Subpoena | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "subpoena"

Pool guy, landscaper of $18 million foreclosure winner subpoenaed

Pool guy, landscaper of $18 million foreclosure winner subpoenaed


“Hunger Games”

Palm Beach Post-

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

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

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

[PALM BEACH POST]

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Steven J. Baum settles with NY AG Schneiderman; will pay $4M

Steven J. Baum settles with NY AG Schneiderman; will pay $4M


What about the rest? This is an insult!

Update: Pillar Processing is also part of this settlement.

Buffalo Business First-

The case of embattled foreclosure attorney Steven Baum has taken another turn as the Amherst attorney reached a settlement with the New York State Attorney General over charges his firm mishandled foreclosure filings statewide over many years.

Under terms of the agreement, Baum has agreed not to handle mortgages for two years and will pay a penalty of $4 million.

The deal with Attorney General Eric Schneiderman’s office comes five month after the firm settled with the United States Attorney for the Southern District and paid $2 million while agreeing to drastically overhaul its business practices.

[BUFFALO BUSINESS FIRST]

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KaBOOM! Lehman Brothers Subpoenas Treasury Secretary Tim Geithner In JP Morgan Fight

KaBOOM! Lehman Brothers Subpoenas Treasury Secretary Tim Geithner In JP Morgan Fight


WSJ-

(“Lehman Brothers Subpoenas Geithner In J.P. Morgan Fight,” at 10:55 p.m. EST Thursday, misstated the year Lehman originally sued J.P. Morgan in the 10th paragraph. The correct version follows.)

Lehman Brothers Holdings Inc. (LEHMQ) and its creditors late Thursday said they want to subpoena Treasury Secretary Timothy Geithner to question him under oath over allegations J.P. Morgan Chase & Co. (JPM) illegally siphoned billions of dollars from the collapsing investment bank in the days before it filed for the largest bankruptcy in U.S. history.

In a filing accompanying Lehman’s filing, made in U.S. District Court in Washington, Lehman’s official committee …

[WALL STREET JOURNAL]

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Cummings and Tierney Demand Answers from FHFA re: Principal Reduction

Cummings and Tierney Demand Answers from FHFA re: Principal Reduction


Agency’s Own Data Show Principal Reduction Would Save Taxpayers Billions of Dollars Former Fannie Mae Employee Calls into Question DeMarco’s Response to Congress

Washington, DC (Feb. 8, 2012) – Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Committee Member John F. Tierney sent a letter to Edward DeMarco, the Acting Director of the Federal Housing Finance Agency (FHFA), raising serious questions about his recent response to Congress arguing that principal reduction programs do not serve the interests of American taxpayers.

After months of withholding data and analysis, and in the face of a subpoena request, DeMarco finally sent a response letter to Cummings and Tierney on January 20, 2012, outlining his justification for refusing to approve any principal reduction programs for loans backed by Fannie Mae and Freddie Mac.

“The single most significant revelation in your letter to Congress,” wrote Cummings and Tierney, “is that, even based on your own questionable assumptions and data, principal reduction programs serve the taxpayer interests even when compared to your preferred alternative of forbearance.”

This revelation directly contradicts DeMarco’s testimony before the Oversight Committee on November 16, in which he stated that principal reduction “is not going to be the least-cost approach for the taxpayer.”

In addition, Cummings and Tierney revealed that a former Fannie Mae employee has now provided new information about a pilot program for principal reductions that was tentatively approved in 2010, but cancelled by Fannie Mae officials several months before the November elections in which Republicans took control of the House of Representatives. According the former employee, the officials were “philosophically opposed” to the concept of reducing principal, notwithstanding the potential economic benefits.

“We have now become aware of new information,” wrote Cummings and Tierney, “that calls into serious question the accuracy and completeness of your response, as well as your motivation for continuing to oppose principal reduction programs even when they have the potential to save American taxpayers billions of dollars.”

DeMarco’s letter to Congress did not mention this pilot program, and instead repeated his claim that he lacks the statutory authority to proceed with principal reduction programs.

In their letter, Cummings and Tierney also highlighted new reports that DeMarco is now blocking efforts to allow Fannie Mae and Freddie Mac to participate in principal reduction programs agreed to as part of the multi-state settlement under which the nation’s five largest mortgage servicers will provide billions of dollars in compensation for their abuses and illegal actions against homeowners.

“It appears that your refusal to follow Congress’ direction and allow principal reduction programs is based more on ideology and the fear of political backlash than on a straightforward analysis of the interests of American taxpayers,” they wrote.

“Unlike almost any other official in the entire government,” they added, “you have an historic opportunity to improve our nation’s fragile economy, to provide real assistance to millions of struggling homeowners, and to save American taxpayers billions of dollars in the process. It is time for you either to seize this opportunity or to step aside.”

Below is the full letter:

February 8, 2012

Mr. Edward DeMarco
Acting Director
Federal Housing Finance Agency
1700 G Street NW
Washington, D.C.  20551

Dear Acting Director DeMarco:

We are writing in response to your January 20, 2012, letter which discussed your refusal to authorize principal reduction programs for underwater mortgages owned or guaranteed by Fannie Mae and Freddie Mac, and which provided some of the analyses on which you claim to base your refusal.

The single most significant revelation in your letter is that—even based on your own questionable assumptions and data—your most up-to-date analysis demonstrates that principal reduction programs would serve taxpayer interests more effectively than any other alternative, including your preferred alternative of forbearance, particularly with respect to mortgages backed by Fannie Mae.  This revelation directly contradicts your testimony before the Oversight Committee on November 16, in which you stated that principal reduction “is not going to be the least-cost approach for the taxpayer.”

In addition, although we appreciate the information you provided, we have now become aware of new information that calls into serious question the accuracy and completeness of your response, as well as your motivation for continuing to oppose principal reduction programs even when they have the potential to save American taxpayers billions of dollars.

After reviewing the data and legal explanations set forth in your letter, a former employee of Fannie Mae has come forward with detailed information about a pilot program that was designed to offer principal reductions to borrowers with loans backed by Fannie Mae.  The program was tentatively approved in 2010, but cancelled several months before the November elections in which Republicans took control of the House of Representatives.

According to this former employee, the pilot program had obtained appropriate internal legal and accounting approvals, as well as the participation of a prominent mortgage servicing company, but the program was terminated by senior officials at Fannie Mae who were “philosophically opposed” to the concept of reducing principal.  The former employee also indicated that significant research had been conducted prior to initiating this pilot program, and that personnel from your office were directly involved in reviewing the program.

Your letter did not mention anything about this pilot program.  Instead, you repeated the unfounded claim that you lack the statutory authority to proceed with principal reduction programs at this time, and you focused instead on new analyses that you began receiving in December 2010, one month after the congressional elections.  If these allegations by the former employee are accurate, your response to Congress is seriously deficient and misleading.

Rather than highlighting these and other pertinent facts, you chose to begin your letter with a highly inflammatory statement that was quickly cited by the press—that it would cost American taxpayers $100 billion to reduce principal on all three million underwater mortgages owned or guaranteed by Fannie Mae and Freddie Mac.  This was an answer to a question that was never asked and a flagrant distortion of the fundamental issue.  A more relevant figure would have been an estimate of the costs of taking no action at all and allowing all three million underwater mortgages to default—an amount that vastly exceeds your $100 billion estimate.

In fact, your own calculations prove that principal reduction programs prevent losses from occurring.  The data you provided indicate that implementing principal reduction programs for even a small subset of these underwater homeowners would save taxpayers an estimated $28 billion compared to the losses that would occur if no action were taken to prevent defaults.

Economists across the political spectrum have concluded that addressing the housing crisis is the key to improving our nation’s economic recovery, and they believe principal reduction programs offer a sound approach to addressing this crisis responsibly while serving the interests of taxpayers.

Over the last several days, however, we have received troubling new reports that you are now blocking efforts to allow Fannie Mae and Freddie Mac to participate in principal reduction programs agreed to as part of the multi-state settlement under which the nation’s five largest mortgage servicers will provide billions of dollars in compensation for their abuses and illegal actions against homeowners.

We understand that the Federal Housing Finance Agency (FHFA) is not part of the Obama Administration, and that you do not take direction from Administration officials, but it appears that your refusal to follow Congress’ direction and allow principal reduction programs is based more on ideology and the fear of political backlash than on a straightforward analysis of the interests of American taxpayers.

Unlike almost any other official in the entire government, you have an historic opportunity to improve our nation’s fragile economy, to provide real assistance to millions of struggling homeowners, and to save American taxpayers billions of dollars in the process.  It is time for you either to seize this opportunity or to step aside.
BACKGROUND

During your testimony before the Oversight Committee on November 16, 2011, you made two assertions:  that FHFA lacks the statutory authority to authorize principal reduction programs for Fannie Mae and Freddie Mac; and that after examining data and analyses, you determined that principal reduction programs do not serve the long-term interests of taxpayers.

Specifically, Rep. Tierney asked why FHFA refused to allow Fannie Mae and Freddie Mac to utilize principal reduction programs when the Emergency Economic Stabilization Act of 2008 specifically directs FHFA, Fannie Mae, and Freddie Mac to “implement a plan that seeks to maximize assistance for homeowners.”

In response, you stated:  “I believe that the decisions that we’ve made with regard to principal forgiveness are consistent with our statutory mandate.”  You also stated:  “I do not believe that I’ve been appropriated taxpayer funds for the purpose of providing general support to the housing market.”  During your testimony, however, you identified no specific statute that prohibits FHFA from allowing Fannie Mae and Freddie Mac from developing principal reduction programs in select cases that would serve the long-term interests of both taxpayers and homeowners.

You also testified at the hearing that principal reduction programs do not serve the interests of taxpayers.  You stated:

We have been through the analytics of the underwater borrowers at Fannie and Freddie, and looked at the foreclosure alternative programs that are available, and we have concluded that the use of principal reduction within the context of a loan modification is not going to be the least-cost approach for the taxpayer.

In contrast, many leading economists believe that principal reduction programs could fulfill this goal while also serving the long-term interests of the taxpayers.  For example, appearing before the Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs, the President of the New York Federal Reserve Bank, William Dudley, testified:

We think that you can devise a program that, for home buyers that have mortgages that are under water, to incent them to continue to pay on those mortgages by giving them some program of principal reduction.  Obviously the devil’s in the details, so you have to have good program design.  But we are confident that one can design a program, which would be net beneficial—net positive—to the taxpayer.

At the conclusion of Rep. Tierney’s questioning, he asked you to provide both the statutory authority for your claim that you are prohibited from allowing principal reduction programs and the analysis you conducted demonstrating that principal reduction programs do not serve taxpayer interests.  He stated:

What you’re telling me flies in the face of all these people who have come up with a quite different idea. … I’d like you to do two things for the Committee if you would.  First, I want you to identify anywhere in the statute that specifically prohibits you from developing principal reduction programs. … [S]econd, I’d like you to submit whatever analysis you have done that shows why reducing the principal on some mortgages is worse for the United States taxpayer than foreclosure.

In response, you committed under oath to provide these documents, stating:  “We can provide that information as you suggested, Congressman.”

On November 30, 2011, all Democratic Members of the Committee wrote to follow-up on this request and to ask that you provide to the Committee “(1) the specific statutory provision you believe prohibits the Federal Housing Finance Agency (FHFA) from allowing Fannie Mae and Freddie Mac to reduce mortgage principal in all cases; and (2) the analysis you conducted, including the data you examined, demonstrating that principal reduction never serves the long-term interests of the taxpayer when compared to foreclosure.”

After receiving no response, we sent a letter to Committee Chairman Darrell Issa requesting that he issue a subpoena compelling the production of the requested documents.

CONCERNS WITH FHFA RESPONSE TO CONGRESS

On January 20, 2012, you sent a three-page response letter explaining your rationale for refusing to authorize principal reduction programs for mortgages owned or guaranteed by Fannie Mae and Freddie Mac and providing data you relied on in order to make your decision.   Although you did not include any original documents, you did include a summary of three sets of analyses you were provided in December 2010, June 2011, and December 2011.  Based on consultations with experts in the government and private sector, as well as a thorough review of the information you provided, we have numerous concerns with your response, each of which is addressed below.

Claim That Principal Reduction Does Not Serve Taxpayer Interests

In our opinion, the single most significant revelation in your letter to Congress is that, even based on your own questionable assumptions and data, principal reduction programs serve the taxpayer interests even when compared to your preferred alternative of forbearance.

Your letter concedes that both principal reduction and principal forbearance programs serve taxpayer interests by reducing the rates of default and the numbers of foreclosures.  Nevertheless, you argue that forbearance is preferable because it saves more money.  As you testified at the hearing on November 16, principal reduction “is not going to be the least-cost approach for the taxpayer.”

However, your letter and accompanying data demonstrate the opposite.  The analyses from December 2010, June 2011, and December 2011 confirm that, in light of the significant uncertainty underlying your assumptions, there is no effective difference between the estimated savings from these two approaches.  As the analyses concede, any perceived difference between the two is “negligible given the model risk.”

In fact, according to the latest report you provided from December 2011, which is based on the most recent data and up-to-date analyses, principal reduction programs actually save more money than forbearance programs.  Table 3 on page 19 of your letter indicates that Fannie Mae would save more money with principal reduction programs than with forbearance.  It shows that implementing principal reduction programs for borrowers who are Net Present Value (NPV) positive would reduce overall losses by $28.3 billion, while principal forbearance programs for these borrowers would reduce overall losses by $27.9 billion compared to the cost of taking no action.

If your estimates truly guide your decisions, it appears that you are disserving the American taxpayers by subjecting them to unnecessary and avoidable costs because you refuse to approve principal reduction programs.

One explanation you provide in your letter for not approving principal reduction programs is that they would require “changes to the existing IT systems, which are outdated and inflexible.”  We do not believe this is a valid justification for inaction, particularly since you did not even ask Fannie Mae or Freddie Mac to estimate the costs of adjusting their IT systems.

Claim That Principal Reduction Programs Would Cost $100 Billion

Rather than acknowledging that principal reduction programs serve the interests of American taxpayers, the first paragraph of your letter under “FHFA Considerations” included a highly inflammatory assertion implying that principal reduction programs could cost American taxpayers $100 billion.  You said this:

Putting this determination in context, as of June 30, 2011, the Enterprises had nearly three million first lien mortgages with outstanding balances estimated to be greater than the value of the home. … FHFA estimates that principal forgiveness for all of these mortgages would require funding of almost $100 billion to pay down mortgages to the value of homes securing them.

No Member of the Committee asked how much it would cost to pay down the mortgages of all three million mortgages backed by Fannie Mae and Freddie Mac that are currently underwater.  Nevertheless, your statement apparently had its intended effect of diverting attention from the questions we posed as news outlets immediately ran provocative headlines like “Mortgage Writedowns Could Cost Taxpayers $100B.”

To the contrary, your own data show that principal reduction programs would save taxpayers billions of dollars.  According to the data accompanying your letter, you examined borrowers with loan-to-value ratios exceeding 115% and concluded that taxpayers currently stand to lose an estimated $102 billion as a result of the defaults and foreclosures that will occur if no modification efforts are undertaken.  Your December 2011 analysis shows that implementing principal reduction programs would reduce these losses by $28.3 billion.

We have not identified a single press account in which you corrected the misimpression you created by suggesting that principal reduction programs would cost taxpayers $100 billion.  Beginning your letter with such a misleading statement trivializes the critical issues we are struggling to address and undermines your credibility and impartiality.

Statutory Authority Prohibiting Principal Reduction Programs

Your letter finally puts to rest the false argument that federal law prohibits FHFA from authorizing principal reduction programs for mortgages owned or guaranteed by Fannie Mae and Freddie Mac.

Your letter correctly references “three principal mandates set forth by Congress that direct FHFA’s activities and decisions.”  Your letter also correctly acknowledges that under the Emergency Economic Stabilization Act of 2008, “FHFA has a statutory responsibility to maximize assistance for homeowners to minimize foreclosures.”  Finally, your letter concedes that “FHFA did not conclude that ‘principal reduction never serves the long-term interest of the taxpayer’.”

What remains unclear, however, is why you have refused to exercise the authority Congress gave you to implement principal reduction programs.  As discussed above, your own data indicate that principal reduction programs would save taxpayers more money than forbearance programs in certain situations.

Your letter acknowledges that you might “reconsider” whether to authorize principal reduction programs “if other funds become available.”  This seems to be a reference to your ongoing efforts to seek additional taxpayer funds from the Treasury Department in order to provide incentives to mortgage servicing companies to conduct principal reduction programs.

Although additional incentives may be warranted in some cases, taxpayers have already provided $153 billion to Fannie Mae and Freddie Mac, and it is irresponsible and contrary to Congress’ direction for you to refuse to authorize principal reduction programs when they serve taxpayer interests today, according to your own data.  In other words, if your own data show that principal reduction programs would serve the interests of taxpayers now, you should implement these programs immediately and aggressively rather than holding out for additional funds from the Treasury Department.

In addition, as discussed below, a former Fannie Mae employee has informed us that a pilot program to initiate a targeted principal reduction program was vetted by agency legal counsel prior to receiving preliminary approval, yet it was cancelled by Fannie Mae officials on ideological grounds.  If this assertion is accurate, it suggests that the use of legal arguments to prevent principal reduction programs is misplaced and misleading.

Differences in Re-Default Rates

Based on input from numerous experts on housing policy, we have concerns about the assumptions used to estimate acceptance and re-default rates when comparing principal reduction programs to principal forbearance programs.  In particular, the assumptions underlying your analysis may underestimate the benefits of principal reductions and overestimate the benefits of forbearance.

First, your letter observes correctly that borrowers are less likely to re-default when they receive principal reductions compared to when they receive principal forbearance.  It states that the model you used “assumes that principal forgiveness reduces the rate of re-default on the loans to a greater extent than would forbearance.”

Similarly, an August 2010 staff report from the Federal Reserve Bank of New York agreed with this approach and stated:

We find that delinquent borrowers whose mortgages receive some modification have a strong tendency to re-default, but that different kinds of modifications have diverse effects on outcomes. … [T]he re-default rate declines with the magnitude of the reduction in the monthly payment, but also that the re-default rate declines relatively more when the payment reduction is achieved through principal forgiveness as opposed to lower interest rates.

The benefits of principal reductions may be understated in your analysis, however, since your hypothetical principal reduction program is not as sophisticated as programs proposed by experts or currently being implemented elsewhere.  For example, a number of principal modification programs include shared equity features that enable lenders or investors to recover a portion of appreciation in the home’s value.  In such programs, the “loss” from principal reduction may be less than otherwise assumed if the home is later sold at a higher value.

In addition, credible principal reduction programs typically seek to restore borrowers to positive equity positions and are likely to be more successful in obtaining borrower acceptance and preventing re-defaults.  According to your letter, however, you assumed only that principal would be reduced to 115% mark-to-market loan-to-value.  No data were provided comparing loans with loan-to-value between 101% and 115%, and no data were provided comparing modifications that reduce loan-to-value to any level other than 115%.

On the other side of the equation, it appears that the model used by FHFA to estimate the re-default rate for borrowers who receive forbearances may be overly optimistic.      In particular, the NPV tool appears to assume that if borrowers do not re-default within a given period of time (e.g., within one year), they will never re-default.  Such an assumption is highly suspect given projections that housing prices are likely to remain depressed for many years.  The failure to consider likely re-default rates over multiple years may skew your analysis to make forbearance appear more successful in preventing losses than it really is since many borrowers may be underwater for years.

Insufficient Detail to Evaluate Analyses

Your letter fails to provide any of the calculations made to generate the data presented in the tables that accompany the analyses.  In addition, it fails to provide definitions of key terms or to enumerate specific assumptions built into the models used to conduct the analyses.  The analyses appear to aggregate data from across 50 states and do not include any data on more narrow categories of borrowers, such as borrowers with loan-to-value between 115% and 125% or higher than 126%.  As a result, it is impossible to conduct a thorough analysis of the findings you have presented or to understand whether certain sub-sets of borrowers might benefit more than other borrowers from principal reduction programs.

INFORMATION FROM FORMER FANNIE MAE EMPLOYEE

A former employee of Fannie Mae has come forward to express concerns to us about your blanket refusal to authorize any principal reduction programs, even when those programs have been fully vetted by agency legal counsel and have the potential to save the American taxpayers billions of dollars.

According to this former employee, Fannie Mae officials conducted a significant amount of work developing a pilot program to test different principal reduction approaches and determine the most effective models.  As part of this effort, officials identified a major mortgage servicing company that was willing to become a partner in this program, analytical modeling was conducted by both Fannie Mae and the mortgage servicing company, consumer education materials were drafted, and a third-party counseling service was retained, according to the former employee.

This former employee has informed us that preliminary approvals for this pilot program were obtained from a variety of officials, including the Risk Subcommittee of Fannie Mae’s Executive Committee, as well as officials at FHFA and the Office of the Comptroller of the Currency.  The analytical teams at Fannie Mae and the mortgage servicing company also reportedly analyzed a host of factors, including the comparative risk of re-default with shared equity modification options.

According to the former employee, the purpose of the program was to develop “a responsible way to reduce principal balances for underwater mortgage borrowers without creating undue incremental moral hazard.”  As the former employee told us:

The thesis was straightforward:  the program would minimize losses for Fannie Mae versus conventional loss mitigation practices.  The analytical modeling done by both Fannie Mae and its pilot program bank/servicer partner supported this thesis.

According to the former employee, after six months of development work, and two weeks prior to its launch, the pilot program was cancelled in mid-2010 by senior executives in loss mitigation at Fannie Mae who were “philosophically opposed to writing down principal balances.”

The former employee informed us that dozens of officials were involved in this effort and that FHFA and Fannie Mae would have all of the documents relating to this pilot program, including all of the legal and analytical reviews that were conducted.

The former employee also explained to us the purpose of coming forward at this time, stating:  “I believe that we could be saving tens of billions of dollars while also helping stabilize housing prices and stimulating economic growth.”

If the allegations put forth by this former employee are accurate, it is unclear why you failed to include any of this information in your response to Congress.  Even if you subsequently questioned the data or assumptions relied on for this pilot program, your failure to disclose this information calls into question the completeness and accuracy of your response, as well as your motivation for continuing to oppose principal reduction programs.

REQUESTS FOR RESPONSES, DOCUMENTS, AND INTERVIEWS

In order to address the numerous concerns raised about your response to Congress and the new information provided by the former Fannie Mae employee, we request that you provide the documents requested below:

(1)    All documents relating to estimates of losses that would incur if all three million underwater mortgages owned or guaranteed by Fannie Mae and Freddie Mac were allowed to default without any modifications.

(2)    All documents relating to specific default assumptions in the NPV model used by FHFA to compare modifications that include principal reduction with modifications that include principal forbearance.

(3)    All documents relating to estimates of re-default rates for mortgages owned or guaranteed by Fannie Mae and Freddie Mac, including those that received modifications that include principal forbearance, disaggregated by loan-to-value level.

(4)    All documents relating to estimates of specific costs that would be associated with information technology upgrades needed to implement principal reduction programs.

(5)    All documents relating to analyses, if any, of the estimated consequences of reducing mark-to-market loan-to-value to levels other than 115%.

(6)    All documents relating to assumptions and estimates of the potential consequences of offering loan modifications, including forbearance or principal reductions, to borrowers who have mortgage insurance.

(7)    All documents relating to estimates of the number of mortgages owned or guaranteed by Fannie Mae and Freddie Mac that have mortgage insurance or second liens, as well as the share of potential gains from principal reduction programs that would go to unrelated beneficiaries as a result.

(8)    All documents, whether in draft or final form, relating to any pilot program developed by Fannie Mae relating to principal reduction modifications, including but not limited to:

(a)    records of communications, including emails, between and among officials at FHFA, Fannie Mae, the Office of the Comptroller of the Currency, and any outside parties including mortgage servicing companies and consulting firms, relating to such programs;

(b)    legal analyses conducted before, during, or after consideration of such pilot programs;

(c)    accounting or actuarial studies evaluating shared equity modeling or other aspects of such pilot programs, whether prepared by government entities or outside parties;

(d)    consulting, analytic, or other contracts or memoranda or agreement relating to such programs, as well as any products prepared pursuant to such contracts or memoranda of agreement;

(e)    consumer education materials prepared relating to such programs; and

(f)    agendas, briefing papers, minutes, summaries, or other documents prepared by, on behalf of, or after consideration of such programs by the Executive Committee, including but not limited to its Risk Subcommittee.

Please provide the requested documents by February 29, 2012.  To the extent that no documents exist that are responsive to these requests, we ask that you provide a substantive explanation in response to the specific issues raised in this letter.  Thank you for your cooperation with this request.

Sincerely,

__________________________________        __________________________________

Elijah E. Cummings                                        John F. Tierney

Ranking Member                                            Member

cc:    The Honorable Darrell E. Issa, Chairman
Committee on Oversight and Government Reform

source: http://democrats.oversight.house.gov

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FHFA Releases Analysis on Principal Forgiveness As Loss Mitigation Tool – It’ Ain’t Happening

FHFA Releases Analysis on Principal Forgiveness As Loss Mitigation Tool – It’ Ain’t Happening


NEWS RELEASE
For Immediate Release Contact:

Corinne Russell (202) 649-3032
January 23, 2012 Stefanie Johnson (202) 649-3030

FHFA Releases Analysis on Principal Forgiveness
As Loss Mitigation Tool

Washington, DC – In response to a request from members of Congress, the Federal Housing
Finance Agency (FHFA) has publicly disclosed the analysis that led the agency to exclude
principal forgiveness from its menu of loss mitigation tools. On Friday, FHFA delivered to
Representative Cummings, Representative Tierney and other members a letter summarizing
the agency’s determination and three separate staff analyses prepared over the past year that
formed the basis for the determination.

As requested, the information here provides the analytic and legal basis for FHFA’s previously
announced determination on the use of principal forgiveness as a loss mitigation tool. FHFA is
not seeking any legislative action in this area. FHFA remains committed to achieving its
statutory mandate to conserve the assets and property of Fannie Mae and Freddie Mac in
conservatorship while maximizing assistance to troubled homeowners, mindful of the net
present value cost to taxpayers. As FHFA has noted before and states in the letter, changing
circumstances may call for an updating of our analysis.

Background

Each month, FHFA reports on the full array of loss mitigation activities undertaken by Fannie
Mae and Freddie Mac, including loan modifications. Each quarter, FHFA reports on the
redefault rates on loan modifications. Those Foreclosure Prevention & Refinance reports may
be found here. Since establishment of the conservatorships, Fannie Mae and Freddie Mac have
modified more than one million mortgages and undertaken about 2 million foreclosure
prevention actions. Notably, the re-performance rate on loan modifications has improved
substantially as the modifications themselves now typically involve far greater reductions in
monthly payments than did modifications in the early months of the housing crisis.

When a homeowner owes more on their mortgage than the property is worth, this is typically
referred to as being underwater on a mortgage. Being underwater does not imply that a
borrower lacks the ability or the desire to make good on one’s financial obligation, nor does it
relieve a household from that responsibility. Indeed, FHFA estimates that, as of June 30, 2011,
Fannie Mae and Freddie Mac held 1.4 million mortgages with current loan-to-value ratios
above 115 percent. Of these, 1 million were current and 176,000 had been delinquent for more
than a year. For delinquent and deeply underwater borrowers, Fannie Mae and Freddie Mac
offer loan modifications that include principal forbearance, which means no interest is charged
on a portion of the underwater amount.

Finally, for underwater borrowers who remain current on their mortgage, last October FHFA
announced changes to the Home Affordable Refinance Program (HARP), which further
enhance the opportunity to refinance. These HARP changes allow these underwater borrowers
whose mortgages are owned or guaranteed by Fannie Mae and Freddie Mac to take advantage
of today’s lower mortgage rates and to shorten their mortgage term, which would enable
borrowers to get back above water more quickly.

###

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

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Cummings, Tierney Urge Issa to Subpoena Documents from FHFA on Principal Reduction

Cummings, Tierney Urge Issa to Subpoena Documents from FHFA on Principal Reduction


Washington, DC (Jan. 18, 2012) – Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Committee Member John F. Tierney sent a letter today to Chairman Darrell Issa requesting that he issue a subpoena to the Federal Housing Finance Agency (FHFA) compelling the production of all documents associated with its analyses of whether mortgage loan modifications with principal reductions should be offered by Fannie Mae and Freddie Mac. 

During questioning from Tierney at a Committee hearing on November 16, 2011, FHFA Acting Director Edward DeMarco testified that programs to reduce mortgage principal do not serve the long-term interests of taxpayers when compared to foreclosure. DeMarco testified that FHFA had conducted analyses supporting this conclusion, and he committed under oath to provide materials relating to these analyses to the Committee.

On November 30, 2011, Cummings and all Democratic Members of the Committee sent a letter to DeMarco requesting that he provide these documents by December 9, 2011. Despite numerous written and oral follow-up requests, however, DeMarco has failed to provide them to date.

“Given Mr. DeMarco’s failure to produce to the Committee the documents he committed under oath to provide and the call by Federal Reserve officials for the implementation of loan modification programs that include principal reduction to address the ongoing housing crisis, we believe we are left with no option but to compel Mr. DeMarco’s compliance,” Cummings and Tierney wrote to Issa. “For these reasons, we request that you issue a subpoena demanding these documents, or that you schedule a business meeting so Members may vote to authorize a subpoena in order to obtain these documents.”

Below is the full letter:

January 18, 2012

The Honorable Darrell E. Issa
Chairman
Committee on Oversight and Government Reform
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Issa:

        We write today to request that you issue a subpoena to the Federal Housing Finance Agency (FHFA) compelling the production of all documents associated with its analyses of whether mortgage loan modifications with principal reductions should be offered by Fannie Mae and Freddie Mac.  During a hearing before the Committee on November 16, 2011, the Acting Director of FHFA, Edward DeMarco, committed under oath to provide these materials to the Committee.  Despite numerous written and oral follow-up requests, however, Mr. DeMarco has failed to provide them.

        During the Committee’s hearing in November, Rep. John Tierney asked Mr. DeMarco whether he had determined, as a matter of policy, that it was preferable to foreclose on properties rather than offer loan modifications that include principal reductions, even if foreclosures resulted in greater losses to FHFA and U.S. taxpayers than would be associated with principal reductions.  In response to Rep. Tierney’s question, Mr. DeMarco stated:

We have been through the analytics of the underwater borrowers at Fannie and Freddie, and looked at the foreclosure alternative programs that are available, and we have concluded that the use of principal reduction within the context of a loan modification is not going to be the least-cost approach for the taxpayer.

        At the conclusion of his questioning, Rep. Tierney asked Mr. DeMarco to provide both the statutory authority for his claim that FHFA is prohibited from allowing principal reduction programs, as well as any analysis that FHFA conducted demonstrating that foreclosures always serve taxpayer interests when compared to principal reductions.  Specifically, Rep. Tierney stated:

What you’re telling me flies in the face of all these people who have come up with a quite different idea. … I’d like you to do two things for the Committee if you would.  First, I want you to identify anywhere in the statute that specifically prohibits you from developing principal reduction programs. … [S]econd, I’d like you to submit whatever analysis you have done that shows why reducing the principal on some mortgages is worse for the United States taxpayer than foreclosure.

        In response to Rep. Tierney’s request, Mr. DeMarco committed under oath to provide these documents, stating:  “We can provide that information as you suggested, Congressman.”

        In order to follow-up on this request, all Democratic members of the Committee sent a letter to Mr. DeMarco on November 30, 2011, making clear what information he should provide to the Committee.  The letter requested that he produce:

  1.      “the statutory provision you believe prohibits the Federal Housing Finance Agency (FHFA) from allowing Fannie Mae and Freddie Mac to reduce mortgage principal in all cases”; and
  2.      “the analysis you conducted, including the data you examined, demonstrating that principal reduction never serves the long-term interests of the taxpayer when compared to foreclosure.”

        We requested that this information be provided by December 9, 2011, but Mr. DeMarco has failed to provide even a single document.  Minority staff have made repeated inquiries to Mr. DeMarco’s staff about the status of the document production, but they have failed to provide any indication of when he plans to comply.

        While Mr. DeMarco has failed to provide supporting documents demonstrating why a principal reduction program is not in the best interest of taxpayers, economists are increasingly announcing their support for such a program.  For example, over the past several months, officials with the Federal Reserve have made strong public statements supporting principal reduction.  On January 4, Federal Reserve Chairman Bernanke issued a white paper to Congress that stated:

Principal reduction has the potential to decrease the probability of default (and thus the deadweight costs of foreclosure) and to improve migration between labor markets.  Principal reduction may reduce the incidence of default both by improving a household’s financial position, and thus increasing its resilience to economic shocks, and by reducing the incentive to engage in “strategic” default (that is, to default solely based on the household’s underwater position rather than on the affordability of the payments).

On December 16, 2011, during a hearing before the Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs, the President of the New York Federal Reserve Bank, William Dudley, also called for implementation of a targeted principal reduction program to bolster the nation’s economic recovery and serve the long-term interests of U.S. taxpayers.  President Dudley explained:

[w]e think that you can devise a program that, for home buyers that have mortgages that are under water, to incent them to continue to pay on those mortgages by giving them some program of principal reduction.  Obviously the devil’s in the details, so you have to have good program design.  But we are confident that one can design a program, which would be net beneficial—net positive—to the taxpayer.

        The recent statements in support of principal reduction issued by Chairman Bernanke and President Dudley follow similar public statements issued by Neil Barofsky, former Special Inspector General for TARP; Alan Blinder, former Vice Chairman of the Federal Reserve; and Mark Zandi, Chief Economist, Moody’s Analytics.  

Given Mr. DeMarco’s failure to produce to the Committee the documents he committed under oath to provide and the call by Federal Reserve officials for the implementation of loan modification programs that include principal reduction to address the ongoing housing crisis, we believe we are left with no option but to compel Mr. DeMarco’s compliance.  For these reasons, we request that you issue a subpoena demanding these documents, or that you schedule a business meeting so Members may vote to authorize a subpoena in order to obtain these documents.

        If you have any questions, please contact Lucinda Lessley at (202) 225-5051.  Thank you in advance for your attention to this matter.  

Sincerely,

_________________________                         _________________________

Elijah E. Cummings                                               John F. Tierney

Ranking Member                                                   Member

[ipaper docId=78659582 access_key=key-2d8fcui8tiw7dk90gtmn height=600 width=600 /]

 

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Questions Raised About Chairman Issa’s Three-Year Campaign to Investigate Members of Congress Who Received Countrywide “VIP” Loans

Questions Raised About Chairman Issa’s Three-Year Campaign to Investigate Members of Congress Who Received Countrywide “VIP” Loans


Washington, DC (Jan. 17, 2012)—Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, sent a letter to Chairman Darrell Issa seeking information about how he plans to proceed with his investigation of Members of Congress who received mortgage loans from Countrywide Financial Corporation under its VIP loan program, also known as the “Friends of Angelo” program after the company’s embattled CEO, Angelo Mozilo. 

In one of his first official acts after becoming Chairman last year, Rep. Issa issued a unilateral subpoena demanding the mortgage files of the Members of Congress who received Countrywide VIP loans.  He stated that “the American people have a right to know the totality of who participated in the Countrywide’s VIP program and what they did in return for access to it,” and that his goal was to “find a way to disclose it all and then get the American people outraged enough to make sure that it never happens again.”

Below is the full letter (click the link for footnotes):

January 17, 2012

The Honorable Darrell E. Issa
Chairman
Committee on Oversight and Government Reform
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Chairman:

     I am writing to request information about how you plan to proceed with the Committee’s investigation of Members of Congress who received mortgage loans from Countrywide Financial Corporation under its VIP loan program, also known as the “Friends of Angelo” program after the company’s CEO, Angelo Mozilo.

     Over the past three years, you have waged a high-profile campaign to obtain the mortgage files of Members of Congress who received VIP loans from Countrywide.  You have referred to these loans as “bribes,” “influence buying,” and “public corruption.”  Although two previous Chairmen of the Oversight Committee followed the longstanding practice of referring matters involving Members of Congress directly to the Ethics Committee, you abandoned this practice last February when you issued a unilateral subpoena—your first as Chairman—demanding to see these Member files yourself.

     The documents produced in response to your subpoena reveal four previously undisclosed instances in which Members of Congress received Countrywide VIP loans.  All four instances involve Republican Members, including three current Republican House Members and one former Republican House Member.

     When you issued your subpoena last February, you explained that you had two purposes in demanding these files.  The first was to determine whether any official actions were taken by policymakers to benefit Countrywide.  The second was to make public all of the information obtained by the Committee in order to deter future wrongdoing.  In one of your first public interviews after issuing your subpoena, you stated that your goal was to “find a way to disclose it all and then get the American people outraged enough to make sure that it never happens again.”

     Last month, however, you reversed course.  Rather than publicly identifying the four additional Members who received Countrywide loans or attempting to determine whether they took any official actions on behalf of Countrywide, you chose instead to refer their cases to the Ethics Committee.  This is exactly the approach you criticized when used for Democratic Senators Kent Conrad and Christopher Dodd and precisely the approach you abandoned when you issued your subpoena last February. 

    On January 13, House Armed Services Committee Chairman Howard “Buck” McKeon and Rep. Elton Gallegly reported publicly that you referred them to the House Ethics Committee, although both denied taking inappropriate actions on behalf of Countrywide.  To date, you have declined to publicly identify the two other Republicans who also received Countrywide VIP loans. 

    Despite your decision to refer these cases to the House Ethics Committee, you have now scheduled two transcribed interviews with Countrywide officials to take place this week.  Both of these transcribed interviews will be with the Countrywide officials who oversaw and processed Chairman McKeon’s VIP loan.

    Since you failed to consult with me before taking these actions, I have several questions about how you plan to proceed with this investigation, which are set forth below.

Campaign to Obtain Files on Members of Congress

    You launched your campaign to obtain the files of Members who received loans under the Countrywide VIP loan program on June 17, 2008, when you wrote to former Committee Chairman Henry A. Waxman requesting that “the Committee investigate and hold hearings on allegations that mortgage lenders may have made special deals with Members of Congress.”  Chairman Waxman denied your request, responding that the longstanding practice of the Committee had been to allow the House Ethics Committee to handle allegations regarding Members of Congress.

    Rather than defer to the Ethics Committee, you argued that the Oversight Committee must investigate Members of Congress who were part of a wider conspiracy of “influence buying” and “public corruption.”    You stated:

We’re talking about a vast business enterprise that was buying, currying favor with politicians throughout the country and in fact probably distorted the laws that you and I had to live under.

    You also stated:

We cannot close the book without criminal investigations and likely indictments against Countrywide officials and people who knowingly took subsidized below-cost loans and in return produced, if you will, a deal for Countrywide.

    Even when the Ethics Committee conducted investigations, you dismissed them as limited and inadequate.  After the Senate Ethics Committee found no credible evidence that Senators Kent Conrad or Christopher Dodd knowingly accepted discounted loans, you stated:

This story does not change my approach to the investigation of the Countrywide VIP program.  I will continue to press forward with this investigation and strongly believe that a subpoena to Bank of America [which purchased Countrywide] is a necessary next step to fully expose how Countrywide attempted to use its VIP program to buy influence.

Similarly, on September 30, 2009, you stated:

We’re beyond ethics here.  We are at a point where the American people at least should know who they gave money to or benefit to, how they did it, and so on. … What we do know is there is a level of intended corruption by Countrywide that clearly had an effect on government’s decisions for years, and we are ignoring it.

    Over the past three years, you have stated repeatedly that the Oversight Committee should determine the full scope of the loan program and make this information public.  According to a Washington Post story on March 19, 2009, you stated:  “The full story of Countrywide’s efforts to buy influence hasn’t been told and shouldn’t be swept under the rug because no chairman is prepared to issue a subpoena.”  Similarly, on June 24, 2009, you stated in a press release:  “The American people deserve to know the extent that special benefits co-opted public servants who were supposed to be watchdogs of the mortgage industry.”  And on September 29, 2009, you stated on Fox Business:  “[I]f we don’t get to these individuals and figure out what they did in their official capacity, we’re not going to be able to reasonably undo some of what was done.” 

Information About Additional Republican Members

    In one of your first official acts as Chairman, you issued a unilateral subpoena on February 16, 2011, demanding a wide array of documents, emails, and other communications relating to mortgages offered through the “VIP and/or Friends of Angelo program.”  Unlike the subpoena issued by former Chairman Edolphus Towns, your subpoena demanded that mortgage files for Members of Congress—even those of current Members—be delivered directly to your offices instead of the House Ethics Committee. 

    You reiterated that your goals were to determine whether any official actions were taken by policymakers to benefit Countrywide and to make public information you obtained in order to deter future wrongdoing.  You stated:

This subpoena will allow us to obtain the information needed to answer the outstanding public interest questions regarding the full size and scope of the VIP program.  The American people have a right to know the totality of who participated in the Countrywide’s VIP program and what they did in return for access to it.  Our role is to get all of the facts so that the American people can judge for themselves who should be held responsible and accountable.

     Prior to the issuance of your subpoena, three Democratic Members of Congress had been identified publicly as potentially having received VIP loans from Countrywide:  Senator Kent Conrad, Senator Christopher Dodd, and Congressman Edolphus Towns.  Senators Conrad and Dodd were both cleared by the Senate Ethics Committee, which concluded on August 7, 2009, that there was “no credible evidence” that either Senator “knowingly accepted a gift, including a loan not available to the public.”  Congressman Towns issued several public statements denying that he knowingly received any preferential treatment from Countrywide.

    In response to your subpoena, the Committee obtained information about four previously unknown instances in which Members of Congress received VIP loans, including three current Republican House Members and one former Republican House Member.  After discovering that all of these Members are Republicans, you sent a letter on December 16, 2011, referring their cases to the House Ethics Committee.

    On Friday, House Armed Services Committee Chairman Howard “Buck” McKeon and Rep. Elton Gallegly acknowledged publicly that they are two of the Republican Members you referred to the House Ethics Committee in December.  In particular, a spokesperson for Chairman McKeon said he was “pretty shocked and angry” when you informed him about the VIP loan documents obtained by the Committee.

Interviews with Countrywide Officials Who Processed Chairman McKeon’s VIP Loan

    Although you referred cases involving Members to the House Ethics Committee in December, you have now scheduled two transcribed interviews with Countrywide officials to take place this week.  In particular, Committee investigators are scheduled to conduct transcribed interviews with two officials who oversaw and processed Chairman McKeon’s VIP loan:  Stephen Brandt, a Countrywide Executive Vice President who oversaw the VIP program, and Maritza Cruz, a Countrywide Loan Manager for VIP loans.

     The documents obtained pursuant to your subpoena indicate that Ms. Cruz is listed as the contact person for several of Chairman McKeon’s VIP loan documents.  In addition, she prepared his Uniform Underwriting and Transmittal Summary.  Her signature, as well as Chairman McKeon’s signature, appear on his Notification of Underwriting Approval and Closing Conditions. 

     These documents also indicate that Chairman McKeon appears to have obtained a significant discount on his VIP loan as a direct result of personal intervention by Countrywide CEO Angelo Mozilo.  Specifically, an internal email from Mr. Brandt to Countrywide employees handling this loan states explicitly:

Per Angelo – “take off 1 point, no garbage fees, approve the loan and make it a no
doc”.

     Last week, a spokesperson for Chairman McKeon stated that he had “no inkling” that he received a VIP loan and that, “as far as he knew, never received any special favors on the home loan.”  The documents obtained pursuant to your subpoena do not indicate whether Chairman McKeon was informed about his discount.  However, the documents describe at least three conversations Chairman McKeon had with Countrywide employees, including with an account executive instructed to provide the preferential rate.  That employee’s notes of these conversations state:

FOA [Friends of Angelo] referral, Please order appraisal ASAP.  You may call the borrower at his Washington office [number redacted] and get the Sons phone number for the appraiser contact.  The borrower would like to hear from the appraiser this week. 

The borrower is a bit difficult to deal with.  He seems on the edgy side.

Called Mr. McKeon at work [redacted name] his secretary said she would ask “B” for son’s phone #.  Mr. McKeon called said we could call 1) his home [number redacted] his wifes work [number redacted] campaign office

Borrower wants to close ASAP.  Explained to him demands are not here yet.

     In addition, a follow-up letter sent to Chairman McKeon provided forms for him to sign and stated:  “Thank you for allowing COUNTRYWIDE’s VIP TEAM to assist you with your financing needs on the above referenced property.”

    Finally, the documents obtained pursuant to your subpoena indicate that Chairman McKeon was referred to the VIP program by “Mike Farrell/MBA.”  This notation appears to be a reference to Michael J. Ferrell, who was then the chief lobbyist of the Mortgage Bankers Association of America (MBA).  According to his biography, Mr. Ferrell led MBA’s successful campaign to lobby Congress to block the imposition of higher fees on mortgage lenders.

Request for Information

    When you issued your unilateral subpoena last February, press accounts noted your aggressive approach and your high-profile demands for Member files.  For example, one press report stated that your “maiden subpoena is no-holds-barred Issa” and that the “restraint showed in the prior Congress … is nowhere to be found in this subpoena.”  It also stated:  “Issa could be launching grenades.  If the probe turns up anything and the findings become public, it could provide a degree of discomfort for lawmakers.”

    At the time, you seemed to recognize the possibility that Republicans could be among the Members of Congress who received VIP loans.  On multiple occasions over the past three years, you indicated that you planned to pursue this investigation even if Republican Members were implicated.  For example, on September 29, 2009, you stated:

There’s plenty of high profile Republicans who took these, some might call them bribes, certainly they were inappropriate to take under our laws.  Congressman, key staffers, including on the committees of jurisdiction on the Republican side are involved.   

    After initially driving the Committee down the road of investigating Members of Congress, you appeared to reverse course in December when you referred these cases to the Ethics Committee.  Now, however, you have scheduled transcribed interviews with Countrywide officials who oversaw and processed Chairman McKeon’s VIP loan.  These sudden shifts raise key questions about how you plan to proceed with this investigation:

  1. You have stated:  “The American people have a right to know the totality of who participated in the Countrywide’s VIP program and what they did in return for access to it.”  Have you instructed your staff to question Mr. Brandt and Ms. Cruz about their roles in overseeing and processing Chairman McKeon’s VIP loan?  
  2. You have stated:  “The full story of Countrywide’s efforts to buy influence hasn’t been told and shouldn’t be swept under the rug because no chairman is prepared to issue a subpoena.”  Do you intend to publicly release the identities of the remaining two Republican lawmakers, one current and one former, who your investigation has revealed were also beneficiaries of Countrywide VIP loans? And do you intend to conduct a transcribed interview with the former chief lobbyist of the Mortgage Bankers Association of America?
  3. You have stated:  “The American people deserve to know the extent that special benefits co-opted public servants who were supposed to be watchdogs of the mortgage industry.”  Do you intend to hold public hearings on these issues?  If so, do you intend to call as a witness former Countrywide CEO Angelo Mozilo?

    Thank you in advance for your prompt answers to these critical questions.

                        Sincerely,
                        Elijah E. Cummings
                        Ranking Member

[ipaper docId=78586594 access_key=key-1wafoedmuizd8341ne0j height=600 width=600 /]

source:http://democrats.oversight.house.gov

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Chairman Issa Issues Subpoena for All Countrywide VIP Docs, Lawmakers got “Friends of Angelo” loans

Chairman Issa Issues Subpoena for All Countrywide VIP Docs, Lawmakers got “Friends of Angelo” loans


WASHINGTON. D.C. – In December of 2008, House Committee on Oversight and Government Reform Chairman Darrell Issa (R-CA), then the Committee’s Ranking Member, launched an investigation into Countrywide Financial Corporation’s infamous VIP and Friends of Angelo Program that exposed the inner workings of Countrywide’s efforts to buy friends in critical government and industry positions affecting the company’s business interests. Today, Chairman Issa issued a wide-ranging subpoena to Bank of America for all documents and records related to Countrywide’s VIP program.

“Countrywide orchestrated a deliberate and calculated effort to use relationships with people in high places in order to manipulate public policy and further their bottom line to the detriment of the American taxpayers even at the expense of its own lending standards,” said Issa. “This subpoena will allow us to obtain the information needed to answer the outstanding public interest questions regarding the full size and scope of the VIP program. The American people have a right to know the totality of who participated in the Countrywide’s VIP program and what they did in return for access to it. Our role is to get all of the facts so that the American people can judge for themselves who should be held responsible and accountable.”

The subpoena compels Bank of America to produce the following by noon on March 7, 2011:

  • All documents, including emails, related to covered borrowers serviced by Countrywide Financial through the Branch 850 and/or VIP and/or Friends of Angelo program.
  • All documents, including e-mails, transmitted by Countrywide officials notifying a covered borrower of membership in the VIP and/or Friends of Angelo program.
  • All documents, including e-mails, transmitted between and among Countrywide officials discussing the purposes and goals of the VIP and/or Friends of Angelo program.
  • Documents sufficient to show the number of persons enrolled in the VIP and/or Friends of Angelo program for each of calendar years 1996-2008, and the city and state of residence of such persons who were covered borrowers.

The term “covered borrowers” means at the time of the loan the borrower, or their spouse, was:

  • A current or former officer or employee of a federal agency
  • A current or former Member, officer, or employee of the U.S. Congress
  • A current or former officer or employee of a government-sponsored enterprise
  • A current or former officer or employee of a state or local government

 

###

source: http://oversight.house.gov

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MERS subpoenaed by New York Attorney General Eric Schneiderman

MERS subpoenaed by New York Attorney General Eric Schneiderman


I think MERS’ Janice Spokeswoman needs to be updated on all that happened from 1998-2002 before she comments.

Just like the others who have resigned when the company is on the brink of exposure. Wait until they get a hold of those who were involved from the beginning (X-CEO and X-VP/Treasurer)… who know what’s up.

But they will be reeled back in because they knew all along this was bound to happen. You ain’t so smart now… are you?

REUTERS-

New York’s attorney general has subpoenaed MERS, the electronic registry of mortgages used by the banking industry, seeking information about how it is used by major banks, a person familiar with the matter said.

Delaware also took action by filing a lawsuit on Thursday that accuses MERS of taking unlawful shortcuts in dealing with the foreclosure crisis.

The registry used by the banking industry is “unreliable” and “frequently inaccurate,” Beau Biden, the state’s attorney general said in the lawsuit, which seeks penalties of $10,000 per violation.

New York Attorney General Eric Schneiderman issued a subpoena earlier this week demanding documents from MERS about how it is used by major banks, a source told Reuters.

The subpoena is part of a joint New York-Delaware mortgage probe, the source said.

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Internal FL AG’s Office Emails Show “Secret” Discussions About LPS & DOCX

Internal FL AG’s Office Emails Show “Secret” Discussions About LPS & DOCX


A few email discussions of the FL AG’s office that show what went on behind closed doors. Go thru them and thanks to Foreclosure Hamlet for these gems.

Please click on the links below.

 

[M-Hamilton-to-LPS]

[V-Butler-to-LPS]

[B-Julian-to-LPS-1]

[B-Julian-to-LPS-2]

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California reportedly subpoenas BofA over toxic securities

California reportedly subpoenas BofA over toxic securities


Me thinks this just sunk the Foreclosure Fraud Settlement ship!

California is trying to determine whether BofA and its Countrywide Financial subsidiary sold investments backed by risky mortgages to investors in California under false pretenses, a source says.

Oh Hella Yeah…they did & They everyone knows this!

La Times-

Investigators with the state attorney general’s office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe.

The state is trying to determine whether the bank and its Countrywide Financial subsidiary sold investments backed by risky mortgages to institutional and private investors in California under false pretenses, according to the person, who was not authorized to speak publicly and requested confidentiality.

The subpoenas, which were served Tuesday…

[LA TIMES]

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Oversight Committee Subpoenas Attorney General Holder for ‘Operation Fast and Furious’ Communications and Documents

Oversight Committee Subpoenas Attorney General Holder for ‘Operation Fast and Furious’ Communications and Documents


WASHINGTON, D.C. – House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) today announced the issuance of a subpoena to Attorney General Eric Holder, Jr. for Justice Department documents related to the “Operation Fast and Furious” gun walking scandal.

 “Top Justice Department officials, including Attorney General Holder, know more about Operation Fast and Furious than they have publicly acknowledged,” said Chairman Issa. “The documents this subpoena demands will provide answers to questions that Justice officials have tried to avoid since this investigation began eight months ago. It’s time we know the whole truth.”

 The subpoena seeks the following:

 In accordance with the attached schedule instructions, you, Eric H. Holder Jr., are required to produce all records in unredacted form described below:

  1. All communications referring or relating to Operation Fast and Furious, the Jacob Chambers case, or any Organized Crime Drug Enforcement Task Force (OCDETF) firearms trafficking case based in Phoenix, Arizona, to or from the following individuals:

 a. Eric Holder Jr., Attorney General;

 b. David Ogden, Former Deputy Attorney General;

 c. Gary Grindler, Office of the Attorney General and former Acting Deputy Attorney General;

 d. James Cole, Deputy Attorney General;

 e. Lanny Breuer, Assistant Attorney General;

 f. Ronald Weich, Assistant Attorney General;

 g. Kenneth Blanco, Deputy Assistant Attorney General;

 h. Jason Weinstein, Deputy Assistant Attorney General;

 i. John Keeney, Deputy Assistant Attorney General;

 j. Bruce Swartz, Deputy Assistant Attorney General;

 k. Matt Axelrod, Associate Deputy Attorney General;

 l. Ed Siskel, former Associate Deputy Attorney General;

 m. Brad Smith, Office of the Deputy Attorney General;

 n. Kevin Carwile, Section Chief, Capital Case Unit, Criminal Division;

 o. Joseph Cooley, Criminal Fraud Section, Criminal Division; and,

 p. James Trusty, Acting Chief, Organized Crime and Gang Section.

 2. All communications between and among Department of Justice (DOJ) employees and Executive Office of the President employees, including but not limited to Associate Communications Director Eric Schultz, referring or relating to Operation Fast and Furious or any other firearms trafficking cases.

 3. All communications between DOJ employees and Executive Office of the President employees referring or relating to the President’s March 22, 2011 interview with Jorge Ramos of Univision.

 4. All documents and communications referring or relating to any instances prior to February 4, 2011 where the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) failed to interdict weapons that had been illegally purchased or transferred.

 5. All documents and communications referring or relating to any instances prior to February 4, 2011 where ATF broke off surveillance of weapons and subsequently became aware that those weapons entered Mexico.

 6. All documents and communications referring or relating to the murder of Immigrations and Customs Enforcement Agent Jaime Zapata, including but not limited to documents and communications regarding Zapata’s mission when he was murdered, Form for Reporting Information That May Become Testimony (FD-302), photographs of the crime scene, and investigative reports prepared by the FBI.

 7. All communications to or from William Newell, former Special Agent-in-Charge for ATF’s Phoenix Field Division, between:

 a. December 14, 2010 to January 25, 2011; and,

 b. March 16, 2009 to March 19, 2009.

 8. All Reports of Investigation (ROIs) related to Operation Fast and Furious or ATF Case Number 785115-10-0004.

 9. All communications between and among Matt Axelrod, Kenneth Melson, and William Hoover referring or relating to ROIs identified pursuant to Paragraph 7.

 10. All documents and communications between and among former U.S. Attorney Dennis Burke, Attorney General Eric Holder Jr., former Acting Deputy Attorney General Gary Grindler, Deputy Attorney General James Cole, Assistant Attorney General Lanny Breuer, and Deputy Assistant Attorney General Jason Weinstein referring or relating to Operation Fast and Furious or any OCDETF case originating in Arizona.

 11. All communications sent or received between:

 a. December 16, 2009 and December 18, 2009, and;

 b. March 9, 2011 and March 14, 2011, to or from the following individuals:

 

      • Emory Hurley, Assistant U.S. Attorney, Office of the U.S. Attorney for the District of Arizona;
      • Michael Morrissey, Assistant U.S. Attorney, Office of the U.S. Attorney for the District of Arizona;
      • Patrick Cunningham, Chief, Criminal Division, Office of the U.S. Attorney for the District of Arizona;
      • David Voth, Group Supervisor, ATF; and,
      • Hope MacAllister, Special Agent, ATF.

 12. All communications sent or received between December 15, 2010 and December 17, 2010 to or from the following individuals in the U.S. Attorney’s Office for the District of Arizona:

 a. Dennis Burke, former United States Attorney;

 b. Emory Hurley, Assistant United States Attorney;

 c. Michael Morrissey, Assistant United States Attorney; and,

 d. Patrick Cunningham, Chief of the Criminal Division.

 13. All communications sent or received between August 7, 2009 and March 19, 2011 between and among former Ambassador to Mexico Carlos Pascual; Assistant Attorney General Lanny Breuer; and, Deputy Assistant Attorney General Bruce Swartz.

 14. All communications sent or received between August 7, 2009 and March 19, 2011 between and among former Ambassador to Mexico Carlos Pascual and any Department of Justice employee based in Mexico City referring or relating to firearms trafficking initiatives, Operation Fast and Furious or any firearms trafficking case based in Arizona, or any visits by Assistant Attorney General Lanny Breuer to Mexico.

 15. Any FD-302 relating to targets, suspects, defendants, or their associates, bosses, or financiers in the Fast and Furious investigation, including but not limited to any FD-302s ATF Special Agent Hope MacAllister provided to ATF leadership during the calendar year 2011.

 16. Any investigative reports prepared by the FBI or Drug Enforcement Administration (DEA) referring or relating to targets, suspects, or defendants in the Fast and Furious case.

 17. Any investigative reports prepared by the FBI or DEA relating to the individuals described to Committee staff at the October 5, 2011 briefing at Justice Department headquarters as Target Number 1 and Target Number 2.

 18. All documents and communications in the possession, custody or control of the DEA referring or relating to Manuel Fabian Celis-Acosta.

 19. All documents and communications between and among FBI employees in Arizona and the FBI Laboratory, including but not limited to employees in the Firearms/Toolmark Unit, referring or relating to the firearms recovered during the course of the investigation of Brian Terry’s death.

 20. All agendas, meeting notes, meeting minutes, and follow-up reports for the Attorney General’s Advisory Committee of U.S. Attorneys between March 1, 2009 and July 31, 2011, referring or relating to Operation Fast and Furious.

 21. All weekly reports and memoranda for the Attorney General, either directly or through the Deputy Attorney General, from any employee in the Criminal Division, ATF, DEA, FBI, or the National Drug Intelligence Center created between November 1, 2009 and September 30, 2011.

 22. All surveillance tapes recorded by pole cameras inside the Lone Wolf Trading Co. store between 12:00 a.m. on October 3, 2010 and 12:00 a.m. on October 7, 2010.

 ###

source: oversight.gov

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Amherst law firm agrees to pay fine, Settlement involves foreclosure practices

Amherst law firm agrees to pay fine, Settlement involves foreclosure practices


“I am glad the U. S. Attorney completed this phase of the Baum saga and that he is changing his practice,” said New York City attorney Susan Chana Lask

[…]

“I hope homeowners use the settlement to show the courts the foreclosure mill problem was real and damaged a lot of people’s lives. It’s not over.”

I’m almost certain she is referencing that although the US Attorney settled, AG Schneiderman has yet to complete his investigation.

 

Buffalo News

Steven J. Baum PC, the Amherst law firm that has been under heavy fire for its foreclosure practices, agreed Thursday to pay a $2 million fine and “extensively” overhaul its practices in a settlement with the U. S. Attorney’s Office in Manhattan that has statewide implications.

The agreement with Baum resolves a federal investigation into whether the state’s largest foreclosure law firm, on behalf of lenders, filed misleading affidavits, mortgage assignments and other documents in state and federal courts.

[BUFFALO NEWS]

image: thetorchtheatre

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In RE: FORECLOSURE FRAUD SETTLEMENT “MERS, Pillar Processing & Steven J. Baum, P.C.”

In RE: FORECLOSURE FRAUD SETTLEMENT “MERS, Pillar Processing & Steven J. Baum, P.C.”


Mortgage Fraud

Mortgage Electronic Registration Systems
Pillar Processing, LLC
Steven J. Baum, P.C.

Action Date: October 7, 2011
Location: New York, NY

On October 6, 2011, a settlement agreement was signed regarding the practices of one of the largest foreclosure mills in the country, Steven J. Baum, P.C., a law firm operating from Amherst, New York. The settlement was obtained by Preet Bharara, the U.S. Attorney for the Southern District of NY. The investigation was conducted by the Civil Frauds Unit of the United States Attorney’s Office for the Southern District of New York which investigated under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA).

Under the settlement, the Baum Firm is required to pay $2 million and make significant reforms, but is still allowed to say (paragraph 4): “This Agreement does not constitute a finding by any Court or Agency that Baum has engaged in any unlawful practice or wrongdoing of any kind.”

Most significantly, Baum employees – including the very prolific robo-signing associate, Elpiniki Bechakas, may no longer sign mortgage assignments as officers of Mortgage Electronic Registration Systems, Inc. (“MERS”). (Bechakas is not specifically named in the Agreement, but has been singled out by NY judges, including the Honorable (and very savvy) Arthur Schack of Brooklyn, as a Baum attorney with very questionable practices.)

The relief provided in the Settlement Agreement is very much prospective relief, and in that regard, is very comprehensive.

For those pending cases, however, the relief in paragraph 15(a) may seem grossly inadequate:

“Baum shall provide the following notification:

a. In any pending foreclosure action where an application for a judgment of foreclosure has not been submitted to a court, if Baum has filed an assignment of mortgage as a corporate officer of MERS, Baum shall disclose that fact to the court in the application for the judgment of foreclosure, or earlier. Such disclosure shall not be required if the Baum firm does not file a proposed judgment of foreclosure (e.g. because another law firm has been substituted as counsel for the matter prior to the filing of a proposed judgment of foreclosure, because the action is dismissed, etc.)”

All that the banks need to do under this settlement in pending cases is to sub in another law firm that may use the Baum assignments to foreclose, without even making any further disclosure to the courts such as “the signers are really employees of the Baum Law Firm who previously represented the banks in this matter.”

While it is true that most defense attorneys will no doubt raise this point, it is also true that most homeowners in foreclosure proceed pro se and are likely to be completely unaware of this Settlement Agreement, and the actual employer of Elpiniki Bechakas and other Baum signers.

Then there is the matter of the tens of thousands of homeowners who have lost their homes in cases where Baum employees signed mortgage assignments as officers of MERS. Most often, they assigned mortgages to mortgage-backed trusts so that the trusts could foreclose, even though such transfers did not take place on the dates and in the manner set forth on the Baum assignments. These Baum Assignments appear throughout the New York courts, but often in the Courts of other states as well.

Two million seems to be the magic number. This is also the amount paid by the Law Offices of Marshall Watson in Florida whose associates engaged in similar practices of signing as MERS officers, assigning mortgages after foreclosure actions were initiated, etc.

Further relief may be forthcoming, from both criminal prosecutions, the NY Bar, and most certainly from private class action and RICO lawsuits brought by private litigants.

Investors in mortgage-backed securities must ask for reports from the Trustees of how much they have paid for these Baum Assignments in the last five years, how much they have lost and how much more they will lose when foreclosures are successfully defended because the loan documents relied on by the trustees were “Baum-made.”

This is a first-of-its-kind settlement with one significant party in the foreclosure fraud morass.

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Feds went easy on NY’s largest foreclosure mill, $2M wrist slap for Baum: critics

Feds went easy on NY’s largest foreclosure mill, $2M wrist slap for Baum: critics


Now you know why people Occupy Wall Street, They are pissed and sick and tired of all the fraud. Bloomberg warned that US unemployment will lead to RIOTS, I think he needs to broaden this statement.

NY POST-

The largest foreclosure mill in New York, under investigation for years by federal authorities for allegedly filing misleading paperwork, affidavits and mortgage documents, yesterday agreed to pay a $2 million fine to settle a probe by Manhattan US Attorney Preet Bharara.

Steven J. Baum PC, which has filed tens of thousands of foreclosure actions across the state over the past several years, promised to change the way it did business and admitted to “occasionally” making “inadvertent errors.”

The Buffalo-based firm, which was used by every major bank in the country, did not admit any wrongdoing in the settlement deal.

.
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MANHATTAN U.S. ATTORNEY ANNOUNCES AGREEMENT WITH MORTGAGE FORECLOSURE LAW FIRM TO OVERHAUL ITS PRACTICES AND PAY $2 MILLION FINE

MANHATTAN U.S. ATTORNEY ANNOUNCES AGREEMENT WITH MORTGAGE FORECLOSURE LAW FIRM TO OVERHAUL ITS PRACTICES AND PAY $2 MILLION FINE


UNITED STATES ATTORNEY’S OFFICE
Southern District of New York

U.S. ATTORNEY PREET BHARARA

FOR IMMEDIATE RELEASE
Thursday, October 6, 2011
http://www.justice.gov/usao/nys

CONTACT: Ellen Davis, Carly Sullivan, Jerika Richardson
(212) 637-2600

 

.

MANHATTAN U.S. ATTORNEY ANNOUNCES AGREEMENT
WITH MORTGAGE FORECLOSURE LAW FIRM TO OVERHAUL
ITS PRACTICES AND PAY $2 MILLION FINE

PREET BHARARA, the United States Attorney for the Southern District of New York, announced today that the United States has entered into an agreement with the law firm of STEVEN J. BAUM, P.C. (“BAUM”), one of the largest volume mortgage foreclosure firms in New York State, that requires the firm to pay $2 million to the United States and to extensively change its practices with respect to mortgage foreclosure actions (the “Agreement”). The Agreement resolves an investigation into BAUM’s mortgage foreclosure-related practices, specifically whether the firm, on behalf of its lender clients, filed misleading pleadings, affidavits, and mortgage assignments in state and federal courts in New York.

Manhattan U.S. Attorney PREET BHARARA said: “In mortgage foreclosure proceedings, there are no excuses for sloppy practices that could lead to someone mistakenly losing their home. Homeowners facing foreclosure cannot afford to have faulty paperwork or inadequate evidence submitted, and today’s agreement will help minimize that risk.”

The Agreement specifically prohibits BAUM from engaging in certain practices related to the Mortgage Electronic Registration Systems, Inc. (“MERS”), a subscription-based electronic registry system for lenders and other entities that tracks ownership interests in mortgages. MERS members contractually agree to appoint MERS as their agent on all mortgages they register. Until recently, employees of BAUM, with the consent of MERS, had been assigning mortgages on behalf of MERS, even though they had no connection to MERS whatsoever, which resulted in errors in its legal filings in state and federal court. Pursuant to the Agreement, BAUM is prohibited from executing any assignment of a mortgage as an “officer” or “director” of MERS.

The Agreement also requires a general overhaul of BAUM’s practice with respect to its filings in mortgage foreclosure actions. Under the terms of the Agreement, BAUM has agreed to:

  • Take steps to inform courts of the nature of the assignments in pending foreclosure proceedings it is handling;
  • Obtain appropriate affidavits from its clients attesting to the fact that they possess original notes or have conducted a diligent search and the original note could not be found;
  • Have experienced attorneys supervise the preparation of pleadings, and review and approve pleadings before they can be filed;
  • Implement a 12-24 month training program for its attorneys that includes an overview of the foreclosure process in New York State and a review of the litigation procedures expected at BAUM;
  • Provide immediate notice to the Government when objections are raised regarding the accuracy of certain court filings related to mortgage foreclosure proceedings; and
  • Maintain documentation of its compliance with the settlement.

In addition, the Agreement requires BAUM to pay the United States $2 million in exchange for a release from any potential claims pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). FIRREA authorizes the United States to seek civil penalties for violations of, and conspiracies to violate, certain predicate criminal statutes involving financial fraud, including mail and wire fraud. The release from liability does not preclude any other parties, including individual homeowners, from pursuing any rights they may have.

The Agreement does not constitute a finding by any court or agency that Baum has engaged in any unlawful practice or wrongdoing. In the Agreement, Baum acknowledges, however, that it occasionally made inadvertent errors in its legal filings in state and federal court, which it attributes to human error in light of the high volume of mortgage defaults and foreclosures throughout the State of New York in the wake of the national subprime mortgage crisis.

Mr. BHARARA thanked the U.S. Trustee’s Office for their invaluable assistance in this case. The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys PIERRE ARMAND and LARA ESHKENAZI are in charge of the case.

The Civil Frauds Unit works in coordination with President BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

11-302 ###

[Read the agreement below]

 

[ipaper docId=67831624 access_key=key-sjeggego2opcclgi8ik height=600 width=600 /]

 

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Steven J. Baum Law Firm to Pay $2 Million Over Foreclosure Practices

Steven J. Baum Law Firm to Pay $2 Million Over Foreclosure Practices


It’s become a new world in America. No matter how hard one tries, all those families who were thrown out of their homes…how many individuals can settle and get away with this?

Money is the root of all evil.

Bloomberg-

Steven J. Baum’s foreclosure law firm, one of the largest in New York state, will pay the U.S. $2 million and change its practices to resolve a probe into its mortgage-related legal filings.

The agreement resolves an investigation into whether the Baum firm filed misleading pleadings, affidavits and mortgage assignments in courts, according to a statement today by U.S. Attorney Preet Bharara in Manhattan.

[BLOOMBERG]

 

[ipaper docId=67831624 access_key=key-sjeggego2opcclgi8ik height=600 width=600 /]

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California subpoenas Citigroup about mortgage-backed securities

California subpoenas Citigroup about mortgage-backed securities


LA Times

California Atty. Gen. Kamala D. Harris has subpoenaed Citigroup Inc. and its banking subsidiary, Citibank, ordering the two entities to answer questions regarding the selling and marketing of mortgage-backed securities in the Golden State, a person familiar with the investigation said.

The person, who was not authorized to speak publicly about the matter and spoke on condition of anonymity, would not further characterize the nature of the investigation. Spokespeople for the attorney general’s office and Citi declined to comment.

[LA TIMES]

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Ally Financial Faces Charge for Mortgage Losses, Receives Subpoens from DOJ & SEC

Ally Financial Faces Charge for Mortgage Losses, Receives Subpoens from DOJ & SEC


WSJ-

Ally Financial Inc. said it expects to incur a $100 million second-quarter charge to cover mortgage losses posted by securitization trusts, and that it received subpoenas from regulators related to “certain mortgage activities,” according to a regulatory filing early Wednesday.

In an updated prospectus filed with the Securities and Exchange Commission, Ally said it made payments to such trusts of $152 million in the second quarter to cover losses related to …

Continue reading [THE WALL STREET JOURNAL]

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Michigan Attorney General Subpoenas Three Mortgage Processors in Probe (LPS, FNF, CT CORP. SYSTEMS)

Michigan Attorney General Subpoenas Three Mortgage Processors in Probe (LPS, FNF, CT CORP. SYSTEMS)


BLOOMBERG:

The Michigan attorney general’s office subpoenaed three mortgage processors including Lender Processing Services as part of a state probe of robo-signing.

Michigan Attorney General Bill Schuette said his office serviced Lender Processing, Fidelity National Financial Inc. (FNF) and CT Corporation System with investigative subpoenas as affiliates of DocX, a mortgage service support provider. The attorney general said he is seeking information about documents signed by DocX employees as “Linda Green.”

The subpoenas are part of a criminal investigation into questionable mortgage documentation filed with Michigan’s Register of Deeds offices, Schuette’s said in a statement today. The subpoenas were approved by the state court in Lansing June 13 and require responses by June 30, Schuette said.

Continue reading [BLOOMBERG]

PRESS RELEASE:

Schuette Issues Subpoenas in Criminal Probe of Mortgage Processors

Contact:  John Sellek or Joy Yearout 517-373-8060
Agency: Attorney General

LANSING– Michigan Attorney General Bill Schuette today announced that he has issued criminal investigative subpoenas against national mortgage servicing support providers in an expansion of his office’s investigation into questionable mortgage documentation filed with Michigan’s Register of Deeds offices during the current foreclosure crisis.

“Allegations of forged mortgage documents are very serious and require a thorough investigation,” said Schuette.  “I will continue to work closely with federal and local authorities to find answers on behalf of Michigan homeowners.”

The Attorney General is empowered to pursue criminal investigative subpoenas under the Code of Criminal Procedure (MCL 767A.2(2)).  Schuette’s office has filed criminal investigative subpoenas against DocX, which provides mortgage support services, including creating, processing or recording mortgage assignments or other mortgage documentation.  In addition to DocX, the following companies affiliated with DocX were served with investigative subpoenas by Schuette’s office:

·         Lender Processing Services, Inc.;

·         Fidelity National Financial, Inc.; and

·         CT Corporation System.

Schuette’s office has requested documents regarding the mortgage processing companies’ operations in relation to foreclosure and/or bankruptcy-related document processing.  The subpoenas were approved by the 54B District Court in Ingham County on Monday, June 13, 2011, and the information must be provided to the Attorney General’s Office on or before June 30, 2011.

In April 2011, Schuette launched an investigation after county officials across the state reported that they suspected Assignment of Mortgage documents filed in their offices may have been forged.  A recent “60 Minutes” news broadcast had shown that the name “Linda Green” was signed to thousands of mortgage-related documents nationwide, but with many different variations in handwriting.  County officials in Michigan reviewed their files and found similar documents, thus raising questions about the authenticity of the documents filed.

Schuette is investigating whether certain mortgage processing companies permitted such robosigning of legal documents filed in connection with Michigan foreclosures.  Apart from the question of whether falsified signatures were used, robosigning may also involve individuals signing affidavits to signify that mortgage documentation was properly prepared without ever conducting a proper review of the documents.  Although Michigan is a non-judicial foreclosure state, Schuette is reviewing whether robosigned documents may have been filed with courts in limited cases.

Schuette urges any current or former employees of mortgage servicers or processing companies with knowledge of unlawful practices related to mortgage servicing or the execution of documents in Michigan to call the Attorney General’s Corporate Oversight Division at (517) 373-1160 (517) 373-1160 .

Schuette is also continuing to work with fellow attorneys general in a national workgroup examining mortgage lending practices, including the robosigning issue and consumer protection concerns affecting homeowners nationwide.

Schuette reminds Michigan homeowners that citizens do not need to pay to speak with their lender or servicer or to obtain outside assistance with foreclosure issues.  Free local assistance with foreclosure issues can be found by calling the Michigan State Housing Development Authority at (866) 946-7432 (866) 946-7432.

-30

source: http://www.michigan.gov

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Goldman Sachs Said to Get Subpoena From New York Prosecutor

Goldman Sachs Said to Get Subpoena From New York Prosecutor


BLOOMBERG:

Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, received a subpoena from the Manhattan District Attorney’s office seeking information on the firm’s activities leading into the credit crisis, according to two people familiar with the matter.


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New York State Attorney General Eric Schneiderman Probing Lender Processing Services, Nationwide Title Clearing

New York State Attorney General Eric Schneiderman Probing Lender Processing Services, Nationwide Title Clearing


Just last week Chicago AG Lisa Madigan announced she was probing them as well. Note: some mistakenly say “National” instead of “Nationwide” below…

NY POST-


Indeed, New York State Attorney General Eric Schneiderman recently said that his office is probing mortgage processing firm Lender Processing Services and National Title Clearing.

Schneiderman also launched a probe into the mortgage securitization practices of major investment banks Goldman Sachs, Morgan Stanley, Deutsche Bank and UBS.


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