Lawsuit | FORECLOSURE FRAUD | by DinSFLA - Part 2

Tag Archive | "lawsuit"

LETTER: Attorney General Martha Coakley urges Congress to investigate Ally, GMAC

LETTER: Attorney General Martha Coakley urges Congress to investigate Ally, GMAC


THE COMMONWEALTH OF MASSACHUSETTS
OFFICE OF THE ATTORNEY GENERAL
ONE ASHBURTON PLACE
BOSTON, MASSACHUSETTS 02108
MARTHA COAKLEY
ATTORNEY GENERAL
(617) 727-2200
www.mass.gov/ago

December 6, 2011
The Honorable Tim Johnson
Chairman

U.S. Senate Committee on Banking, Housing, and Urban Affairs
534 Dirksen Senate Office Building
Washington, D.C. 20510

The Honorable Spencer Bachus
Chairman
U.S. House Committee on Financial Services
2129 Rayburn House Office Building
Washington, DC 20515

Re: Ally Financial; GMAC Foreclosure Behavior

I am writing regarding what we believe is serious misconduct committed by Ally
Financial, through its subsidiary GMAC Mortgage, against homeowners in
Massachusetts.

Last week, our office filed a lawsuit against Ally and four national banks for
pursuing illegal foreclosures and deceptive loan servicing. Ally and other banks charted
a destructive path by cutting corners and rushing to foreclose on homeowners without
following the rule of law, which has exacerbated the nation’s foreclosure crisis.
In light of Ally’s alleged deceptive and illegal actions against homeowners in
Massachusetts and across the country, I respectfully request that your committees
investigate Ally’s serious misconduct and consider what actions the federal government
can take to ensure that Ally adheres to the law.

[…]

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Foreclosure Fraud Expert Marie McDonnell Commends Attorney General Martha Coakley’s Lawsuit Against Banks and MERS

Foreclosure Fraud Expert Marie McDonnell Commends Attorney General Martha Coakley’s Lawsuit Against Banks and MERS


Marie McDonnell, President of McDonnell Property Analytics, Inc., and a pioneer in exposing fraudulent and illegal practices in the mortgage industry through her forensic audits, today commends Attorney General Martha Coakley and her staff for filing a comprehensive lawsuit against Bank of America Corp., Wells Fargo & Co., J.P. Morgan Chase & Co., Citigroup, Ally Financial Inc., MERS and MERSCORP, Inc.

“Today, AG Coakley took strong and decisive action to enforce the rule of law and obtain meaningful
relief for Massachusetts consumers. As someone who has worked extensively with homeowners who
have faced the threat of foreclosure due to unforeseen circumstances such as illness and job loss, or
because they were intentionally victimized by these banks for profit motives, I feel it is imperative that
the banks be held responsible for the damage they have caused to people’s lives, their communities and
the Commonwealth at large. I applaud AG Coakley for having the courage to stand up to these rogues
and hold them accountable for what they have done, and I look forward to the relief and restitution that
this will bring families moving forward.”

McDonnell was tapped by John O’Brien, Register of the Essex Southern District Registry of Deeds in
Salem, to perform an in-depth forensic examination of assignments of mortgage recorded during 2010
to and from JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Bank of America, N.A. to test the
transparency and integrity of his registry. The audit gained national attention and uncovered massive
fraud and defects in title, such as:

  • · Only 16% of all mortgage assignments examined are valid
  • · 75% of all assignments examined are invalid and 8.7% are questionable
  • · 27% of the invalid assignments are fraudulent, 35% are “robo-signed” and 10% violate the

Massachusetts Mortgage Fraud Statute.

  • · 683 assignments are missing, translating to approximately $180,000 in lost recording fees per

1,000 mortgages whose current ownership can be traced.

The audit also revealed the pervasive role of MERS in the mortgage industry:

  • · 46% of mortgages are MERS registered
  • · 47% are owned by Government Sponsored Enterprises (Fannie Mae, Freddie Mac, Ginnie Mae)
  • · Typically ownership of these mortgages is obscure

One little-known fact revealed by McDonnell’s audit is that when JPMorgan Chase Bank, N.A., Wells
Fargo Bank, N.A. and Bank of America, N.A. issue mortgage loans directly to consumers, they do not
register them into the MERS System. McDonnell also found that these banks do not record interim
assignments of mortgage and are in large part responsible for corrupting the chain of title in John
O’Brien’s registry.

McDonnell’s audit supports Attorney General Coakley’s allegations that these banks committed unlawful
foreclosures and engaged in deceptive practices.

McDonnell Property Analytics has and will continue to assist individual homeowners facing foreclosure
and the attorneys who represent them.

[ipaper docId=74648926 access_key=key-hy53up5vs4or89m2vcw height=600 width=600 /]

 

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CAPITAL STRIKE! GMAC stops mortgage lending in MA in response to AG lawsuit

CAPITAL STRIKE! GMAC stops mortgage lending in MA in response to AG lawsuit


SO WHAT WHO CARES… There are credit unions!

Mass AG: “In this state, banks must follow laws. It appears GMAC acknowledges it has a problem following those laws & being held accountable.”

WSJ-

GMAC Mortgage, the mortgage lender of Ally Financial Inc., is exiting the vast majority of its lending in Massachusetts a day after the state sued it over its foreclosure practices.

The nation’s fifth-largest mortgage originator said it “has taken this action because recent developments have led mortgage lending in Massachusetts to no longer be viable,” ratcheting up the high-stakes mortgage fight there.

Attorney General Martha Coakley sued the five biggest mortgage servicers Thursday, in the first government lawsuit targeting all five for alleged improper foreclosure practices including so-called robo-signing. The practice involves people who allegedly signed many foreclosure documents …

[WALL STREET JOURNAL]

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MA Attorney General Martha Coakley & Reg. Of Deeds John O’Brien on NBC Nightly News w/ Brian Williams [VIDEO]

MA Attorney General Martha Coakley & Reg. Of Deeds John O’Brien on NBC Nightly News w/ Brian Williams [VIDEO]


“The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis,” said AG Coakley.  “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law. Our action today seeks real accountability for the banks illegal behavior and real relief for homeowners.”

 

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Massachusetts AG Coakley Takes on the Banks | Abigail C. Field

Massachusetts AG Coakley Takes on the Banks | Abigail C. Field


Abigail C. Field-

The posse of Wall Street Sheriffs just got bigger: Massachusetts Attorney General Martha Coakley joined Nevada Attorney General Catherine Cortez Masto, New York Attorney General Eric Schneiderman and Delaware Attorney General Beau Biden. AG Coakley’s effort is the most comprehensive to date by far, in that she sues five major banks (Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally) and MERS for unlawful and deceptive conduct. (AG Masto still retains the title as the only AG bold enough to indict people.) Her suit does not include all the kinds of claims other AGs have alleged, however, and some of the claims are uniquely provable under Massachusetts law.

[REALITY CHECK]

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Five National Banks Sued by AG Coakley in Connection with Illegal Foreclosures and Loan Servicing

Five National Banks Sued by AG Coakley in Connection with Illegal Foreclosures and Loan Servicing


First Comprehensive Lawsuit to Address Foreclosure Crisis Seeks to Hold Banks Accountable For Illegal and Deceptiv

Bank of America, Wells Fargo, JP Morgan Chase, Citi, and GMAC All Named As Defendants; Mortgage Electronic Registration System (“MERS”) Also Sued 

BOSTON – Five national banks have been sued in connection with their roles in allegedly pursuing illegal foreclosures on properties in Massachusetts as well as deceptive loan servicing, Attorney General Martha Coakley announced today.  The lawsuit was filed today in Suffolk Superior Court against Bank of America, Wells Fargo, JP Morgan Chase, Citi, and GMAC.  It also names Mortgage Electronic Registration System, Inc. (“MERS”) and its parent, MERSCORP Inc., as defendants.

“The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis,” said AG Coakley.  “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law. Our action today seeks real accountability for the banks illegal behavior and real relief for homeowners.”

In the complaint pdf format of    Complaint Against 5 National Banks  , the Attorney General alleges these five entities engaged in unfair and deceptive trade practices in violation of Massachusetts’ law by:

  • Pervasive use of fraudulent documentation in the foreclosure process, including so-called “robo-signing”;
  • Foreclosing without holding the actual mortgage (“Ibanez” violations);
  • Corrupting Massachusetts’ land recording system through the use of MERS;
  • Failing to uphold loan modification promises to Massachusetts homeowners.

USE OF FALSE DOCUMENTS TO EXPEDITE FORECLOSURES “ROBO-SIGNING”:

According to the complaint, the banks used false documentation in the foreclosure process, including so-called “robo-signing”, whereby bank personnel signed affidavits that were untrue, or not based on the signor’s actual knowledge.  An entity wishing to foreclose on a property must demonstrate it has filed an affidavit in compliance with Massachusetts law.  By  October 2010, the banks’ flagrant disregard of affidavit and notary process requirements became widely known.  Filings with various Registers of Deeds provided to the Attorney General’s Office revealed the pervasive use of mortgage service employees to sign hundreds of affidavits and sworn statements without personal knowledge of the information contained in those affidavits.   Evidence also suggests these practices were not confined to the foreclosure process, but also used in the assignment, transfer and modification of mortgages secured by property in Massachusetts.

FORECLOSING WITHOUT LEGAL AUTHORITY “IBANEZ VIOLATIONS”:

Second, these five entities participated in unlawful foreclosures when they commenced foreclosures on mortgages where they were not the holders of those mortgages.  The Supreme Judicial Court (SJC), in Commonwealth v Ibanez, recently upheld Massachusetts law and stated that “only the present holder of a mortgage is authorized to foreclose on the mortgaged property.”  The complaint alleges that these entities ignored this fundamental legal mandate and proceeded to foreclosure even though they did not hold the mortgage, and thus had no legal authority to conduct the foreclosure.  The banks’ failure to obtain a valid assignment of the mortgage prior to foreclosure has adversely impacted titles to hundreds, if not thousands, of properties in the Commonwealth.  The complaint alleges that the banks falsely claimed to be the holder of a mortgage in several foreclosure documents even though they failed to obtain a valid assignment of the mortgage.

UNDERMINING PUBLIC RECORDS “MERS”:

Third, the complaint alleges that these banks have undermined our public land record system through the use of MERS, a private electronic registry system.  According to the complaint, the creation and use of MERS was adopted by these defendants primarily to avoid land registration and recording requirements, including payment of recording and registration fees, and to facilitate sales of mortgage loans.  The use of MERS has resulted in a lack of transparency as to the entities that have the legal authority to enforce mortgages, and unfairly conceals from borrowers the true identity of the holder of the debt.  Since 1997, more than 63 million home loans have been registered on the MERS System, accounting for more than 60 percent of all newly-originated mortgage loans.  The complaint also alleges that through the use of the MERS system, the banks unlawfully failed to register assignments of mortgages and transfers of the beneficial interests in mortgages.

MISREPRESENTING LOAN MODIFICATION PROGRAMS:

Finally, the complaint alleges the banks deceived and misrepresented to borrowers the process, requirements, and availability of loan modifications.   The banks publically claimed to be engaged in widespread loan modifications aimed at preserving home ownership and avoiding unnecessary foreclosures.   Through the National Homeownership Retention Program, which commenced on November 6, 2008, these banks represented that they would work with borrowers to help them avoid unnecessary foreclosures by reducing monthly mortgage payments to affordable and sustainable levels.  The complaint alleges these banks misled borrowers about their eligibility for this program and the amount of relief available, failed to achieve a significant level of modifications, and often strung along borrowers for months in trial modifications that were ultimately rejected. 

The AG’s lawsuit seeks civil penalties, restitution for harm to borrowers and compensation for registration fees that were avoided. The lawsuit also seeks to hold the banks accountable through permanent injunctive relief to provide a solution for prior unlawful foreclosures and to require that the banks, going forward, register assignments and other documents in accordance with Massachusetts law.

The lawsuit follows more than a year of negotiations with the banks over a 50-state settlement focused around the issues of fraudulent documents, including “robo-signing.”  AG Coakley had made clear that she would not sign on to an agreement with the banks if it included broad liability release regarding MERS and other issues or if she did not believe the banks had come to the table with an offer in the best interest of Massachusetts.

AG Coakley’s office has been a national leader in holding banks and investment giants accountable for their roles in the economic crisis.  AG Coakley has obtained recoveries from Morgan Stanley, Goldman Sachs, Royal Bank of Scotland, Countrywide, Fremont Investment & Loan, Option One, and others on behalf of Massachusetts homeowners.  As a result of these actions, her office has recovered more than $600 million in relief for investors and borrowers, helped keep more than 25,400 people in their homes, and returned nearly $60 million in taxpayer funds back to the Commonwealth.

More information about AG Coakley’s work during the lending crisis can be found here pdf format of    Subprime Lending Crisis Factsheet  .

The lawsuit is being handled by Attorney General Martha Coakley’s Consumer Protection Division, including Assistant Attorneys General Amber Villa, John Stephan, Sara Cable, and Justin Lowe; Acting Division Chief David Monahan; Chris Barry-Smith, Chief of the Public Protection & Advocacy Bureau and Stephanie Kahn, Deputy Chief of the Public Protection & Advocacy Bureau.

 

######################

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COMPLAINT | Commonwealth of Massachusetts vs.  MERS, MERSCORP, BofA (BAC), Wells Fargo, CitiMortgage, JPMorgan Chase, Ally

COMPLAINT | Commonwealth of Massachusetts vs. MERS, MERSCORP, BofA (BAC), Wells Fargo, CitiMortgage, JPMorgan Chase, Ally


COMMONWEALTH OF MASSACHUSETTS
SUFFOLK COUNTY SUPERIOR COURT DEPART

COMMONWEALTH OF MASSACHUSETTS
PLAINTIFF

vs.

BANK OF AMERICA, NA., BAC HOME
LOANS SERVICING, LP, BAC GP, LLC,
JPMORGAN CHASE BANK, N.A:, CrrIBANK,
NA., CITIMORTGAGE, rNC., GMAC
MORTGAGE, LLC, WELLS FARGO BANK,
N.A., MORTGAGE ELECTRONIC
REGISTRATION SYSTEK INC„ and
MERSCORP, INC.,
DEFENDANTS

 

[ipaper docId=74404114 access_key=key-1am5u5umyvfcaay5kqzo height=600 width=600 /]

 

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Massachusetts AG Coakley to announce “comprehensive lawsuit” on foreclosure documentation against MERS, BofA, Wells, Citi, JPM, Ally

Massachusetts AG Coakley to announce “comprehensive lawsuit” on foreclosure documentation against MERS, BofA, Wells, Citi, JPM, Ally


Developing Story… Come Back and check real soon!

WE SAW THIS COMING!

WILL NEW YORK BE NEXT?

.

.

 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

 

FOR IMMEDIATE RELEASE:                                           MEDIA CONTACT:

December 1, 2011                                                                  Press Office

                                                                                                (617) 727-2543

                                                                       

MEDIA ADVISORY

 

AG COAKLEY TO HOLD PRESS CONFERENCE TO ANNOUNCE NATION’S FIRST COMPREHENSIVE LAWSUIT AGAINST 5 NATIONAL BANKS TO ADDRESS FORECLOSURE CRISIS

Files Suit After More Than Year of 50-State Negotiations

 

WHAT:           Massachusetts Attorney General Martha Coakley will hold a press conference this afternoon to announce that her office has filed the nation’s first comprehensive lawsuit against the five major national banks regarding the foreclosure crisis.  The lawsuit was filed today in Suffolk Superior Court against Bank of America, Wells Fargo, JP Morgan Chase, Citi, and Ally Financial.  It also names Mortgage Electronic Registration System, Inc. and its parent, MERSCORP Inc, as defendants. 

 

The AG’s lawsuit seeks accountability for the banks’ unlawful and deceptive conduct in the foreclosure process, including unlawful foreclosures, false documentation and robo-signing, MERS, and deceptive practices related to loan modifications.

 

WHO:             Massachusetts Attorney General Martha Coakley

WHEN:          TODAY at 1:00 PM              

 

WHERE:     Massachusetts Attorney General’s Office

   One Ashburton Place

                        20th Floor

                        Boston, MA   

 

CALL IN:       For those who cannot attend the press conference, you may listen to the audio by dialing into the conference number below. A prompt will then ask you for the Access Code. Please note that you will not be able to ask questions via the conference line.

 

PHONE NUMBER     877-820-7831

ACCESS CODE          379877

 

 

##########

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Bill Beckmann CEO of MERSCORP “Beau Biden is wrong on MERS lawsuit”

Bill Beckmann CEO of MERSCORP “Beau Biden is wrong on MERS lawsuit”


Oh Really…Strange from Pg. 91

“the “New Man at MERS,” Bill Beckman was just
interviewed by Mortgage Technology Magazine and he
frankly admits:


“We did not have a robust process to
make sure that all the data on our system was
accurate, timely and reliable. Our view was that is
the servicer’s data and they’re relying on it for
their own transactions, they’re using their own
systems, so we don’t have to double check…Well, the
regulators took the perspective of, ‘No. You’ve got
your name on it. It’s your system. It is being used,
but you don’t know exactly the way it’s being used, so
there’s no reason those two things shouldn’t line
up.’”

Delaware Online-

Unfortunately, MERS has been making national headlines recently as the subject of politically motivated rhetoric and litigation, including in Delaware with Attorney General Beau Biden’s recently announced lawsuit. Critics of the MERS database are publicly blaming it for just about everything that went wrong in the housing industry, for local revenue problems, and even for some of Wall Street’s transgressions.

[DELAWARE ONLINE]

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JIM FULLER, CLERK OF THE COURT, DUVAL COUNTY, FLORIDA vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), MERSCORP

JIM FULLER, CLERK OF THE COURT, DUVAL COUNTY, FLORIDA vs. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS), MERSCORP


IN THE CIRCUIT COURT, FOURTH
JUDICIAL CIRCUIT, IN AND FOR
DUVAL COUNTY, FLORIDA

JIM FULLER, CLERK OF THE CIRCUIT
COURT, DUVAL COUNTY, FLORIDA,
in his official capacity and on behalf of
all those similarly situated,

Plaintiff,

vs.

MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC., a Delaware corporation; and
MERSCORP, INC., a Delaware Corporation

Defendants.

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

 

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Mortgage Registry “MERS” Accused of Owing El Paso County Millions; Will County Sue?

Mortgage Registry “MERS” Accused of Owing El Paso County Millions; Will County Sue?


Here’s exactly where the issue always was, Counties are being cheated from their cut and in return schools, government agencies and tax payers suffer. This was nothing more than a wall street “self stimulus”, “bailout” from the get go.

What Universal Law exist permitting MERS? A self made Wall Street Law.

Besides this all, MERS can’t even keep track of who owns what. MERS is not a nominee and not a beneficiary because it never loaned One Cent.

KTSM-

EL PASO – Between record home foreclosures and devastating budget cuts, El Paso County has seen a rough couple of years recently. We usually think of these crises as separate, but some argue there’s a common link between these challenges, that lies with a company known as Mortgage Electronic Registration Systems, or MERS.

El Paso County is in a foreclosure crisis. According to the real estate information company, CoreLogic, more than 5,000 homes have gone into foreclosure since the recession began in late 2007.

Attorney Richard Roman has represented dozens of homeowners in foreclosure cases; he argues the real problem is MERS (Mortgage Electronic Registration Systems).

[KTSM]

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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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KABOOM! Lender Processing Services LOSES Breach of Contract Claim in WAMU Case. FDIC Wants $154,529,000

KABOOM! Lender Processing Services LOSES Breach of Contract Claim in WAMU Case. FDIC Wants $154,529,000


Lender Processing Services, Inc. just filed a Regulation FD Disclosure alerting investors that

On May 9, 2011 in the U.S. District Court for the Central District of California to recover alleged losses of approximately $154,529,000. The FDIC’s complaint alleged that these losses were the direct and proximate result of the defendants’ breach of contract with WAMU and alleged gross negligence of the defendants with respect to the provision of certain appraisal services.On November 2, 2011, the court issued an order limiting the FDIC’s claims to breach of the contract and granting the Company’s Motion to Dismiss the FDIC’s claims of gross negligence, alter ego, single business enterprise and joint venture claims. With respect to the limited remaining breach of contract claim, the Company maintains that the Appraisal Outsourcing Services Agreement between LSI and WAMU clearly specifies a $10,000 per claim limitation of liability. The Company is confident that it will ultimately prevail on any remaining breach of contract claim.

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

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


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

–against —

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

–and–

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

EXCERPTS:

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

[…]

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

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

 

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Bank of America, JPMorgan Units Sued by Sealink Funding Ltd. in Mortgage-Backed Securities Cases

Bank of America, JPMorgan Units Sued by Sealink Funding Ltd. in Mortgage-Backed Securities Cases


Another day, Billions involved.

 

Bloomberg-

Bank of America Corp. (BAC)’s Countrywide unit was sued by Sealink Funding Ltd. in New York over $1.6 billion of residential mortgage-backed securities the fund purchased between 2005 and 2007.

Sealink filed the suit against Countrywide in New York State Supreme Court yesterday, seeking unspecified compensatory, rescissory and punitive damages. Sealink is a fund created to manage Landesbank Sachsen AG’s riskiest assets after the German lender almost collapsed.

“Countrywide was an entity driven by only one purpose — to originate and securitize as many mortgage loans as possible into” mortgage-backed securities “to generate profits for the Countrywide defendants, without regard to the investors that relied on the critical, false information provided to them with respect to the related certificates,” lawyers for Sealink said in the lawsuit.

Sealink filed a similar suit yesterday in the same court against JPMorgan Chase & Co. (JPM) over $2.4 billion worth of residential mortgage-backed securities purchased between 2005 and 2007.

[BLOOMBERG]

image credit: mybanktracker

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Wells sues JPMorgan over 800 mortgage loans, EMC breached representations and warranties on 89 percent of a sample of 948 loans

Wells sues JPMorgan over 800 mortgage loans, EMC breached representations and warranties on 89 percent of a sample of 948 loans


Now that’s what you call a HIGH PERCENTAGE of “clear defects”!

REUTERS-

JPMorgan Chase & Co (JPM.N) was sued by Wells Fargo & Co (WFC.N), which seeks to force it to buy back more than 800 soured mortgage loans that it oversees as trustee.

In a complaint made public on Wednesday in the Delaware Chancery Court, Wells Fargo accused JPMorgan’s EMC Mortgage LLC unit of refusing its demands that EMC buy back the loans, which were contained in Bear Stearns Mortgage Funding Trust 2007-AR2.

JPMorgan bought Bear Stearns and its EMC unit in 2008.

[REUTERS]

 

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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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Banks May Fight Banks as Mortgage Securities Investors Seek Class Status

Banks May Fight Banks as Mortgage Securities Investors Seek Class Status


Just as in Abigail C. Field’s Fortune piece “Fighting a foreclosure suit? Hope for the right judge”, the same may be true for these investors…

Bloomberg-

Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and other banks may pay more to resolve claims over their alleged roles in the collapse of a $2.3 trillion mortgage- backed securities market if sophisticated investors are allowed to sue as a group along with less savvy ones.

Class-action status allows investors to pool financial and legal resources, giving them greater leverage to win larger settlements or verdicts. The banks, however, have a court ruling on their side that may help fend off such blockbuster cases. It says class status is barred because some investors are too sophisticated — in fact, because some of them are other banks, including JPMorgan.

[BLOOMBERG]

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Cape Coral couple sue Wells Fargo, Sold them home it didn’t own

Cape Coral couple sue Wells Fargo, Sold them home it didn’t own


If you recall it, I believe Mr. Barnhart is a Real Estate broker, so even the pros can be duped without even realizing this.

News-Press-

Brian and Holly Barnhart of Cape Coral – who were sold a house by Wells Fargo Bank even though the bank didn’t own the property – have filed a lawsuit alleging fraud and negligence.

The Barnharts, who emptied their life savings to buy the house for $153,000 cash and renovate it for another $80,000, bought the house in November.

But it turned out Wells Fargo had given the house back to its original owner …

[NEWS-PRESS]

[Image] The News-Press

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COMPLAINT + EXHIBITS | American Home Mortgage Servicing Inc. Vs. Lender Processing Services Inc., DOCX

COMPLAINT + EXHIBITS | American Home Mortgage Servicing Inc. Vs. Lender Processing Services Inc., DOCX


American Home Mortgage

Servicing Inc.

v.

Lender Processing Services

Inc., DOCX, L.L.C

[ipaper docId=63851479 access_key=key-19uowkk1cinmvgl4xmqi height=600 width=600 /]

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Hagens Berman Announces Securities Investigation Of Bank Of America

Hagens Berman Announces Securities Investigation Of Bank Of America


Hagens Berman Sobol Shapiro LLP today announced that it is investigating concerns by hedge funds and institutional investors who believe Bank of America Corp. (NYSE: BAC) may have failed to disclose to investors the risk associated with a $10 billion lawsuit threat from American International Group (“AIG”) (NYSE: AIG).

According to reports, AIG invested in billions of dollars of mortgage-backed securities sold by Bank of America prior to the housing collapse. In January 2011, after analyzing data from hundreds of thousands of loans, AIG reportedly informed the bank that it felt the risk of the securities had been misrepresented and was prepared to sue the banking giant for more than $10 billion.

Hagens Berman is investigating whether Bank of America failed to disclose fully the risks of its dispute with AIG. According to media reports, the bank did not mention the threat of the lawsuit in its quarterly regulatory filing, which was issued four days before AIG’s lawsuit was filed.

“We believe that Bank of America knew, or should have known, that its dispute with AIG represented a significant risk for investors,” said Partner Reed R. Kathrein, who is leading the firm’s investigation from its San Francisco office. “If the company did indeed fail to disclose such a risk, it could represent a major breach of the securities laws.”

On August 8, 2011, after several months of negotiations, AIG filed its lawsuit. Bank of America shares fell sharply, losing 20 percent of their value.

Institutional investors and others who purchased Bank of America common stock between May 5, 2011 and August 8, 2011, and who have losses exceeding $1,000,000 as a result of BAC’s stock drop on August 8, 2011, are encouraged to contact the firm. Reed R. Kathrein can be reached at (206) 623-7292 or via email at CCME@hbsslaw.com. Investors can also learn more about this investigation at www.hbsslaw.com/BACsecurities.

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GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
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