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Ka-Booom! Florida Clerk, Jim Fuller of Duval County Sues MERS

Ka-Booom! Florida Clerk, Jim Fuller of Duval County Sues MERS


This is major and pay close attention to the words below

Mortgage Servicing News-

The most recent lawsuit was filed by a county clerk in Florida, and seeks class action status to represent the state’s 67 counties. The complaint alleges the use of MERS does not comply with state property laws and has cost municipalities millions in unpaid recording fees.

Jim Fuller, the clerk of Duval County, filed suit against Merscorp Inc. and its wholly owned subsidiary, Mortgage Electronic Registration Systems, Inc., on Oct. 31, claiming civil conspiracy, unjust enrichment, as well as fraudulent and negligent misrepresentation. The suit also seeks a hearing to determine the validity of tracking note transfers on the MERS System and a court injunction to prohibit the use of MERS in Florida.

“MERS has usurped the rights and privileges of the Florida Clerks of Court by establishing, maintaining and inducing lenders to use its private recording system, which unlawfully interferes and competes with the public recording system,” the suit, filed in state circuit court, reads.

[…]

Both the note and mortgage are to be recorded. The principle issue we’re trying to get at is the punitive distinction of MERS being the mortgagee while the note is shifted from one to another up through the typical securitization process,” Volpe said in a phone interview. “The principle concern about the disconnect is that the public records are not complete insofar as the true beneficial owner of the mortgage is not reflected in the public records.”

[MORTGAGE SERVICING NEWS]

 

[ipaper docId=72570476 access_key=key-2j0q77ii32icyuhv6dnf height=600 width=600 /]

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The Emperor Has No Clothes

The Emperor Has No Clothes


A sweet piece from Fmr. U.S. Senator from Delaware Ted Kaufman-

Here’s the highlight of his HuffPo piece

Biden, Schneiderman and a few other AGs see it differently. They have been insisting on further investigations before any settlement is reached. The charges in Biden’s suit against MERS include a series of allegations based on his investigations to date. Among them:

• Hiding the true mortgage owner and removing that information from the public land records.

• Creating a systemically important, yet inherently unreliable, database that created confusion and inappropriate assignments and foreclosures of mortgages.

 • Failing to ensure the proper transfer of mortgage loan documentation to the securitization trusts, which may have resulted in the failure of securitizations to own the loans upon which they claimed to foreclose. (This is called “securities fail” and is the theory that allows put backs that crush the bank/originators.)

 • Initiating foreclosures in the name of MERS without authority to do so or without appropriate controls to ensure the actions were being carried out by the actual owner of the mortgage.

 • Allowing the entry and management of data by those MERS members who are identified as owners or servicers in the MERS System, instead of controlling entry and management itself.

 • Initiating foreclosure actions in which the real party in interest was hidden, thus preventing homeowners from ascertaining who owned their mortgage in order to challenge whether or not they had a right to foreclose and limiting their legal defenses.

 Again, stay tuned. Together, Judge Rakoff and Attorney General Biden are finally demanding much of the information we need to truly reform Wall Street.

 

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Bloomberg Blames Congress Not Wall Street For Mortgage Crisis [VIDEO]

Bloomberg Blames Congress Not Wall Street For Mortgage Crisis [VIDEO]


by

Mayor Michael Bloomberg blames congress and defends banks, over the mortgage crisis, during a November 1, 2011 breakfast in midtown.

But Who Created The Fraud? Who got paid to let Wall Street do what they so desired?

 

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Feds File Massive Fraud Case Against Allied Home Mortgage

Feds File Massive Fraud Case Against Allied Home Mortgage


by Tracy Weber and Charles Ornstein
ProPublica, Nov. 1, 2011, 5:51 p.m.

Federal prosecutors sued Allied Home Mortgage Capital Corp. and two top executives Tuesday, accusing them of running a massive fraud scheme that cost the government at least $834 million in insurance claims on defaulted home loans.

Houston-based Allied and its founder and chief executive, Jim Hodge, were the subject of July 2010 stories by ProPublica [1], which detailed a trail of alleged misconduct, lawsuits and government sanctions spanning at least 18 states [2] and seven years. Borrowers recounted how they had been lied to by Allied employees, who in some cases had siphoned the loan proceeds for personal gain. Some borrowers lost their homes.

Despite years of warnings, the federal government had not 2014 until this week 2014 impaired the company’s ability to issue new mortgages.

The suit [3], filed Tuesday in U.S. District Court in Manhattan, seeks triple damages and civil penalties, which could total $2.5 billion. Simultaneously, the U.S. Department of Housing and Urban Development suspended the company and Hodge from issuing loans [4] backed by the Federal Housing Administration. The company was also barred from issuing mortgage-backed securities through the Government National Mortgage Association (Ginnie Mae).

Allied has billed itself as the nation’s largest, privately held mortgage broker, with some 200 branches. (At one point, the company operated more than 600.) The sprawling network made Hodge a rich man [5] with properties in three states and St. Croix in the U.S. Virgin Islands and two airplanes to get to them.

Allied and Hodge played the “lending industry equivalent of heads-I-win and tails-you-lose,” U.S. Attorney Preet Bharara said at a news conference Tuesday. “The losers here were American taxpayers and the thousands of families who faced foreclosure because they could not ultimately fulfill their obligations on mortgages that were doomed to fail.”

The government’s complaint alleges that between 2001 and 2010, Allied originated 112,324 home mortgages backed by the FHA, which typically go to moderate- and low-income borrowers. Of those, nearly 32 percent 2014 35,801 2014 defaulted, resulting in more than $834 million in insurance claims paid by HUD.

In 2006 and 2007, the company’s default rate was a “staggering” 55 percent, the complaint said.

In addition, another 2,509 mortgages are currently in default, which could result in another $363 million in insurance claims paid by HUD.

Borrowers told ProPublica last year that company employees falsified records to bolster their credit worthiness and lured them into unaffordable deals by lying about the terms.

The government’s complaint says: “Allied has profited for years as one of the nation’s largest FHA lenders by engaging in reckless mortgage lending, flouting the requirements of the FHA mortgage insurance program and repeatedly lying about its compliance.”

Tuesday’s action against Allied follows criticism that the government has been slow to act on rampant fraud and abuse in the mortgage market. In the case of Allied, the government had reams of evidence of possible misconduct. Among ProPublica’s findings last year:

  • Allied had the highest serious delinquency rate [6] among the top 20 FHA loan originators from June 2008 through May 2010.
  • Nine states had sanctioned the firm from 2009 to mid-2010 for such violations as using unlicensed brokers and misleading a borrower.
  • Federal agencies had cited or settled with Allied or an affiliate at least six times since 2003 for overcharging clients, underpaying workers or other offenses.
  • At least five lenders had sued, claiming Allied tricked them into funding loans for unqualified buyers by falsifying documents and submitting grossly inflated appraisals, among other allegations.

Allied spokesman Joe James said the company was aware of the government lawsuit but had not received a copy of it and could not comment.

Hodge did not return a phone call and email message seeking comment. But last year, he told ProPublica that the problems experienced at some of Allied’s branches should not tarnish his firm’s overall record. “If you look at the volume that we did or do,” he said, “it’s not significant.”

In an interview Tuesday, Helen Kanovsky, HUD’s general counsel, defended the time it took her department to take action.

“We had tried sanctions before,” she said. “We had assessed civil monetary penalties, and that had not worked.

“The extraordinary remedy that we have 2014 to be able to terminate somebody’s FHA capacity [and] basically put them out of business 2014 requires a very high level of evidence and a high level of proof.”

The government’s 41-page lawsuit details an alleged scheme by Allied to deceive HUD about its employees and the risks associated with its loans. For years, it operated a network of “shadow” branches that were not approved by HUD and falsely certified that they met legal requirements.

Allied also disguised the high default rates of some branches, the complaint alleges, by tinkering with their addresses to apply for new HUD identification codes for the same offices. When HUD updated its system to prevent such manipulation, Allied simply moved all of its branches to a sister company and obtained new IDs, “thus again achieving a clean slate on its default rates,” the suit said. The sister firm, Allied Home Mortgage Corp., is also named as a defendant.

Hodge created a “culture of corruption,” the suit said. He “intimidated employees by spontaneous terminations and aggressive email monitoring, and silenced former employees by actual and threatened litigation against them.”

In one case, Hodge instructed his chief information officer to capture the password for the personal email account of Jeanne Stell, the company’s executive vice president and compliance officer. Then he installed an electronic listening device under the information officer’s desk, the complaint alleges.

Allied also was employing felons, including a state manager who had been sentenced to 60 months in prison for distributing methamphetamine, as well as a branch manager running the office under a false name, the suit said.

The government joined a whistleblower lawsuit filed by a former Allied branch manager in Massachusetts, Peter Belli. In addition to Allied and Hodge, the suit also names Stell as a defendant.

Belli had filed other suits against Hodge and Allied. He said Tuesday that, while his legal pursuit of his former employer has been long and hard, “I never really ever felt like quitting because I was married to the cause.”

Allied is also facing at least one federal criminal investigation into its now-shuttered Hammond, La., branch. In multiple lawsuits, borrowers allege that the office deceived them from 2005 through 2007 by misrepresenting loan terms, falsifying records, failing to pay off prior mortgages and diverting hundreds of thousands of dollars.

At his news conference, Bharara said Tuesday’s filing was a civil matter and that the investigation into Allied is continuing. “We will go wherever the facts lead us.”

 

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Ranking Member Cummings Addresses New GAO Report on AIG Bailout

Ranking Member Cummings Addresses New GAO Report on AIG Bailout


Washington, DC—Ranking Member Elijah E. Cummings issued the following statement on a new GAO report issued regarding AIG. The report found inconsistent accounts of attempts by the Federal Reserve Bank of New York to negotiate with AIG’s counterparties to lower U.S. taxpayer exposure.

“GAO’s report cries out for the full and immediate implementation of the Dodd-Frank Act. As distasteful as the AIG bailout was, the systemic risk posed by AIG to the domestic and international economies was real, and cannot be overstated. This report reinforces the need to implement provisions in Dodd-Frank that will prohibit the use of tax-payer dollars to artificially prop up or benefit one firm, and ensure that massive, nonbank companies cannot engage in financial transactions that put our nation’s economy at risk again.”

Cummings was one of the Members of Congress who asked GAO to examine the decision to provide AIG with taxpayer funds. The report echoes the findings of investigations conducted, at Cummings’s request, by the House Oversight and Government Reform Committee and the Special Inspector General for the Troubled Assets Relief Program (SIGTARP) which found clear shortfalls in the Federal Reserve Bank of New York’s negotiations with AIG counterparties regarding the payments they would receive for credit default swap contracts they held.

Highlights of the GAO report include the following:

  •        “The possibility of AIG’s failure drove Federal Reserve aid after private financing failed.”
  •        “[Federal Reserve Bank of New York’s] Maiden Lane III design likely required greater borrowing, and accounts of attempts to gain concessions from AIG counterparties are inconsistent.”
  •        “The Federal Reserve’s actions were generally consistent with existing laws and policies, but they raised a number of questions.”
  •        “Initial Federal Reserve lending terms were designed to be more onerous than private sector financing.”
  •        “The AIG crisis offers lessons that could improve ongoing regulation and responses to future crises.”

[ipaper docId=71150009 access_key=key-1wi59nkni374d1nq7v93 height=600 width=600 /]

 

 

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Financial Crisis: Review of Federal Reserve System Financial Assistance to American International Group, Inc.

Financial Crisis: Review of Federal Reserve System Financial Assistance to American International Group, Inc.


Summary

In September 2008, the Board of Governors of the Federal Reserve System (Federal Reserve Board) approved emergency lending to American International Group, Inc. (AIG)–the first in a series of actions that, together with the Department of the Treasury, authorized $182.3 billion in federal aid to assist the company. Federal Reserve System officials said that their goal was to avert a disorderly failure of AIG, which they believed would have posed systemic risk to the financial system. But these actions were controversial, raising questions about government intervention in the private marketplace. This report discusses (1) key decisions to provide aid to AIG; (2) decisions involving the Maiden Lane III (ML III) special purpose vehicle (SPV), which was a central part of providing assistance to the company; (3) the extent to which actions were consistent with relevant law or policy; and (4) lessons learned from the AIG assistance. To address these issues, GAO focused on the initial assistance to AIG and subsequent creation of ML III. GAO examined a large volume of AIG-related documents, primarily from the Federal Reserve System–the Federal Reserve Board and the Federal Reserve Bank of New York (FRBNY)–and conducted a wide range of interviews, including with Federal Reserve System staff, FRBNY advisors, former and current AIG executives, AIG business counterparties, credit rating agencies, potential private financiers, academics, finance experts, state insurance officials, and Securities and Exchange Commission (SEC) officials. Although GAO makes no new recommendations in this report, it reiterates previous recommendations aimed at improving the Federal Reserve System’s documentation standards and conflict-of-interest policies.

While warning signs of the company’s difficulties had begun to appear a year before the Federal Reserve System provided assistance, Federal Reserve System officials said they became acutely aware of AIG’s deteriorating condition in September 2008. The Federal Reserve System received information through its financial markets monitoring and ultimately intervened as the possibility of bankruptcy became imminent. Efforts by AIG and the Federal Reserve System to secure private financing failed after the extent of AIG’s liquidity needs became clearer. Both the Federal Reserve System and AIG considered bankruptcy issues, although no bankruptcy filing was made. Due to AIG’s deteriorating condition in September 2008, the Federal Reserve System said it had little opportunity to consider alternatives before its initial assistance. As AIG’s troubles persisted, the company and the Federal Reserve System considered a range of options, including guarantees, accelerated asset sales, and nationalization. According to Federal Reserve System officials, AIG’s credit ratings were a critical consideration in the assistance, as downgrades would have further strained AIG’s liquidity position. After the initial federal assistance, ML III became a key part of the Federal Reserve System’s continuing efforts to stabilize AIG. With ML III, FRBNY loaned funds to an SPV established to buy collateralized debt obligations (CDO) from AIG counterparties that had purchased credit default swaps from AIG to protect the value of those assets. In exchange, the counterparties agreed to terminate the credit default swaps, which were a significant source of AIG’s liquidity problems. As the value of the CDO assets, or the condition of AIG itself, declined, AIG was required to provide additional collateral to its counterparties. In designing ML III, FRBNY said that it chose the only option available given constraints at the time, deciding against plans that could have reduced the size of its lending or increased the loan’s security. Although the Federal Reserve Board approved ML III with an expectation that concessions would be negotiated with AIG’s counterparties, FRBNY made varying attempts to obtain these discounts. FRBNY officials said that they had little bargaining power in seeking concessions and would have faced difficulty in getting all counterparties to agree to a discount. While FRBNY took actions to treat the counterparties alike, the perceived value of ML III participation likely varied by the size of a counterparty’s exposure to AIG or its method of managing risk. While the Federal Reserve Board exercised broad emergency lending authority to assist AIG, it was not required to, nor did it, fully document its interpretation of its authority or the basis of its decisions. For federal securities filings AIG was required to make, FRBNY influenced the company’s filings about federal aid but did not direct AIG on what information to disclose. In providing aid to AIG, FRBNY implemented conflict-of-interest procedures, and granted a number of waivers, many of which were conditioned on the separation of employees and information. A series of complex relationships grew out of the government’s intervention, involving FRBNY advisors, AIG counterparties, and others, which could expose FRBNY to greater risk that it would not fully identify and appropriately manage conflict issues and relationships.

[ipaper docId=71149053 access_key=key-l15eo6l9mnzfzcml7hq height=600 width=600 /]

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Not with a Bang, but a Whimper: Bank of America’s Death Rattle – By William K. Black

Not with a Bang, but a Whimper: Bank of America’s Death Rattle – By William K. Black


Economic Perspectives-

Bob Ivry, Hugh Son and Christine Harper have written an article that needs to be read by everyone interested in the financial crisis. The article (available here) is entitled: BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit. The thrust of their story is that Bank of America’s holding company, BAC, has directed the transfer of a large number of troubled financial derivatives from its Merrill Lynch subsidiary to the federally insured bank Bank of America (BofA). The story reports that the Federal Reserve supported the transfer and the Federal Deposit Insurance Corporation (FDIC) opposed it. Yves Smith of Naked Capitalism has written an appropriately blistering attack on this outrageous action, which puts the public at substantially increased risk of loss.

I write to add some context, point out additional areas of inappropriate actions, and add a regulatory perspective gained from dealing with analogous efforts by holding companies to foist dangerous affiliate transactions on insured depositories. I’ll begin by adding some historical context to explain how B of A got into this maze of affiliate conflicts.

[Economic Perspectives]

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BofA May Face HUD Fraud Claims for Soured Loans, Read REPORT

BofA May Face HUD Fraud Claims for Soured Loans, Read REPORT


What will happen to Angelo Mozilo?

AG’s have no idea what they are allowing to proceed in the courts, I urge them to Halt, Seize, Stop these illegal foreclosures. Bank of America is in a mad rush to get these through the court systems. Pages are missing from the filed documents to further hide the endorsed pages.

Whistle-blowers best you blow the “whistle” now!

AP-

Bank of America Corp. (BAC) should face fraud proceedings after its Countrywide unit submitted faulty data to back up claims for reimbursement on federally insured mortgages, according to an audit by a U.S. watchdog.

Half of 14 loans reviewed had “material underwriting deficiencies” concerning borrowers that resulted in more than $720,000 in losses, according to a Sept. 30 report from the Department of Housing and Urban Development’s inspector general. Kelly Anderson, a HUD regional inspector general, recommended the agency pursue legal remedies against Charlotte, North Carolina-based Bank of America, the biggest U.S. lender.

“Countrywide did not properly verify, analyze, or support borrowers’ employment and income, source of funds to close, liabilities and credit information,” Kelly wrote in the audit. “This noncompliance occurred because Countrywide’s underwriters did not exercise due diligence in underwriting the loans.”

The Federal Housing Administration, run by HUD, insures mortgages on loans to borrowers who can’t find traditional financing, such as those with low incomes. Lenders can ask the FHA to cover losses if borrowers default. The agency has stepped up scrutiny of those claims, and denials could be the next wave of expenses tied to faulty mortgages for lenders including Bank of America, FBR Capital Markets Corp. said on Oct. 3

[BLOOMBERG]

 

 

COUNTRYWIDE DID NOT COMPLY WITH HUD REPORT

 

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Whistleblower Suit alleges banks and mortgage companies cheated veterans and U.S. taxpayers

Whistleblower Suit alleges banks and mortgage companies cheated veterans and U.S. taxpayers


Seriously, when is enough really enough with these banks?

WaPO-

Some of the nation’s biggest banks and mortgage companies have defrauded veterans and taxpayers out of hundreds of millions of dollars by disguising illegal fees in veterans’ home refinancing loans, according to a whistleblower suit unsealed in federal court in Atlanta.

The suit accuses the companies, including Wells Fargo, Bank of America, J.P. Morgan Chase and GMAC Mortgage, of engaging in “a brazen scheme to defraud both our nation’s veterans and the United States treasury” of millions of dollars in connection with home loans guaranteed by the Department of Veterans Affairs.

“This is a massive fraud on the American taxpayers and American veterans,” James E. Butler Jr., one of the lawyers bringing the suit, said Tuesday.

[WASHINGTON POST]

[ipaper docId=67526742 access_key=key-w80spahtz1zyelupsdi height=600 width=600 /]

 

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Breaking: The New York attorney general is suing Bank of New York Mellon, alleging fraud in currency transactions

Breaking: The New York attorney general is suing Bank of New York Mellon, alleging fraud in currency transactions


WSJ-

New York’s attorney general sued Bank of New York Mellon Corp. in state court Tuesday, alleging that one of the world’s largest custody banks defrauded pension funds when it improperly charged for currency transactions.

In a civil complaint, New York Attorney General Eric Schneiderman says he is seeking nearly $2 billion—the amount that the bank had generated in profits in the alleged scheme.

The lawsuit is the latest legal threat to hit BNY Mellon over how it processed currency transactions. In August, attorneys general in Virginia and Florida sued the bank in legal claims that also allege improper pricing for currency transactions.

In the complaint, Mr. Schneiderman alleges that the bank fraudulently charged clients for …

[WALL STREET JOURNAL]

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Iowa Class Action Against CitiMortgage “agressively and falsely advertised its commitment to help homeowners obtain affordable loan modifications.”

Iowa Class Action Against CitiMortgage “agressively and falsely advertised its commitment to help homeowners obtain affordable loan modifications.”


H/T   Adam Belz

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF IOWA
CENTRAL DIVISION

KEITH GOODYK, on behalf of himself and all
others similarly situated,
Plaintiff,

V.

CITIMORTGAGE, INC.,
Defendant.

[ipaper docId=66714314 access_key=key-ubxfb2g3pval653h78z height=600 width=600 /]

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Deloitte & Touche Sued for $7.6 Billion in Collapse of Lender Taylor Bean

Deloitte & Touche Sued for $7.6 Billion in Collapse of Lender Taylor Bean


It’s all of the banks. They did not accumulate wealth because they were honest. It’s all of them!

 Bloomberg-

Deloitte & Touche LLP, one of the so-called Big Four accounting firms, was sued for failing to detect a fraud that allegedly led to more than $7 billion in losses at defunct mortgage lender Taylor, Bean & Whitaker Mortgage Corp.

Deloitte, which audited Taylor Bean’s financial statements from 2002 to August 2009, ignored red flags in the company’s books, allowing the lender’s former chairman Lee Farkas to orchestrate a fraud that toppled the company, according to the complaints filed today in state court in Miami. Taylor Bean’s bankruptcy trustee, Neil Luria, and its Ocala Funding unit are seeking more than $7.6 billion in damages.

[BLOOMBERG]

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OPINION: In Re: WASHINGTON MUTUAL, INC., Bankruptcy Judge Denies Reorganization Plan

OPINION: In Re: WASHINGTON MUTUAL, INC., Bankruptcy Judge Denies Reorganization Plan


THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

In re:

WASHINGTON MUTUAL, INC., et al.,

OPINION1

Before the Court is the request of Washington Mutual, Inc. (“WMI”) and WMI Investment Corp. (collectively the “Debtors”) for confirmation of the Modified Sixth Amended Joint Plan of Affiliated Debtors (the “Modified Plan”). For the reasons stated below, the Court will deny confirmation of the Modified Plan.

[…]

[ipaper docId=65005674 access_key=key-12ublt66lyyiduhx6y0j height=600 width=600 /]

 

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SEC Bans Document Destruction After Whistleblower Cries Foul

SEC Bans Document Destruction After Whistleblower Cries Foul


Massive Collateral Damage has been done and in the age of having files held in electronic data, this is very disturbing.

Executive Gov-

The Securities and Exchange Commission has forbidden its employees from destroying investigative documents, as fallout spreads from a whistleblower’s recent claim that the agency has illegally destroyed thousands of preliminary investigation documents.

An SEC attorney alerted Sen. Chuck Grassley (R-Iowa) of the possible crimes in August. The whistleblower said the documents in question were “matters under inquiry,” including reviews of AIG, Morgan Stanley, Lehman Brothers and Bernie Madoff.

[EXECUTIVE GOV]

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One More Reason to Shut the SEC and Start Over: William D. Cohan

One More Reason to Shut the SEC and Start Over: William D. Cohan


Bloomberg-

Thanks to Darcy Flynn, a longtime attorney at the Securities and Exchange Commission, we now have all the ammunition we need to do what should have been done years ago: terminate the SEC, with extreme prejudice, and in its place construct a new regulatory watchdog for Wall Street free of obvious conflicts of interest.

Flynn’s courage has almost been lost in all the recent apocalyptic talk of earthquakes and hurricanes, but a few weeks back he did something remarkable. After raising concerns internally at the SEC last year — and getting nowhere — Flynn went public and alleged in a formal whistleblower complaint that for at least 17 years the SEC “followed a policy of systematically destroying documents” related to what are known as Matters Under Investigation, or MUIs, most of which were focused on possibly illicit or illegal behavior at Wall Street firms. MUIs are the first step in investigating a case that may lead to a formal SEC inquiry.

[BLOOMBERG]

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The Rescue That Missed Main Street – Gretchen Morgenson

The Rescue That Missed Main Street – Gretchen Morgenson


But NOT Wall Street

Fair Game-

FOR the last three years we have been told repeatedly by government officials that funneling hundreds of billions of dollars to large and teetering banks during the credit crisis was necessary to save the financial system, and beneficial to Main Street.

But this has been a hard sell to an increasingly skeptical public. As Henry M. Paulson Jr., the former Treasury secretary, told the Financial Crisis Inquiry Commission back in May 2010, “I was never able to explain to the American people in a way in which they understood it why these rescues were for them and for their benefit, not for Wall Street.”

The American people were right to question Mr. Paulson’s pitch, as it turns out. And that became clearer than ever last week when Bloomberg News published fresh and disturbing details about the crisis-era bailouts.

[NEW YORK TIMES]

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Document Shredding: Why SEC’s Defense Won’t Fly

Document Shredding: Why SEC’s Defense Won’t Fly


MATT TAIBBI-

Just a quick note about the “Shredded Justice” story, as I’ve had a couple of questions about some of the SEC’s responses to the story.

Several readers pointed to this story in which SEC spokesman John Nester said this:

“We do keep records of our MUI’s and they’re available to our investigators to learn about previous work on matters that have been reviewed.”

[ROLLINGSTONE]

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MOODY’S ANALYST Says Ratings Agency Rotten To Core W/ Conflicts, Corruption, And Greed

MOODY’S ANALYST Says Ratings Agency Rotten To Core W/ Conflicts, Corruption, And Greed


Rabbit hole is getting deeper and deeper each day.

1999, Oh yes, MOODY’S “issued” an “independent” Structured Report entitled “Mortgage Electronic Registration Systems, Inc. (MERS): Its Impact on The Credit Quality of FirstMortgage Jumbo Transactions.

This just fits right along with all the pieces to this article.

Business Insider-

A former senior analyst at Moody’s has gone public with his story of how one of the country’s most important rating agencies is corrupted to the core.

The analyst, William J. Harrington, was employed by Moody’s for 11 years, from 1999 until his resignation in 2010.

From 2006 to 2010, Harrington was a Senior Vice President in the derivative products group, which was responsible for producing many of the disastrous ratings Moody’s issued during the housing bubble.

Harrington has made his story public in the form of a 78-page “comment” to the SEC’s proposed rules about rating agency reform, which he submitted to the agency on August 8th. The comment is a scathing indictment of Moody’s processes, conflicts of interests, and management, and it will likely make Harrington a star witness at any future litigation or hearings on this topic.

[ipaper docId=62691753 access_key=key-1w2ajoi700m733mgub1k height=600 width=600 /]

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MATT TAIBBI: Is the SEC Covering Up Wall Street Crimes?

MATT TAIBBI: Is the SEC Covering Up Wall Street Crimes?


A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation’s worst financial criminals.

Rollingstone-

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – “Hey, chief, didja know this guy had two wives die falling down the stairs?” No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

[ROLLINGSTONE]

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LETTER | SEC Destroys Over 9,000 Fraud Documents Involving Goldman Sachs, Madoff, Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Lehman, Morgan Stanley, Wells Fargo

LETTER | SEC Destroys Over 9,000 Fraud Documents Involving Goldman Sachs, Madoff, Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Lehman, Morgan Stanley, Wells Fargo


Market Watch-

WASHINGTON (MarketWatch) — The Securities and Exchange Commission may have destroyed documents and compromised enforcement cases involving activity at large banks and hedge funds during the height of the financial crisis in 2008, according to allegations made by a lawmaker on Wednesday.

[MARKET WATCH]

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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Stern insurer wants out of policy, says it doesn’t cover claims involving “fraud”

Stern insurer wants out of policy, says it doesn’t cover claims involving “fraud”


Oh it’s getting hard to escape this word connected to Mr. Stern. Just last month GMAC dropped a bombshell of it’s own in case you missed it.

Kim Miller-

An insurer for former foreclosure giant David J. Stern wants out of its policy, saying in a lawsuit that the company doesn’t cover “claims based upon, arising out of, directly or indirectly resulting from or in consequence of, or in any way involving a dishonest, fraudulent, criminal, or malicious act or omission.”

Admiral Insurance Company filed a lawsuit Thursday in the United States District Court, Southern District of Florida, saying it shouldn’t be responsible for defense expenses in two class-action claims filed against Stern in Palm Beach County. Stern had a $3 million policy with Admiral that expired last year.

[PALM BEACH POST]

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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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OVERVIEW OF ATTORNEY GENERAL MARTHA COAKLEY’S INITIATIVE TO COMBAT THE SUBPRIME LENDING CRISIS

OVERVIEW OF ATTORNEY GENERAL MARTHA COAKLEY’S INITIATIVE TO COMBAT THE SUBPRIME LENDING CRISIS


THE COMMONWEALTH OF MASSACHUSETTS
OFFICE OF THE ATTORNEY GENERAL
ONE ASHBURTON PLACE
BOSTON, MASSACHUSETTS 02108

617) 727-2200
(617) 727-4765 TTY
www.mass.gov/ago

OVERVIEW OF ATTORNEY GENERAL MARTHA COAKLEY’S INITIATIVE TO COMBAT THE SUBPRIME LENDING CRISIS

During the Economic Crisis, AG Coakley’s Office has secured more than $563 million in relief for investors and borrowers, recovered nearly $52 million in taxpayer funds to the Commonwealth and ensures mortgage relief to more than 24,700 homeowners in Massachusetts

  • In August 2011, Attorney General Coakley settled her office’s 2008 enforcement action against Option One Mortgage Corp., a subsidiary of H&R Block, which alleged predatory lending and discriminatory lending. The settlement provides a loan modification program for certain ultra-risky loans, which will provide an estimated $115 million in value to Massachusetts borrowers in principal write-downs and reduced monthly payments. Coakley also obtained a $9.8 million payment for restitution and the Commonwealth’s litigation costs.
  • In June 2010, Attorney General Coakley’s Office reached a $102 million settlement with Morgan Stanley over its role in financing and securitizing subprime loans, which contributed to the housing crash in Massachusetts.
  • In March 2010, Attorney General Coakley’s office secured $3 billion in loan modifications for homeowners nationwide with Countrywide Financial Corporation. The agreement secured an estimated $18 million in loan modifications for Massachusetts homeowners, $3 billion in loan modifications for homeowners across the country, and a $4.1 million payment to the Commonwealth. Countrywide is now owned by Bank of America.
  • In February 2010, Attorney General Coakley’s office, together with the SEC, reached a $310 million settlement with State Street Bank to resolve allegations that the financial giant misled fund investors, including numerous Massachusetts charities and retirement funds, regarding the extent of the funds’ subprime exposure.
  • In June 2009, Attorney General Coakley’s office reached a $10 million settlement with Fremont Investment & Loan and Fremont General Corporation in which Fremont resolved claims that it wrote 15,000 Massachusetts mortgages that were considered “doomed to foreclosure.” The agreement also secured an injunction affording state officials the opportunity to review any of Fremont’s 2,200 remaining Massachusetts mortgages before the initiation of foreclosure proceedings.
  • In May 2009, Attorney General Coakley’s office reached a first-in-the-nation $60 million settlement with Goldman Sachs in which the company agreed to provide loan restructuring for over 700 Massachusetts homeowners.
  • During 2008, the Attorney General’s Office recovered more than $77 million for Massachusetts cities, towns, and other government entities under the state’s civil False Claims Act in connection with misleading and unlawful investment marketing to local governments. These recoveries included settlements with investment banks Merrill Lynch, UBS, Morgan Stanley & Company, and Citibank.
  • The Attorney General’s Office has also brought civil and criminal actions against local lenders and brokers who engaged in fraudulent lending activity, or who perpetrated foreclosure rescue or loan modification scams.

In addition to the enforcement component of her initiative, Attorney General Coakley has also taken regulatory and legislative action to address predatory lending:

  • In January 2008, the Attorney General’s Office implemented new consumer protection regulations governing mortgage brokers and lenders.
  • In June 2007, the office enacted emergency Consumer Protection Act regulations which barred “foreclosure rescue transactions” to protect homeowners from losing their homes in these scams.
  • In October 2007, Attorney General Coakley testified before the U.S. House of Representatives Committee on Financial Services about racial and ethnic disparities in mortgage lending:
  • Attorney General Coakley, State Senator Karen Spilka, and State Representative Steven Walsh sponsored state legislation which requires that creditors take reasonable steps to avoid foreclosure and prohibits foreclosures without appropriate documentation. The legislation will also prevent additional foreclosures by mandating loan modifications in certain circumstances.

[ipaper docId=62010419 access_key=key-11f7cgfh31rjeg8kjfa0 height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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