the 14 largest residential mortgage servicers and includes examples of effective mortgage servicing practices derived from these lessons.
The signatures of the same names on more than 4,500 documents handled by Lender Processing Services Inc. (LPS) for real estate valued at $624.8 million varied enough to raise doubts about their validity, Jeff Thigpen, register of deeds in Guilford County, North Carolina, told reporters today in Greensboro.
JOHN L. O’BRIEN, JR.
Register of Deeds Phone: 978-542-1704 Fax: 978-542-1706
website: www.salemdeeds.com
Commonwealth of Massachusetts Southern Essex District Registry of Deeds
Shetland Park 45 Congress Street Suite 4100
Salem, Massachusetts 01970
NEWS FOR IMMEDIATE RELEASE
Salem, MA May 3rd, 2011
Contact: Kevin Harvey, 1st Assistant Register 978-542-1724
kevin.harvey@sec.state.ma.us
The 1960’s television show “To Tell the Truth”, where imposters pretend to be the central character, is playing out today at the Essex Southern District Registry of Deeds and Register John O’Brien is not happy about it. After the 60 Minutes’ expose on Mortgage Fraud was aired and showed that leading mortgage services have been using forged documents to foreclose on homeowners, Register John O’Brien reviewed mortgage discharges recorded in his Registry. To view the 60 Minutes Article and a link to the video, go to http://www.cbsnews.com/stories/2011/04/01/60minutes/main20049646.shtml
What he found astonished him. In 2010 alone, 286 Bank of America’s mortgage discharges were recorded with what he calls “questionable and possibly fraudulent signatures of the notorious Linda Green.” O’Brien said that he has found at least four variations of Green’s signature recorded in his Registry.
Green, who was spotlighted in the 60 Minutes Episode, had her name signed by various individuals on thousands of documents recorded at Registries of Deeds throughout the state of Massachusetts and across the nation. In Register O’Brien’s opinion, these documents have corrupted Essex County homeowner’s chains of title. “I have a responsibility to ensure that the documents recorded in my Registry meet the statutory requirements of recording. If, however, I am presented with evidence that clearly shows that fraud may have been committed then it is my responsibility as the keeper of records to turn these documents over to the appropriate authorities for their review and action.”
O’Brien has today forwarded certified copies of these discharges to United States Attorney, Carmen Ortez, Attorney General, Martha Coakley, and Essex County District Attorney, Jonathan Blodgett. “If what I suspect has happened, then the people who have committed this fraud should be held accountable for their actions” commented O’Brien. O’Brien fears that this fraudulent behavior is only the tip of the iceberg and feels strongly that lenders and mortgage servicers should be held accountable for their actions. Actions which he originally only thought involved a scheme to circumvent the land recordation system by creating a private, for profit cyber-registry to benefit the big bank’s pocketbooks. Now it seems that MERS, and its member banks may have added fraud to their repertoire of services that they offer.
Register O’Brien questions if a good portion of this foreclosure mess could have been avoided in the first place, if the big banks did what they were supposed to do and recorded assignments like other lenders do. Register O’Brien believes: 1) Homeowners deserve to know who owns their mortgages; 2) Assignments should be recorded in the appropriate registry of deeds, each and every time a mortgage is sold, to provided transparency and public disclosure of ownership; and 3) Any and all documents should be signed by an authorized authority at the entity that actually owns and holds the note secured by the mortgage.
![[VIDEO] Register of Deeds Jeff Thigpen Press Release on Mortgage Fraud](https://stopforeclosurefraud.com/wp-content/themes/gazette/thumb.php?src=wp-content/uploads/2011/05/JeffThigpenPressRelease21.jpg&w=100&h=57&zc=1&q=90)
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