Mbs | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "mbs"

Alison Frankel: How BofA could lose big if it wins MBIA regulatory challenge

Alison Frankel: How BofA could lose big if it wins MBIA regulatory challenge


Alison Frankel’s On The Case-

I’ve spent a lot of time talking about what I consider Bank of America’s risky gamesmanship in its multi-pronged litigation with the bond insurer MBIA, but it may be that I’ve underestimated that risk by focusing on the downside for the bank in MBIA’s breach of contract and fraud suit. Under a not-implausible scenario, BofA faces serious risk in its regulatory challenge to MBIA’s transformation that’s going to trial on May 14. And ironically, the risk comes not from losing the case — but from winning it.

According to a sophisticated and well-advised MBIA institutional investor that has devoted serious resources to analyzing the issue — trust me, even though the investor doesn’t want to broadcast its involvement, this is a seriously savvy player — if Bank of America and two French banks succeed in overturning MBIA’s 2009 split into separate muni bond and structured finance businesses, there’s a reasonable likelihood that BofA could wind up at the back of the line of MBIA claimants, waiting years for whatever scraps are left over from payouts to municipal bond insurance policyholders.

Here’s why. For all sorts of reasons…

[REUTERS ON THE CASE]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

Israeli Bank Hapoalim sues Bank of America, Merrill Lynch and Countrywide for $720M

Israeli Bank Hapoalim sues Bank of America, Merrill Lynch and Countrywide for $720M


Haaretz-

Bank Hapoalim has filed a massive $720 million suit against Bank of America, Merrill Lynch and Countrywide over its losses in the U.S. subprime crisis, alleging that the U.S. institutions misled and defrauded it.

Among Israel’s financial institutions, Hapoalim suffered the worst losses in the subprime crisis due to its investments in mortgage-backed securities.

Between 2005 and 2007, the bank, led by Shlomo Nehama and Zvi Ziv, snapped up mortgage-backed securities in an attempt to meet its goal of a 15% return on equity by 2007.

[HAARETZ]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

Alison Frankel: NY AG’s curious new bid to intervene in $8.5 bl BofA MBS deal

Alison Frankel: NY AG’s curious new bid to intervene in $8.5 bl BofA MBS deal


Reuters Legal-

New York Attorney General Eric Schneiderman still wants a say in whether Bank of America’s proposed $8.5 billion settlement with Countrywide mortgage-backed securities investors should be approved by a state-court judge. The AG’s new intervention motion, filed more than seven months after Schneiderman first moved to join the case, makes the exact same arguments as the old motion, which was pending before New York State Supreme Court Justice Barbara Kapnick when the settlement was removed from state court to Manhattan federal court last August. There’s just one notable exception: The AG’s office “deleted” its explosive fraud counterclaims against Countrywide MBS trustee Bank of New York Mellon. Is playing nice (or, at least, nicer) enough to win the AG a seat at the table?

Those fraud counterclaims, as you’ll surely recall, caused quite a stir when Schneiderman’s office tacked them onto its original motion to intervene. One Manhattan business development official questioned the wisdom of attacking a trustee that was at least making an effort to respond to investors’ concerns and warned that the AG was endangering the city’s standing as the preferred home of financial institutions. BNY Mellon and the institutional investors backing the proposed $8.5 billion settlement responded in kind to the AG’s intervention motion, asserting that Scheiderman didn’t have standing to intervene because he’s not a Countrywide MBS investor.

[REUTER’S ON THE CASE]

[ipaper docId=88979010 access_key=key-1qpcvmn3n6t0p8xg505g height=600 width=600 /]

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

NY pushes objection to BofA $8.5 billion mortgage pact

NY pushes objection to BofA $8.5 billion mortgage pact


Reuters-

Bank of America Corp’s proposed $8.5 billion mortgage bond settlement received fresh opposition on Tuesday from New York’s attorney general, who said the accord appears unfair to investors who may deserve to recover more.

Eric Schneiderman, the attorney general, filed papers on Tuesday asking a New York State Supreme Court justice for permission to intervene.

He had made the same request last August before the case moved to federal court. It returned to the state court in February.

The settlement announced last June arose from Charlotte, North Carolina-based Bank of America’s 2008 purchase of Countrywide Financial Corp, once the nation’s largest mortgage lender.

[REUTERS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

Latest NY appeals ruling is bad news for BofA in monoline cases

Latest NY appeals ruling is bad news for BofA in monoline cases


Alison Frankel-

Ordinarily, there’s not much reason to get excited about a state intermediate appeals court upholding a procedural ruling by a trial court judge. But in the litigation between bond insurers and mortgage-backed securities issuers, decisions are not only magnified by the tens of billions of dollars at stake, but also by the paucity of precedent. Almost every ruling is groundbreaking, which means that decisions have an impact far beyond a single case.

With that in mind, there are two reasons why a ruling Thursday by the New York Appellate Division, First Department, is a setback for Bank of America: timing and authority.

Without much comment, the state appeals court affirmed two rulings by New York State Supreme Court Justice Eileen Bransten, who last fall denied motions by Bank of America to sever and consolidate successor liability claims against the bank in four bond insurer cases against Countrywide. “The court properly exercised its discretion in denying defendant’s motion to sever plaintiffs’ successor liability claims from the primary claims and to consolidate them, for purposes of discovery, in a single action,” the appellate decision said. “The successor liability actions are at completely different stages of discovery, and consolidation would result in undue delay.”

[REUTERS ON THE CASE]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

Ambac v Countrywide | NY App Div., 1st Dept. “denying defendant’s motion to sever plaintiffs’ successor liability claims”

Ambac v Countrywide | NY App Div., 1st Dept. “denying defendant’s motion to sever plaintiffs’ successor liability claims”


Decided on April 5, 2012
Gonzalez, P.J., Tom, Catterson, Renwick, Richter, JJ. 7286N- 7287N- 7288N- 7289N & M-664- M-665-
651612/10 602825/08 650736/09 650042/09 -745

[*1]Ambac Assurance Corp., et al., Plaintiffs-Respondents,

v

Countrywide Home Loans, Inc., et al., Defendants, Bank of America Corp., Defendant-Appellant.

MBIA Insurance Corporation, Plaintiff-Respondent,

v

Countrywide Home Loans, Inc.,et al., Defendants, Bank of America Corp., Defendant-Appellant.

Financial Guaranty Insurance Co., Plaintiff-Respondent,

v

Countrywide Home Loans, Inc.,et al., Defendants, Bank of America Corp., Defendant-Appellant.

Syncora Guarantee, Inc., Plaintiff-Respondent,

v

Countrywide Home Loans, Inc.,et al., Defendants, Bank of America Corp., Defendant-Appellant.

O’Melveny & Myers LLP, New York (Jonathan Rosenberg of
counsel), for appellant.
Patterson Belknap Webb & Tyler LLP, New York (Robert P.
LoBue of counsel), for Ambac Assurance Corp. and The
Segregated Account of Ambac Assurance Corporation, respondents.
Quinn Emanuel Urquhart & Sullivan, LLP, New York (Peter
E. Calamari of counsel), for MBIA Insurance Corporation,
respondent.
Kutak Rock LLP, New York (Robert A. Jaffe of counsel), for
Financial Guaranty Insurance Co., respondent.
Allegaert Berger & Vogel LLP, New York (David A. Berger of
counsel), for Syncora Guarantee, Inc., respondent.

Orders, Supreme Court, New York County (Eileen Bransten, J.), entered October 31, 2011 and November 2, 2011, which, among other things, denied defendant Bank of America Corp.’s motions to sever and consolidate plaintiffs’ successor liability claims for purposes of discovery, and held in abeyance defendant’s motion to consolidate the successor liability claims for purposes of trial, unanimously affirmed, with costs.

This is a consolidated appeal involving four related but separate claims by monoline insurers for primary liability against the Countrywide defendants in connection with financial guarantee insurance covering mortgage-backed securities. The actions also involve successor liability against defendant Bank of America. The court properly exercised its discretion in denying defendant’s motion to sever plaintiffs’ successor liability claims from the primary claims and to consolidate them, for purposes of discovery, in a single action. The successor liability actions are at completely different stages of
discovery, and consolidation would result in undue delay (see Barnes v Cathers & Dembrosky, 5 AD3d 122 [2004]).

M-664 –Syncora Guarantee Inc. v Countrywide Home Loans, Inc., et al. and Bank of America Corp.

M-665 –MBIA Insurance Corporation v Countrywide Home Loans, Inc., et al. and Bank of America Corp.

M-745 –MBIA Insurance Corporation, et al. v Countrywide Home Loans, Inc., [*2]et al. and Bank of America Corp.

Motions to supplement the record on appeal (M-664, M-665) granted; cross motion to strike the supplemental record and reply brief, or for leave to supplement the record in the event the motion (M-665) is granted (M-745), granted to the extent of granting leave to supplement the record.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: APRIL 5, 2012

CLERK

[ipaper docId=88657343 access_key=key-1i7t2yobucg5b3s5zqos height=600 width=600 /]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

CREDO: Tell President Obama: 55 investigators aren’t enough to investigate Wall Street criminals.

CREDO: Tell President Obama: 55 investigators aren’t enough to investigate Wall Street criminals.


Via CREDO

Back in January, President Obama announced during the State of the Union speech the creation of a new financial crimes task force to investigate the crimes and misdeeds that led to the economic collapse and “hold accountable those who broke the law.”

Yet, despite the enormity of the issue, its direct impact on millions of Americans and the widespread nature of crimes and wrongdoing, the new financial crime unit has been allocated a paltry 55 staff members to undertake this enormous task.1

And now we’re hearing from insiders in Washington DC, that the full complement of 55 promised investigators — which is already not nearly enough — haven’t even been deployed to the task force.

Election year promises aren’t nearly enough. President Obama needs to prove his commitment to the financial crimes task force is real and provide the task force with the resources it needs to investigate Wall Street criminals.

Tell President Obama: 55 investigators are not enough. We need 20 times more staffing to launch a real investigation into Wall Street’s crimes.

After the much smaller savings and loan scandal of the ’80s approximately 1,000 FBI agents and dozens of federal prosecutors were assigned to prosecute related cases2. And 100 FBI agents were tasked with investigating the Enron scandal3, which involved just one company and caused none of the economy-wide damage we’ve seen since the collapse of the housing bubble.

The 55 investigators promised to the financial crimes task force is not nearly enough. And to find out that President Obama hasn’t delivered on those investigators, let alone resourced the effort at the levels appropriate to the biggest financial fraud in U.S. history, is shocking.

President Obama’s record on Wall Street accountability is abysmal. But because of enormous grassroots pressure from activists like you and polling that suggests he needs to take on Wall Street as a part of his election campaign, we have a real opportunity to move President Obama to meaningful action on Wall Street accountability. Time, however, is running out.

President Obama’s first task force at the Department of Justice did little if anything to prosecute Wall Street for crimes that led to the financial crisis. But because of your activism, he announced a new task force and named progressive champion and New York Attorney General Eric Schneiderman one of its five co-chairs.

Now we need to pressure the White House to give that task force the resources it needs to pursue justice. Without sufficient staff to conduct thorough investigations, it’s hard to see how this task force could bring indictments quickly or even beforesStatutes of limitations run out.

Tell President Obama: 55 investigators are not enough. We need 20 times more staffing to launch a real investigation into Wall Street’s crimes.

The economic crisis we’re in demands a response commensurate with the damage done by Wall Street crooks. But the 55 promised investigators don’t even come close to being adequate. If the White House hasn’t even followed through on its promise of a paltry 55 investigators, it’s clear that massive pushback is needed to get the level of staffing we truly need to bring Wall Street criminals to justice.

Aside from the appointment of Attorney General Schneiderman, none of the other co-chairs of the new task force has done literally anything that achieves our goal of holding banks accountable or prosecuting bankers for criminal activity.

In fact, three of his co-chairs served on the earlier failed Department of Justice task force that the new investigation was created to supersede.

In an election year when we know the Obama reelection campaign wants to frame his race as opposing the candidate of the one percent, President Obama will be particularly sensitive to public perception of whether his efforts to hold Wall Street accountable are meaningful and represent the full force of his office.

Tell President Obama: 55 investigators are not enough. We need 20 times more staffing to launch a real investigation into Wall Street’s crimes.

We want, and our country needs, indictments. The collapse of the housing bubble led directly to the economic crisis we’re in. But not one of the Wall Street crooks who drove our economy off a cliff has gone to jail. And without aggressive investigations and prosecution for misconduct, none of them will.

President Obama needs to give the Department of Justice task force the resources required to launch a serious investigation that will bring about real accountability before the statutes of limitations run out for Wall Street’s crimes.

It’s been months already. We can’t waste any more time. We must act now before we lose our opportunity to do anything significant at all.

1. “Details Emerge of New Financial Fraud Unit ,” Huffington Post, 01-26-12.
2. FBI Deputy Director John S. Pistole’s statement before the Senate Judiciary Committee, 02-11-09
3. “In Past Financial Crises, Fewer Pursued In Courts,” NPR, 08-14-11.

http://act.credoaction.com/campaign/fraud_task_force/?rc=tw1

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

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

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


© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

Does Pauley’s BNYM ruling spell new liability for MBS trustees?

Does Pauley’s BNYM ruling spell new liability for MBS trustees?


Alison Frankel-

Beth Kaswan of Scott + Scott has the fervor of a pioneer when she talks about the implications of U.S. District Judge William Pauley‘s ruling Tuesday that her client, a Chicago police officers’ pension fund, can proceed with some claims that Bank of New York Mellon violated its duty to Countrywide mortgage-backed securities investors under the federal Trust Indenture Act. “Judge Pauley is the first judge to say the Trust Indenture Act, in existence since 1939, does apply in this type of circumstance to mortgage-backed securities,” Kaswan told me Wednesday. “That means investors can sue trustees, even if they can’t cobble together 25 percent” of the voting rights in any particular trust — a prerequisite to suing under the pooling and servicing agreements governing most MBS trusts.

Kaswan, who said her firm was the first to assert the federal law against an MBS trustee, believes Pauley’s 19-page decision offers a significant new route to damages for MBS investors. The Manhattan federal judge ruled that the Chicago fund only has standing to bring claims for the trusts in which it invested, reducing the number of Countrywide MBS trusts in the case from 530 to 26. But he also said that investors in those 26 trusts can sue BNY Mellon for allegedly failing to notify certificateholders that Countrywide and Bank of America supposedly breached their obligations to the trusts and for failing to take action on those breaches.

[ON THE CASE -REUTERS]

[ipaper docId=88055319 access_key=key-1xpysvttvandscc8jtwi height=600 width=600 /]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

Alison Frankel: Why NY businesses should worry about BofA’s new MBS defense

Alison Frankel: Why NY businesses should worry about BofA’s new MBS defense


Reuters Legal-

U.S. District Judge Mariana Pfaelzer of federal court in Los Angeles is poised to deliver a ruling in AIG’s mortgage-backed securities case against Countrywide that could have an impact on just about every company headquartered in New York. The issue: How long do N.Y. businesses have to bring fraud claims? Are they entitled to the benefit of the state’s generous six-year statute of limitations? Or, as Countrywide argues in a supplemental motion to dismiss filed on March 23, are companies headquartered in New York instead restricted to the generally stingier time limits in their states of incorporation?

To understand how this question arose in AIG’s MBS case, we have to back up a few steps. It’s no secret that in MBS litigation, there’s no more potent defense than arguments that investors waited too long to file suit. It’s a quick, clean way to excise big chunks of a plaintiff’s case, particularly because federal securities claims, with exceptions for American Pipe tolling (if you don’t know, don’t ask), are generally time-barred after three years under the statute of limitations or the more-obscure-until-MBS-litigation statute of repose. That’s why we’ve seen so many MBS plaintiffs — including AIG and the satellite insurance companies that are also plaintiffs in its Countrywide suit — assert state-law fraud claims in addition to federal securities claims.

[ON THE CASE REUTERS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

ALL IN ONE BASKET: THE BANKRUPTCY RISK OF A NATIONAL AGENT-BASED MORTGAGE RECORDING SYSTEM (MERS)

ALL IN ONE BASKET: THE BANKRUPTCY RISK OF A NATIONAL AGENT-BASED MORTGAGE RECORDING SYSTEM (MERS)


John P. Hunt

University of California – Davis School of Law (King Hall); Berkeley Center for Law, Business and the Economy

Richard Stanton

University of California, Berkeley – Finance Group

Nancy Wallace

University of California, Berkeley – Real Estate Group

February 3, 2012

UC Davis Legal Studies Research Paper No. 269

Abstract:     
Mortgage Electronic Registration Systems, Inc. (“MERS, Inc.”) owns legal title to some 30 million mortgages in the United States. The company, which was a key part of the mortgage securitization apparatus in the late 1990s and 2000s, is now under intense pressure from public and private lawsuits and investigations and faces a very real threat of insolvency. Policymakers are looking ahead to potential replacements for MERS, Inc., as a recent Fed staff proposal for a substitute system indicates. This Article examines what might happen to the mortgages that MERS, Inc. at least nominally owns in the event that the company enters bankruptcy, a question that apparently has never been explored in a publicly available analysis.

Although the legal analysis underlying the design of MERS, Inc. does not appear to be publicly available, a key assumption seems to have been that if the company ever entered bankruptcy, the mortgages in its hands would not enter the company’s bankruptcy estate and would not be available to creditors. This Article challenges that assumption, pointing to the broad authority the Bankruptcy Code confers on the bankruptcy trustee with respect to interests in real property, such as mortgages. Most courts that have considered the issue have found that the bankruptcy trustee can bring into the estate any real property interest that the debtor could have conveyed to a good-faith purchaser. There is a significant risk that MERS, Inc. can convey MERS mortgages to a purchaser acting in good faith.

Although part of that risk arises from the company’s conduct in making and acquiescing in claims in court that the company can sell the mortgages, has constitutionally protected property interests in the mortgages, is a creditor of mortgage borrowers, and owns a beneficial interest in the mortgages, part of the risk is inherent in any mortgage recording system that operates nationally and holds mortgages as an agent. Policymakers should consider that risk as they consider whether MERS should be replaced and what form the replacement should take.

[ipaper docId=86987796 access_key=key-1h1qxgl3zxlw0l1hxq94 height=600 width=600 /]

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

SEC Files Subpoena Enforcement Action Against Wells Fargo for Failure to Produce Documents in Mortgage-Backed Securities Investigation

SEC Files Subpoena Enforcement Action Against Wells Fargo for Failure to Produce Documents in Mortgage-Backed Securities Investigation


Litigation Release No. 22305 / March 23, 2012

Securities and Exchange Commission v. Wells Fargo & Company, Civil Action No. CV-1280087 CRB Misc. (N.D. Cal. March 23, 2012)

.

.

SEC Files Subpoena Enforcement Action Against Wells Fargo for Failure to Produce Documents in Mortgage-Backed Securities Investigation

The Securities and Exchange Commission announced today that it has filed a subpoena enforcement action in the U.S. District Court for the Northern District of California against Wells Fargo & Company. According to the filing, the Commission is investigating possible fraud in connection with Wells Fargo’s sale of nearly $60 billion in residential mortgage-backed securities to investors. Pursuant to subpoenas dating back to September 2011, the bank was obligated to produce (and agreed to produce) documents to the Commission, but has failed to do so. Accordingly, the Commission filed its Application for an Order Requiring Compliance with Administrative Subpoenas.

The Commission’s action relates to its investigation into whether Wells Fargo made material misrepresentations or omitted material facts in a series of offerings between September 2006 and early 2008. The Commission’s application explains that, in connection with the securitization of the loans, a due diligence review of a sample of the loans in each offering was performed. Certain loans within that sample would be dropped from the offering for failure to comply with Wells Fargo’s loan underwriting standards. However, according to the Commission, it does not appear that Wells Fargo took any steps to address similar deficiencies in the remainder of the loans in the pool, which were securitized and sold to investors. The Commission is investigating, among other things, whether Wells Fargo misrepresented to investors that the loans being securitized complied with the bank’s loan underwriting standards.

The staff in the Commission’s San Francisco Regional Office issued several subpoenas to Wells Fargo since September 2011 seeking, among other things, materials related to due diligence and to the bank’s underwriting guidelines. According to the Commission, Wells Fargo agreed to produce the documents, and set forth a timetable for doing so, yet has failed to produce many of the materials.

Pursuant to its Application, the Commission is seeking an order from the federal district court compelling Wells Fargo to comply with the Commission’s administrative subpoenas and to produce all responsive materials to the staff. The Commission notes that it is continuing to conduct a fact-finding inquiry and has not concluded that anyone has broken the law.

 

http://www.sec.gov/litigation/litreleases/2012/lr22305.htm

alarm image: DealBreaker

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

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]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (0)

GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
Kenneth Eric Trent, www.ForeclosureDestroyer.com

Archives