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BROOKINGS PAPER: Efficient Credit Policies in a Housing Debt Crisis – Janice Eberly and Arvind Krishnamurthy

BROOKINGS PAPER: Efficient Credit Policies in a Housing Debt Crisis – Janice Eberly and Arvind Krishnamurthy


Brookings-

Summary

Should another housing market crash occur, the government’s highest priority should be helping cash-short homeowners maintain spending in a weak economy and avoid foreclosure by temporarily reducing or deferring mortgage payments.

In “Efficient Credit Policies in a Housing Debt Crisis,” Janice Eberly of Northwestern University and Arvind Krishnamurthy of Stanford University build a theoretical framework to guide policymakers ahead of a housing collapse and in the aftermath, finding that reducing the loan principal spreads the benefits of government funds over a long period of time, rather than focusing on the crisis period. The housing bust of the late 2000s was at the heart of the worst recession since the Great Depression, and resulted in a set of government programs to help beleaguered homeowners and cushion the blow to the overall economy. The authors focus on the importance of liquidity constraints and consumer spending in the overall economy, especially during a financial crisis when there is a need to support household consumption.

[BROOKINGS]

Down Load PDF of This Case

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Abigail C. Field: Assessing Schneiderman’s Task Force Gamble

Abigail C. Field: Assessing Schneiderman’s Task Force Gamble


Abigail Field-

My latest for FireDogLake. For even more confirmation that the Feds aren’t interested in bank accountability, regardless of the State half of the task force’s intentions, see Congressman Brad Miller on why he’s not the task force Executive Director and Richard Eskow on the obviousness of the problem. 

As people increasingly realize that the mortgage settlement was an enforcement fraud, attention’s turned to the “new“ joint Federal/State task force that’s supposed to make the settlement into a “down payment,” by delivering much more. And so far people don’t like what they see, and are saying so. What’s striking about the resulting PR push back, however, is that it just highlights how banker-fraud-friendly our federal government is.

For example, Attorney General Eric Schneiderman penned a Daily News Op-Ed in which he pitches “More than 50 attorneys, investigators and analysts have already been deployed to support our investigations, with many more on the way” as somehow adequate to deliver on that “down payment” promise when the Savings and Loan crisis took over 1,000 and Enron alone took over 100. Not only hasn’t the federal government corroborated AG Schneiderman’s claim of “many more on the way”; “many more” than 50+ doesn’t sound like anywhere near the 1,000+ needed to approach the ballpark of accountability.

[REALITY CHECK]

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The Bankers’ Subversion of the Rule of Law, Notary and Land Records edition

The Bankers’ Subversion of the Rule of Law, Notary and Land Records edition


Abigail C. Filed-

Hi

For the next couple of weeks, I’m one of the David Dayen subs at FireDogLake–no one person could fill his shoes–and this post ran there earlier today. This version is slightly updated but essentially the same.

One way to see the double standard at the heart of the foreclosure fraud—one set of laws for the bailed out banks, one for the rest of us—is to focus on the role of notaries public, and then consider that role in light of what our Supreme Court said about notaries in 1984, in a case called Bernal v. Fainter, Secretary of State of Texas.

First, let’s recap the role of notaries in the foreclosure fraud crisis: Notaries are the people who verify that someone actually is who they say they are when that person signs a document. Because banks and their agents industrialized “Document Execution” as part of their foreclosure business model, notaries did not do their jobs. Notaries’ failure to verify identities has been so complete that many people will sign as one person, say, “Linda Green.” Notaries have also been told to sign documents using one name, and then notarize their own “surrogate” signature. “Well, what’s the big deal?” bank defenders say. Beyond the fact that there’s no “business convenience” exception to following the rule of law, consider Bernal.

Bernal involved Texas’s requirement that all notaries be citizens; lawful permanent resident aliens need not apply. Bernal challenged the Constitutionality for the citizenship requirement. To rule on the question, the Court had to consider what notaries did, and whether or not what notaries did was so political, so central to representative democracy, that limiting being a notary to citizens was rational. In finding that notaries were important but not political officers of the state, the Court made some observations of note.

[REALITY CHECK]

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Foreclosure Threats Even After Loan Modifications

Foreclosure Threats Even After Loan Modifications


WFTV-

A Port Saint John family thought they had avoided disaster after a loan modification was approved.

But  a year later, they claim, Bank of America is foreclosing on their home even though they haven’t missed a mortgage payment since the modification.

Billie Whaley posted three signs  at her  home, all attacking Bank of America.

One reads: “Please help us. Bank of America is trying to steal our home.”

Whaley claims the lender double-crossed her family by approving  a loan modification, taking payments for nearly a year, and now threatening foreclosure.

“I can’t think about it and not cry. We put everything into this home,” Whaley said.

[WFTV]

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Richard (RJ) Eskow: The White House And Mortgage Fraud: So Far It’s All Talk, No Action

Richard (RJ) Eskow: The White House And Mortgage Fraud: So Far It’s All Talk, No Action


HuffPO-

The Obama Administration worked for months on a deal that would have let America’s biggest banks off the hook for a crime wave of runaway mortgage fraud. All they had to do in return was pledge a negligible sum of money, to be paid by their shareholders and not themselves, and which they would dispense themselves. In return, crooked bankers received immunity from prosecution – and even from investigation.

After the deal came under attack from a number of its allies, the Administration settled with the banks anyway. But it promised millions of wronged homeowners – and the nation as a whole – that it would move “aggressively” to investigate criminal misdeeds and prosecute bankers and anyone else who broke the law.

That was then, this is now. Two and half months later the Administration hasn’t even started to take the inadequate steps it promised it would take. The clock is running out on the statute of limitations and there’s no sign that the Administration has lifted a finger to investigate criminal bankers.

Talk vs. Action …

[HUFFINGTON POST]

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Obama’s mortgage unit is AWOL … NY AG Eric Schneiderman should quit this fraud

Obama’s mortgage unit is AWOL … NY AG Eric Schneiderman should quit this fraud


What we have learned so far: Whenever dealing with the banks and or with the government, they are from the same mold. We cannot tell any difference.

This “mortgage task force group” thing is also NO Different than that MERS system…There are no employees!

NY Daily News-

On March 9 — 45 days after the speech and 30 days after the announcement — we met with Schneiderman in New York City and asked him for an update. He had just returned from Washington, where he had been personally looking for office space. As of that date, he had no office, no phones, no staff and no executive director. None of the 55 staff members promised by Holder had materialized. On April 2, we bumped into Schneiderman on a train leaving Washington for New York and learned that the situation was the same.

Tuesday, calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”

The promises of the President have led to little or no concrete action.

Read more:  [NY DAILY NEWS]

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Abigail Field: Hiding the Enforcement Fraud At the Heart of the Mortgage Settlement

Abigail Field: Hiding the Enforcement Fraud At the Heart of the Mortgage Settlement


Abigail C. Field-

On Thursday, April 5th U.S. District Court Judge Rosemary M. Collyer announced she had decided to sign off on the ”$25 billion” Mortgage Settlement. By “announced”, I mean she signed the consent orders all our major law enforcers and the biggest bankers had agreed to, and entered them into the record. Judge Collyer didn’t actually say anything about the deal. She didn’t let anyone else say anything, either: she didn’t hold a public hearing on the deal.

In acting silently, Judge Collyer not only okayed the deal’s lousy terms, which institutionalize servicer theft and foreclosure fraud, she reinforced the incredibly poor public process that’s kept the enforcement fraud at the heart of the deal hidden. Deliberately hidden.

Magical Misdirection

To understand just how deceptive “our” government and “our” law enforcers have been with us

[REALITY CHECK]

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Couple paid off their mortgage – in full – late last year… Ocwen threatened to foreclose anyway

Couple paid off their mortgage – in full – late last year… Ocwen threatened to foreclose anyway


TBO-

“There was no doubt that it was paid off,” Manzo said. “I just assumed that the bank was lagging behind and maybe the system was running every 30 days and it would be corrected.”

But that didn’t happen. Instead, they say, West Palm Beach-based Ocwen Loan Servicing charged them about $2,000 in penalties because they stopped monthly mortgage payments.

“We stopped because we had already paid off the loan,” Manzo explained. “They say we’re in default, and now I’m worried we’re going to lose our home.”

[TBO.com]

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[VIDEO] Shaun Donovan on the Foreclosure Fraud Settlement & Wish Wash

[VIDEO] Shaun Donovan on the Foreclosure Fraud Settlement & Wish Wash


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BREAKING: The $25B Foreclosure Fraud settlement has been approved by U.S. District Judge Rosemary Collyer.

BREAKING: The $25B Foreclosure Fraud settlement has been approved by U.S. District Judge Rosemary Collyer.


Via

Nothing from the consent judgment entered into court in the $25B foreclosure settlement may constitute “evidence against Defendant.”

WSJ-

The settlement was announced in February and filed in court as a consent judgment last month. Judge Rosemary Collyer approved the landmark settlement on Wednesday. The signed order was filed in U.S. District Court for the District of Columbia.

The pact will offer reductions in loan principal and other assistance to qualifying homeowners. The largest portion of the aid, valued at $17 billion, goes to borrowers at risk of foreclosure. Banks will pay $5 billion in fines, including nearly $1 billion to the Federal Housing Administration.

[WALL STREET JOURNAL]

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Review Finds Possible Flaws in More Than 138,000 Bank Foreclosures

Review Finds Possible Flaws in More Than 138,000 Bank Foreclosures


Not this word again “Flaw”…it’s FULL   B L O W N   FRAUD!

Why wasn’t this review done prior to any settlement? Because they never began any investigation.

DealBook-

The nation’s biggest banks may have put the huge $25 billion settlement over bad foreclosure practices behind them, but that doesn’t mean their mortgage troubles are over.

A separate review — this time by independent consultants on behalf of the Office of the Comptroller of the Currency — flagged more than 138,000 cases for possible flaws in the foreclosure process at the nation’s largest mortgage servicers. Those include foreclosures involved with the so-called robo-signing scandal, in which bank representatives churned through hundreds of documents a day in foreclosure proceedings without reviewing them for accuracy.

[DEALBOOK]

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Computer Forensic Advances Raise Complex Issues

Computer Forensic Advances Raise Complex Issues


via: Alina

e-discovery is a must. Everything was transmitted electronically. An electronic database where its members “shake hands” to make transfers. Preservation letters must be sent out to the foreclosing entities. Most states have stringent spoliation laws. If evidence is destroyed, it goes against the entity doing the destroying.

Law.Com-

Advanced forensic ability leads to advanced law enforcement capability. That’s not a particularly insightful theorem but, nevertheless, an accurate one.

Probably no forensic realm has seen a more expansive increase in capabilities than the analysis of digital devices, and this reality was brought home in what were certainly the two most prominent trials of 2011 — State of Florida v. Casey Anthony and People of the State of California v. Conrad Murray. In both cases, the timelines generated by digital forensic evidence played significant roles in the prosecutions’ respective attempts to prove guilt.

FORENSIC TIMELINE ANALYSIS …

In the Conrad Murray case, a recording of a cell phone conversation between Michael Jackson and the defendant stored on the latter’s phone was introduced into evidence, which forensic testimony demonstrated occurred six weeks prior to Jackson’s death. Jackson’s obviously slurred and …

[LAW.COM]

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Re-POST: E-Discovery …Electronic Registration Systems WORST NIGHTMARE!

Re-POST: E-Discovery …Electronic Registration Systems WORST NIGHTMARE!


Via: Discovery Tactics aka Anthony Martinez & Assoc.

Latest Electronically Stored Information (ESI) Cases

I’ve been harping on the importance of demanding and acessing ESI from foreclosing parties for quite some time now.  A properly made ESI discovery request will provide numerous “smoking gun” documents that are sure to place the opposing party in a uncomfortable position.  Below I’ve identifed some of the most recent and more important cases that involve ESI.

—————————————————-

Court Grants Defendant’s Motion for Entry of Clawback Provision

Rajala v. McGuire Woods LLP, 2010 WL 2649582 (D. Kan. July 22, 2010) Plaintiff, as Bankruptcy Trustee, brought suit against defendant, alleging several claims. The parties could not agree on the entry of a clawback provision. Accordingly, defendant moved the…

Jury Instruction Allowing Inference that Destroyed Evidence Was Unfavorable and Payment of Attorneys’ Fees and Costs Ordered as Sanction for Failure to Preserve

Medcorp, Inc. v. Pinpoint Tech., Inc., 2010 WL 2500301 (D. Colo. June 15, 2010) Finding “willful” spoliation of 43 hard drives “in the sense that Plaintiff was aware of its responsibilities to preserve relevant evidence and failed to take necessary…

Judge Scheindlin Amends Recent Pension Opinion

On May 28th, Judge Shira Scheindlin entered an order amending her recent opinion in Pension Comm. of Univ. of Montreal Pension Plan v. Bank of Am. Secs., LLC. The order provides important clarification regarding the scope of a party’s obligation…

Court Rules Failure to Copy Files on Flash Drive Prior to Failure of the Drive Violated Duty to Preserve

Wilson v. Thorn Energy, LLC, 2010 WL 1712236 (S.D.N.Y. Mar. 15, 2010) In this case, the court ordered sanctions for defendants’ failure to preserve relevant data where defendants failed to back up a flash drive containing all relevant financial records…

Court Orders Monetary Sanctions for Production Delay Resulting from Counsel’s Failure to Become Familiar with Plaintiff’s Retention Policies and Systems

GFI Acquisition, LLC v. Am. Federated Title Corp. (In re A & M Fla. Props. II, LLC), 2010 WL 1418861 (Bankr. S.D.N.Y. Apr. 7, 2010) Where plaintiff’s counsel “failed in his obligation to locate and produce all relevant documents in…

Court Rules Communications with Attorney Using Work Computer are Protected as Privileged

Stengart v. Loving Care Agency, Inc., 2010 WL 1189458 (N.J. Mar. 30, 2010) In this employment litigation, the Supreme Court of New Jersey addressed whether employees have a reasonable expectation of privacy as to attorney-client privileged emails sent and received…

Despite Malaysian Blocking Statute, Court Compels Third Party’s Production of Foreign Banking Information Pursuant to Subpoena

Gucci Amer., Inc. v. Curveal Fashion, 2010 WL 808639 (S.D.N.Y. Mar. 8, 2010) Plaintiff sought to compel the production of documents and information regarding defendants’ Malaysian bank accounts pursuant to a subpoena served on United Overseas Bank’s New York Agency…

Court Provides Detailed Analysis of Law of Spoliation, Orders Adverse Inference Instruction, Monetary Sanctions for Intentional Spoliation of ESI

Rimkus Consulting Group, Inc. v. Cammarata, 2010 WL 645253 (S.D. Tex. Feb. 19, 2010) For intentional spoliation, the court declined to order terminating sanctions but ordered an adverse inference instruction and for defendants to pay plaintiff’s attorneys fees and costs….

Court Finds Data “Not Reasonably Accessible,” Denies Motion to Compel

Rodriguez-Torres v. Gov. Dev. Bank of Puerto Rico, 265 F.R.D. 40 (D.P.R. 2010) In this employment discrimination case, the court found the electronically stored information (“ESI”) requested by the plaintiffs “not reasonably accessible because of the undue burden and cost”…

“Zubulake Revisited: Six Years Later”: Judge Shira Scheindlin Issues her Latest e-Discovery Opinion

Pension Comm. of Univ. of Montreal Pension Plan v. Bank of Am. Secs., LLC, 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010) (Amended Order) Issued earlier this month, Judge Shira Scheindlin’s opinion in Pension Comm. of Univer. of Montreal Pension Plan…

Court Compels Discovery from Foreign Corporation Pursuant to Federal Rules of Civil Procedure

In re Global Power Equip. Group, Inc., 418 B.R. 833 (Bankr. D. Del. 2009) Upon a motion to compel production of documents from claimant, a foreign corporation, the court found the documents at issue to be within the control of…

Swiss Government Says It Would Seize UBS Data Sought by U.S.

Bloomberg.com, July 8, 2009 By David Voreacos and Mort Lucoff July 8 (Bloomberg) — Switzerland said it would seize UBS AG data to prevent the U.S. Justice Department from pursuing a U.S. court order seeking the identities of 52,000 American…

Finding Defendants’ Behavior “a Textbook Case of Discovery Abuse,” Court Orders $1,022,700 in Monetary Sanctions

Kipperman v. Onex Corp., 2009 WL 1473708 (N.D. Ga. May 27, 2009) In this constructive transfer and fraud case arising out of the 2003 bankruptcy of Magnatrax Corporation, plaintiff alleged numerous discovery abuses on the part of defendants and sought…

Court Declines to Compel Production of Documents from Foreign Jurisdiction upon Finding a Lack of Personal Jurisdiction and where Certain Documents are Protected from Production by Israeli Law

Linde v. Arab Bank, PLC, 2009 WL 1456573 (E.D.N.Y. May 22, 2009) In this case, defendant Arab Bank moved to compel production of documents, pursuant to subpoena, by non-parties Israel Discount Bank, Ltd. (“IDB”), its indirect, wholly –owned subsidiary, Israel…

Granting Motion to Compel, Court Orders Appointment of Independent Expert “to Retrieve any Deleted Responsive Files from Defendants’ Computers”

Bank of Mongolia v. M & P Global Fin. Servs., Inc., 2009 WL 1117312 (S.D. Fla. Apr. 24, 2009) In this case arising from allegations that defendants conspired to defraud plaintiff of $23 million, defendants failed to properly and timely…

Court Orders Production of Relevant Source Code Citing Defendant’s Suggestion for Mitigating Costs

Metavante Corp. v. Emigrant Savings Bank, 2008 WL 4722336 (E.D. Wis. Oct. 24, 2008) In this breach of contract case, Emigrant filed several motions to compel Metavante’s response to multiple discovery requests. One motion sought the production of source code…

Updated List: Local Rules, Forms and Guidelines of United States District Courts Addressing E-Discovery Issues

At least 41 United States District Courts now require compliance with special local rules, forms or guidelines addressing the discovery of electronically stored information. In some districts where there are no local rules or court-mandated forms, individual judges have created…

Finding “No Reason to Treat Websites Differently than Other Electronic Files,” Court Grants Adverse Inference for Failure to Preserve Website

Arteria Prop. Pty Ltd. v. Universal Funding V.T.O., Inc., 2008 WL 4513696 (D.N.J. Oct. 1, 2008) (Not for Publication) In this case arising from failed negotiations for a long term development loan, the plaintiff filed a motion for spoliation sanctions…

Court Denies Protective Order, Orders Allegedly Proprietary Data Produced Directly to Competitor

In re NVMS, LLC, 2008 WL 4488963 (Bankr. M.D. Tenn. Mar. 21, 2008) In this case, the debtor, a medical services company, moved for expedited discovery of information contained in the database of a former billing partner. In July of…

No Spoliation Found Where Expert Drafted His Report on Computer, Without Saving or Preserving Progressive Iterations

In re Teleglobe Communications Corp., 2008 WL 3198875 (Bankr. D. Del. Aug. 7, 2008) In this lengthy opinion addressing a variety of issues, the bankruptcy judge denied defendants’ motion to exclude testimony of the plaintiff’s expert as a sanction for…

Magistrate Judge “Clearly Erred” by Analyzing Cost-Shifting Dispute for Paper Production under Seven-Factor Zubulake Test

Tierno v. Rite Aid Corp., 2008 WL 3287035 (N.D. Cal. July 31, 2008) In this wage and hour employment case, plaintiff sought documents about class members’ employment and salary history, terminations, performance evaluations, discipline, certain communications, and personnel files. Rite…

Inadequate Preservation Efforts Necessitate Restoration and Production of Email from Backup Tapes, and Forensic Search of CEO’s Laptop

Treppel v. Biovail Corp., 2008 WL 866594 (S.D.N.Y. Apr. 2, 2008) In this case, plaintiff alleged that Biovail Corp., its CEO, general counsel and others engaged in a “smear campaign” that destroyed plaintiff’s career as a securities analyst. He asserted…

Magistrate Judge Sets Protocol for Plaintiff’s Forensic Examination of Former Employee’s Computer and Requests Affidavit from Expert Explaining Certain Issues

Equity Analytics, LLC v. Lundin, 248 F.R.D. 331 (D.D.C. 2008) In this case, plaintiff Equity Analytics claimed that defendant, its former employee, gained illegal access to electronically stored information after he was fired. Defendant explained that another Equity employee had…

Recent Amendments to Federal Rules of Appellate, Bankruptcy, Civil and Criminal Procedure Require Redaction of Personal Identification Information from Documents Filed with the Court

On December 1, 2007, the amendments to the Federal Rules of Appellate, Bankruptcy, Civil, and Criminal Procedure that implement the E-Government Act of 2002 became effective. The amendment to Appellate Rule 25, and new Bankruptcy Rule 9037, Civil Rule 5.2,…

The Biggest Data Disaster Ever

From The Red Tape Chronicles, Posted: Friday, November 30 at 05:15 am CT by Bob Sullivan: “It’s being called the worst data leak of the information age. Earlier this month, U.K. officials had to admit they’d lost hard drives containing…

Email Communications Between Physician and His Attorney Exchanged Over Hospital’s Email System Not Protected by Attorney-Client Privilege or Work Product Doctrine

Scott v. Beth Israel Med. Center Inc., 2007 WL 3053351 (N.Y. Sup. Ct. Oct. 17, 2007) Plaintiff is a physician who sued for breach of contract based upon his termination from defendant hospital (“BI”). Under the contract at issue, BI…

Inadequate Legal Hold Measures, and Resulting Spoliation, Warrant Sanctions

In re NTL, Inc. Sec. Litig., 2007 WL 241344 (S.D.N.Y. Jan. 30, 2007) In this opinion, Magistrate Judge Andrew J. Peck granted plaintiffs’ motion for sanctions in the form of an adverse inference instruction and awarded plaintiffs their costs and…

Court Allows Plaintiffs to Conduct Expedited Discovery Regarding Possible Spoliation

Roberts v. Canadian Pac. R.R. Ltd., 2007 WL 118901 (D. Minn. Jan. 11, 2007) In this decision, Chief District Judge James M. Rosenbaum granted plaintiff’s motion for leave to conduct limited discovery concerning spoliation of evidence on an expedited basis….

Condemning Defendant’s Gamesmanship, Court Orders Production of Database

JPMorgan Chase Bank, N.A. v. Neovi, Inc., 2006 WL 3803152 (S.D. Ohio Nov. 14, 2006) In this case involving UCC claims stemming from defendant’s internet-based check service, defendant disputed that it did sufficient business with Ohio residents to subject it…

Court Grants Plaintiff Access to Defendant’s Database

Bianchi v. The Bureaus, Inc., 2006 WL 3802758 (N.D. Ill. Nov. 1, 2006) In this brief order, the court granted plaintiff’s motion to allow her computer expert access a database maintained by defendant, for the purpose of determining whether the…

Citing Conference of Chief Justices’ Guidelines to State Courts, North Carolina Court Refuses to Compel Nonparty to Produce Deleted Emails from Backup Tapes

Bank of America Corp. v. SR Int’l Bus. Ins. Co., Ltd., 2006 WL 3093174, 2006 NCBC 15 (N.C. Super. Nov. 1, 2006) In its introductory remarks, the court advised: This opinion should be read in conjunction with the opinion in…

North Carolina Court Orders Production of Email from Backup Tapes; Parties to Share Restoration Costs Equally

Analog Devices, Inc. v. Michalski, 2006 WL 3287382 (N.C. Super. Nov. 1, 2006) (Unpublished) In this misappropriation of trade secrets case, defendants moved to compel the production of emails of the originators of the trade secrets at issue relating to…

North Carolina Court Relies on Conference of Chief Justices’ Guidelines in Two Decisions Involving the Production of Email from Backup Tapes

These two opinions, both filed on November 1, 2006, discuss for the first time the extent to which inaccessible electronic data is discoverable and who should pay for its production under the North Carolina Rules of Civil Procedure. Bank of…

$1.888 Million Judgment Entered in Favor of Bankruptcy Trustee Based on Adverse Party’s Spoliation of Financial Records

In re Quintus Corp., 353 B.R. 77 (Bankr. D. Del. 2006) Avaya, Inc. purchased the assets of the debtors in bankruptcy, and agreed to assume certain of the debtors’ liabilities. Thereafter, the trustee filed an adversary complaint against Avaya asserting…

Failure to Conduct Reasonable Investigation for Responsive Documents and Other Discovery Abuses Warrant Adverse Inference Instruction

3M Innovative Props. Co. v. Tomar Elecs., 2006 WL 2670038 (D. Minn. Sept. 18, 2006) In this patent infringement litigation, the district court judge affirmed the magistrate’s report and recommendation that plaintiff’s motion for sanctions against the defendant be granted…

Party Not Entitled to Shift Costs of Restoring Emails that were Converted to Inaccessible Format After Duty to Preserve was Triggered

Quinby v. WestLB AG, 2006 WL 2597900 (S.D.N.Y. Sept. 5, 2006) Like the plaintiff in the Zubulake v. UBS Warburg LLC, the plaintiff in this case was a highly-paid investment banker who accused her employer of gender discrimination and illegal…

Crime-Fraud Exception to Attorney-Client Privilege Invoked to Allow Testimony and Production of Notes by Attorney, Where Executive’s Deletion of Email Sought by Grand Jury Could Constitute Obstruction of Justice

In re Grand Jury Investigation, 445 F.3d 266 (3rd Cir. 2006) This opinion relates to an ongoing grand jury investigation of suspected federal criminal activity; because of the secrecy of the proceeding, the court’s opinion lacks specific details. The grand…

Second Circuit Reverses Frank Quattrone Conviction for Obstruction of Justice and Witness Tampering

In 2000, Credit Suisse First Boston Corporation (“CSFB”) employed Frank Quattrone as head of its Global Technology Group (the “Tech Group”). In that capacity, Quattrone managed approximately 400 technology investment bankers from the firm’s Palo Alto, California office. The Tech…

Florida Court Affirms $75,000 Coercive Civil Contempt Sanction Against Defendants For Prolonged Discovery Abuse

Channel Components, Inc. v. Am. II Electronics, Inc., 915 So. 2d 1278 (Fla. Dist. Ct. App. 2005) In this case alleging tortious interference and related claims against two former employees, the plaintiff sought intervention by the court several times in…

Defendant Sanctioned for Negligent Failure to Institute and Communicate Legal Hold

In re Old Banc One Shareholders Sec. Litig., 2005 WL 3372783 (N.D. Ill. Dec. 8, 2005) In this opinion, the District Court adopted in full the Magistrate’s Report and Recommendation regarding plaintiffs’ motion for sanctions based upon the defendant’s failure…

Bank of America Corporation Ordered to Provide Discovery on Behalf of Non-Party Wholly-Owned Subsidiaries

In re ATM Fee Antitrust Litig., 2005 WL 3299763 (N.D. Cal. Dec. 5, 2005) In this class action, plaintiffs propounded requests for production of documents and a request for admissions to all named defendants, including Bank of America Corporation (“BAC”)….

Despite Evidence of Intentional and Negligent Concealment, Bankruptcy Court Dismisses Trustee’s Spoliation of Evidence Counterclaims Because No Injury Was Shown

In re Tri-State Armored Services, Inc., 332 B.R. 690 (Bankr. D.N.J. 2005) Insurance company brought adversary proceeding against Chapter 7 trustee, seeking either equitable rescission of employee dishonesty, crime, and disappearance insurance policies issued to debtor armored car company, or…

Court Orders Production of Home Office Backup Tape Created in Connection with CFTC Receivership

Commodity Futures Trading Commission v. Equity Financial Group, LLC, et al., 2005 WL 2205789 (D.N.J. Sept. 9, 2005) In April 2004, the U.S. Commodity Futures Trading Commission (“CFTC”) filed an enforcement action against Equity Financial Group, LLC (“Equity”) and others…

UBS Securities to Pay $2.1 Million in Penalties and Fines for Failure to Preserve Email

On July 13, 2005 the Securities and Exchange Commission (“Commission”) issued an Order in connection with the alleged failure of UBS Securities LLC (“UBS”) to preserve email. The Commission accepted an Offer of Settlement and UBS consented to entry of…

Spoliation Instruction Appropriate where Defendants Failed to Preserve Email

Arndt v. First Union Nat’l Bank, 613 S.E.2d 274 (N.C. Ct.App. 2005) Donald Arndt (“Arndt”) was hired by First Union National Bank (“First Union”) in June 1996 with an initial salary of $90,000 per year and a guaranteed minimum incentive…

Seventh Circuit Reverses Sanction Requiring Production of Documents Listed on Privilege Log

American National Bank and Trust Co. of Chicago v. Equitable Life Assurance Society of the United States, 406 F.3d 867 (7th Cir. 2005) American National Bank and Trust Co. of Chicago, as Trustee f/b/o Emerald Investments LP, and Emerald Investments…

Privilege Not Necessarily Waived Where Email Between Employee and Personal Attorney Maintained on Corporate Email System

In re Asia Global Crossing, Ltd., 322 B.R. 247 (S.D.N.Y. 2005) Asia Global Crossing, Ltd. and Asia Global Crossing Development Co. (collectively “Asia Global”) were pan-Asian telecommunication carriers which filed for bankruptcy under Chapter 11 on November 17, 2002. Asia…

Magistrate Recommends Adverse Inference Instruction and Monetary Sanctions for Failure to Preserve Hard Drives, Audio Recordings and Email

E*Trade Securities LLC v. Deutsche Bank AG, et al., Civil No. 02-3711 RHK/AJB and Civil No. 02-3682 RHK/AJB (D. Minn. Feb. 17, 2005) United States Magistrate Judge Arthur J. Boylan filed a Report and Recommendation regarding several electronic discovery disputes…

Court Denies Motion to Compel Review of CD-ROMs for Responsive Documents

Zakre v. Norddeutsche Landesbank Girozentrale, 2004 WL 764895 (S.D.N.Y. Apr. 9, 2004) Plaintiff requested an order compelling defendant to review for responsive documents two compact discs containing some 204,000 emails. Defendant had conducted a review of the emails for privileged…

Court Precludes Offering of Evidence as Sanction for Discovery Evasion

In re LTV Steel Co., Inc., 307 B.R. 37 (N.D. Ohio 2004) In bankruptcy proceeding, a creditor (“C&K”) submitted a claim for $1.9 million against the estate, a portion of which the debtor agreed was due. When the debtor sought…

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Abigail C. Field: Our Government Blessed Foreclosure Fraud

Abigail C. Field: Our Government Blessed Foreclosure Fraud


Abigail C. Field-

The mortgage settlement signed by 49 states and every Federal law enforcer allows the rampant foreclosure fraud currently choking our courts to continue unabated. Yes, I realize the pretty language of Exhibit A promises the banks will completely overhaul their standard operating procedures and totally clean up their acts. Promises are empty if they’re not honored, and worthless if not enforceable.

We know Bailed-Out Bankers’ promises are empty, so what matters is if the agreement is enforceable. And when it comes to all things foreclosure fraud, the enforcement provisions are laughable. But before I detail why, let’s be clear: I’m not being hyperbolic. The bankers running and profiting most from our bailed-out banks are totally dishonest when dealing with the public, and their promises are meaningless.

To see their dishonesty in the mortgage context, read the complaint filed in the mortgage deal, or my take on it here. But the bankers don’t limit their lying, cheating and stealing to homeowners. They abuse their clients the same way. Most broadly damaging, the bankers steal from taxpayers on a federal, state and local level and practically everybody else too. Fraud is just how they do business. When dealing with bankers, you can’t do business on a handshake.

[REALITY CHECK]

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The Magic of the Mortgage Electronic Registration System: It Is and It Isn’t

The Magic of the Mortgage Electronic Registration System: It Is and It Isn’t


“Never imagine yourself not to be otherwise than what it might appear to others that what you were or might have been was not otherwise than what you had been would have appeared to them to be otherwise.”1

Excerpt:

While MERS may be named as the actual mortgagee
or its equivalent on the security instrument, in
substance its role is that of a nominee or agent.23
The language in the mortgage generally states:
“‘MERS’ is Mortgage Electronic Registration
Systems, Inc. MERS is a separate corporation that
is acting solely as nominee for Lender and
Lender’s successors and assigns. MERS is the
mortgagee under this Security Instrument.”24 Here
then begins the magic that is MERS—the dual claim
that it is both a principal (mortgagee) and
nominee/agent of the lender/factual mortgagee.25
MERS undertakes these roles but never lends
money and never gives value for the mortgage, nor
does it benefit from the proceeds of foreclosure
and/or collection actions.26 Were MERS’s
involvement in the mortgage market insignificant,
it might not pose much of a legal problem;however,
MERS appears to be involved in sixty
million loans—roughly half of all U.S. home
mortgages.27 The legal role MERS attempts to fill
and MERS’s argument as to standing is: 1) provide
a mortgage clearinghouse and eliminate recording
obligations by having MERS itself act as mortgagee
of record;28 2) allow the promissory note
evidencing the debt to be transferred freely among
MERS members ad infinitum; and 3) when default
occurs, act as the nominee of the current note
holder and mortgagee of record (rejoining the two
interests) even though the current “lender” did
not appoint MERS as mortgagee and may never have
had the right to do so. Ultimately, the argument
is something akin to a merger argument where MERS
claims that the severed interests, that of
security interest and note, are recombined in MERS
at a later date even though it received those
interests from separate entities. As others have
pointed out, MERS is attempting to derive powers
as an agent greater than the sum of the powers of
its principals.29

[ipaper docId=86987723 access_key=key-2k44k0z1xng0exhlu51n height=600 width=600 /]

 

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Foreclosure Deal Credits Banks for Routine Efforts – NYT

Foreclosure Deal Credits Banks for Routine Efforts – NYT


NYT-

In February, JPMorgan Chase donated a home to an Iraq war veteran in Bucoda, Wash., and Bank of America waived the $140,000 debt that a Florida man still owed after the sale of his foreclosed home. Over the last year, Wells Fargo has demolished about a dozen houses in Cleveland.

Banks do things like this — real estate transactions that do nothing to prevent foreclosure — all the time. But beginning this month, they can count such activities as part of their new commitment to help people stay in their homes.

 That commitment comes under the landmark $25 billion foreclosure abuse settlement between the government and five major banks announced last month. The settlement promises that of the $25 billion, the banks will give $17 billion “in assistance to borrowers who have the intent and ability to stay in their homes,” according to a summary of the settlement. But more than half of that money can be used in ways that will not stop foreclosures, including some activities that are already standard bank practices.

For example, the banks can wipe out more than $2 billion of their obligation by donating or demolishing abandoned houses. Almost $1 billion can be used to help families that have already defaulted move out.

[NEW YORK TIMES]

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Pool guy, landscaper of $18 million foreclosure winner subpoenaed

Pool guy, landscaper of $18 million foreclosure winner subpoenaed


“Hunger Games”

Palm Beach Post-

The pool guy, plumber and lawn man for a Palm Beach Gardens homeowner who recently won an $18 million settlement in a foreclosure-related lawsuit are being sought for questioning by the bank still seeking to repossess her home.

Lynn Szymoniak, a 63-year-old attorney who specializes in white collar crime, shot to national fame last year when she was featured on the CBS news show 60 minutes for her role in uncovering widespread mortgage and foreclosure fraud after finding it in her own 2008 case.

This month, it was announced she would receive $18 million from a whistle-blower lawsuit filed under the federal False Claims Act, which allows the government to bring civil actions against entities that knowingly use or cause the use of false documents to obtain money from the government.

[PALM BEACH POST]

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John Walsh: Foreclosure settlement, consent orders do not conflict

John Walsh: Foreclosure settlement, consent orders do not conflict


Lets not confuse the word “Flaw” with “Fraud”…There is a major difference!

HW-

John Walsh, acting Comptroller of the Currency, said the recent $25 billion mortgage servicing settlement reached between the big banks and state attorneys general does not conflict or double-up on requirements servicers have to follow in consent agreements banks signed with the OCC and other regulators last year. 

In 2010, regulators, including the OCC, examined 14 large federally regulated mortgage servicers and thrifts.

Last year, the agencies issued enforcement orders against all 14 institutions forcing them to take steps to review their foreclosure review processes and to offer aid to borrowers who suffered from flawed foreclosure practices.

[HOUSING WIRE]

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AGs to consider investor protections in foreclosure settlement

AGs to consider investor protections in foreclosure settlement


LOL…according to Tom Miller.

Good Luck!

HW-

If the top five mortgage servicers begin to abuse bond investors under the foreclosure settlement write-downs, the attorneys general would consider some protections, according to Iowa AG Tom Miller.

Miller faced down banking executives and analysts during a panel at the REthink Symposium Thursday. The $25 billion settlement signed in March forces servicers to meet roughly $10 billion in principal reductions, which could swell higher because in some instances the full dollar written down will not be credited.

Servicers will get full credit for reducing principal on loans they hold on their own portfolio but receive 45 cents for every dollar written down on mortgages held in private securities.

“To try principal reduction in a targeted way and find out if it works is good for the housing market,” Miller said. “We know what (the banks’) plans are. Two have said they wouldn’t do write-downs on private securities. But we could have some discussions about something to reassure investors.”

[HOUSING WIRE]

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Alternative to Foreclosure? Bank of America Program Allows Owners to Stay in Homes and Rent From the Bank

Alternative to Foreclosure? Bank of America Program Allows Owners to Stay in Homes and Rent From the Bank


WSJ-

Bank of America Corp. is launching a pilot program that will allow homeowners at risk of foreclosure to hand over deeds to their houses and sign leases that will let them rent the houses back from the bank at a market rate.

While the initial scope of the “Mortgage to Lease” program is small—the bank began sending letters Thursday offering leases to 1,000 homeowners in Arizona, Nevada and New York—it represents a big change in the way banks deal with borrowers who can’t afford their mortgages.

Until now, banks have focused the bulk of their borrower outreach on modifying mortgages, usually by reducing the monthly payments. When that doesn’t work, most foreclosure alternatives require homeowners to leave their house, typically through a short sale, in which the bank approves the sale for less than the amount owed. Banks often insert clauses forbidding the new owner from renting the property back to the former owner.

[WALL STREET JOURNAL]

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Opponents challenge Rep. Passidomo on foreclosure bill that would have hurt, detroy homeowners in Florida

Opponents challenge Rep. Passidomo on foreclosure bill that would have hurt, detroy homeowners in Florida


Naples Daily-

Political opponents of a Naples state legislator running for re-election have found ammunition in her fast-track foreclosure bill, which brewed statewide controversy before it died earlier this month.

Rep. Kathleen Passidomo, the Republican incumbent in the state House of Representatives, said she isn’t sure whether she will resurrect the bill in the 2013 legislative session. She first introduced the bill last year, but it failed then, too.

Now a Libertarian challenger, Peter Richter, is making it a campaign issue. He said the proposal, known as the Florida Fair Foreclosure Act, left discontent among homeowners he says would have been hurt by the measure.

“It died last year, as well, and every year this keeps coming back,” said Richter, 35, a Naples information technology consultant.

[NAPLES DAILY]

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Where are the Indictments?

Where are the Indictments?


Abigail C. Field-

Let’s be clear why there’s a mortgage deal: the banks broke the law. Several laws in fact, in ways that appear criminal as well as civil. Limiting their liability is the only reason the banks did a deal.

In this post I’m going to look at what the banks could be held liable for; how much liability “their” money persuaded law enforcers to ignore will be the next post. But one important kind of peace has not been bought: criminal. So as I detail the wrong doing exposed by the deal, I highlight the crimes our law enforcers seem to allege the bankers committed. After all, a liability release isn’t simply what it says, it’s what law enforcers do with their remaining freedom to act. If crimes were committed, and indictments don’t follow, the release is much broader than its text.

A close read of the complaint and the related language that precedes the releases (see Exhibits F and G) reveals:

continue reading [REALITY CHECK]

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